CME-1 Cheat Sheet 2026

The 30 highest-yield CME-1 facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What is the most common structure used for corporate sukuk in Saudi Arabia? → Ijara Sukuk (lease-based)
2. What is 'credit risk' in fixed income investing? → Risk that the bond issuer will fail to make timely payments of principal or interest
3. What percentage of a listed company's board must be independent directors under CMA governance rules? → At least one-third must be independent
4. What is the maximum percentage stake that requires a mandatory tender offer (MTO) in a Saudi listed company? → 33%
5. What happens to a conditional tender offer if the minimum acceptance condition is not met by the closing date? → The offer lapses and all tendered shares are returned to their owners
6. What is the primary function of the Securities Depository Center (Edaa) in Saudi Arabia? → Maintaining the central registry of securities ownership and handling settlement
7. What is the minimum number of independent directors required on the board of a Saudi-listed company? → At least two independent directors or one-third of the board, whichever is greater
8. What role does the National Debt Management Center (NDMC) play in Saudi Arabia? → Managing the Kingdom's debt portfolio and executing borrowing strategy
9. What is the name of the Saudi stock exchange where listed securities are traded? → Tadawul (Saudi Exchange)
10. What is the minimum capital requirement for a company to list on the Saudi Exchange Main Market? → SAR 300 million
11. What is the Capital Asset Pricing Model (CAPM) used for? → Estimating the expected return of an asset based on its beta and market risk premium
12. What is an Exchange Traded Fund (ETF) and are they available on Tadawul? → A fund that tracks an index and trades on the exchange like a stock; yes, available
13. What does a 'call option' give the holder the right to do? → Buy the underlying asset at the strike price before or at expiry
14. What is a 'restricted period' in the context of share trading by company insiders? → A blackout period before earnings announcements when insiders cannot trade company shares
15. What is the primary regulatory body overseeing the capital market in Saudi Arabia? → Capital Market Authority (CMA)
16. What is a 'limit order' in the context of securities trading? → An order to buy or sell at a specified price or better
17. What must a shareholder do when their ownership in a listed company crosses 5% under CMA disclosure rules? → Disclose the stake to the CMA and the company within prescribed timeframes
18. What is SAIBOR and how does it relate to fixed-income instruments in Saudi Arabia? → The Saudi Arabian Interbank Offered Rate used as a benchmark for floating-rate instruments
19. Under CMA regulations, what is the cooling-off period during which investors can withdraw their subscription from an IPO? → Within 2 business days of the prospectus amendment
20. What is the Price-to-Earnings (P/E) ratio used for in equity analysis? → Comparing market price to earnings per share to assess relative valuation
21. Which body must approve the appointment of external auditors for CMA-licensed entities? → CMA under its licensing conditions
22. In a mandatory tender offer under Saudi CMA regulations, the offer price must be at least: → The highest price paid by the offeror for shares in the preceding 12 months
23. An Authorized Person under CMA regulations must maintain a minimum capital adequacy ratio. What happens if they fall below the required threshold? → They must notify the CMA immediately and submit a remediation plan
24. What is the key difference between conventional bonds and Sukuk in Saudi Arabia? → Sukuk represent ownership in underlying assets rather than debt obligations
25. A 'white knight' in a takeover context refers to: → A friendly acquirer invited by target management to counter a hostile bid
26. What is the primary Saudi legislation governing anti-money laundering? → Anti-Money Laundering Law issued by Royal Decree M/31
27. What is the primary objective of the Capital Market Authority (CMA) in Saudi Arabia? → Regulating and developing the capital market to protect investors and ensure fairness
28. What is the settlement cycle for equity trades on Tadawul? → T+2
29. What is the role of the Listing Authority in Saudi Arabia? → It reviews and approves applications for listing securities on Tadawul
30. Which entity is responsible for clearing and settling equity trades executed on the Saudi Exchange (Tadawul)? → The Securities Depository Center (Edaa) in conjunction with the exchange