Twenty one questions, tied for the largest share of the paper, and seven sections wide. It is also where most of the calculating lives: present and future values, annuities, perpetuities, interest, dispersion, correlation and the ratio family.
National income and how it is measured, the economic cycle, the balance of payments, money supply including Modern Monetary Theory, the role of central banks, monetary and fiscal policy, inflation and unemployment statistics, and nominal against real returns.
Supply and demand and why curves shift, elasticity, the theory of the firm including returns to factors and economies of scale, and market structures from perfect competition through to oligopoly.
Mean, median and mode. Variance, standard deviation and range, for both sample and population. Correlation and covariance, and how to interpret them. The syllabus notes these may be examined by simple calculation.
Present and future value of lump sums, regular payments, annuities and perpetuities. Simple and compound interest. This is the densest set of calculations in the qualification.
The difference between the two, primary objectives, quantitative techniques, chart movements, volume, momentum and moving averages.
Profitability ratios, gearing ratios, liquidity ratios and investor ratios, each listed individually in the syllabus. Understanding the purpose of each ratio is the stated requirement, not just the formula.
Economic Value Added, Market Value Added, and the dividend valuation model including Gordon growth.
A short revision checklist built from the official syllabus and from the explanations in our own question bank. Use it to check yourself after studying the chapter. It does not replace the official workbook, and it is not a prediction of what any exam will contain. Unfamiliar term? See the glossary.
The published examination specification allocates 21 of the 100 questions to this element. CISI notes the count may vary slightly between papers, so treat 21 as the weighting rather than a guarantee. Our bank holds 252 questions across the 22 learning objectives in this chapter, weighted to that same specification.
These are not predictions about any exam. They are places where the syllabus itself draws a line between two things that sound similar, which is where precise reading pays.
The syllabus names both. They divide by different denominators and give different answers on the same data.
Use the geometric mean for compounded returns over time. The arithmetic mean overstates the growth actually achieved, and questions are built around exactly that gap.
Covariance tells you the direction of the relationship. Correlation standardises it so the strength is comparable. Only correlation is bounded between minus one and one.
Read carefully which one the question wants. The workbook treatment subtracts inflation from the nominal return; the precise method divides. Both appear, and the difference grows as inflation rises.
Payments at the start of each period are worth more than payments at the end. Deciding which the question describes is usually the whole difficulty.
The objectives say understand the purpose. Expect to be asked what a ratio tells you about a business, not merely to compute it.
18 of the 25 Formula Lab lessons cover Chapter 5, across statistics & risk, time value of money, company analysis & valuation and mastery extensions. Each lesson gives you the recognition cue that tells you which formula a question wants, the formula itself, the method in order, a worked example, a sense check for spotting an answer that is wrong by a factor or a sign, and its drills. The drills run the formulas backwards as well as forwards.
This is the chapter to practise in pieces rather than as a block. Twenty two objectives across seven sections is too much for one set to sample usefully, so filter to Chapter 5 and use the difficulty filter to work upward. Take the calculations through Formula Lab first: meeting a present value question cold inside a mixed set tells you nothing you can act on.
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