The Chartered Institute for Securities and Investment (CISI) is the major body offering examinations for those people looking to gain qualifications in investment and securities. To attain the CISI qualification, you must complete one of the three regulatory units and one of six technical units. The CISI certificate is the first level of the qualification structure for investment and securities professionals.
The Commodity Derivatives exam of the CISI course in London is a two hour paper which comprises 100 multiple choice questions and the recommended study time for the exam is 100 hours. The pass mark for this paper is 70 per cent and 79 per cent of students pass the exam on each sitting.
The paper can either be taken in a traditional exam venue, or in a computer based testing centre. If the latter is chosen, you will be required to answer up to a further ten per cent of additional trial questions which don't affect your final grade. These questions will not be identified separately, and you will be given extra time to compensate.
Commodity Derivatives CISI Exam
The syllabus for the Commodity Derivatives exam covers eight main areas of study. These are:
1. Introduction to Commodity Derivatives
2. Underlying Commodity Markets
3. Related Markets
4. Principles of Exchange Traded Commodity Futures and Options
5. Principles of Margin and Clearing
6. Principles of OTC Commodity Derivatives
7. Settlement and Delivery, Hedging, Trading and Investment Strategies, and
8. Special Regulatory Requirements
These eight main areas are then broken down into several further areas. For example, one CISI course provider, BPP, break down Related Markets into:
• Bond Markets
• Equity Markets
• Money Markets
• Other Commodity Markets, and
• Foreign Exchange Markets
The CISI sets out in detail on its website how many questions will be included within each topic. For example, there will be seven questions on Delivery and Settlement and ten questions on Special Regulatory Requirements. This website also provides a full breakdown of the syllabus for the exam.
Commodity Derivatives Past Papers
All the questions are multiple choice and will give you three possible answers from which to choose. A typical question would be along the lines of the following:
"One of the primary motivations for people investing in commodities is...
a) that commodities have a positive correlation with unpredicted inflation?
b) that commodities have a positive correlation with bond and stock investments?
c) that commodities have a positive volatility with bond and stock investments?"
Past papers and workbooks can be purchased from the CISI or any of the accredited course providers.
CISI Course and Providers
CISI Securities and Investment course providers are accredited by the CISI themselves to ensure the course provision is of a certain standard. Providers in the UK offering the CISI qualification and Commodity Derivatives module include large specialised training companies such as 7 City, Kaplan Financial and BPP.
There are often smaller more local providers of the training too, and the full list of training institutes is available from the CISI. As well as attending a training course, it is also possible for you to complete a self-study option, though the relevant textbooks can only be purchased from approved suppliers.