Relevant to the following CISI qualifications: ICWIM, ICAWM, Derivatives, IISI DEFINITION Derivatives markets attract three main types of participants: hedgers, speculators, and arbitrageurs. Hedgers reduce the risk that they face in terms of asset prices by using futures or options markets. ...

Relevant to the following CISI qualifications: ICWIM, ICAWM, Risk in Financial ServicesDEFINITIONCorporate governance is the system by which organizations are directed and controlled. The defects of poor corporate governance have recently been very visible in financial institutions around the world....

Relevant to the following CISI qualifications: ICWIM, ICAWM, SecuritiesDEFINITIONPublicly traded companies are under an obligation to deliver regular trading updates to the market, ensuring that at all times they present a reasonable reflection of their actual trading performance. However, the terms...

An Overview of Shariah-Compliant Funds Relevant to the following CISI qualifications: Islamic Finance Qualification DEFINITION Shariah-compliant funds are investment vehicles which are fully compliant with the principles of Islam. The funds are prohibited from making investments in indu...

Relevant to the following CISI qualifications: ICWIM, ICAWM, Securities, Risk in Financial ServicesDEFINITIONThe time value of money is based on the premise that most people would choose to receive, say, $10,000 now, rather than the same sum in five years’ time. Why? Firstly, because any rational ...

Relevant to the following CISI qualifications: Risk in Financial Services, DerivativesDEFINITIONThe successful management of a portfolio includes maximizing returns from shifts in exchange and interest rates, which in turn requires an appreciation of the associated exposures. Not knowing the exposur...

Relevant to the following CISI qualifications: Risk in Financial ServicesDEFINITIONThe concept of “liquidity risk” tends to be very loosely defined. It is used most commonly with reference to the banking and finance industry, but it is an important issue for all companies. Broadly, liquidity ris...

Relevant to the following CISI qualifications: Risk in Financial Services, Derivatives, ICAWMDEFINITIONRisks arise from the way the value of an investment changes with the level of interest rates. This is most clearly seen in the value of fixed-rate investments such as bonds. If interest rates rise,...

Relevant to the following CISI qualifications: Risk in Financial Services, Derivatives, ICAWMDEFINITIONA company that imports raw materials, exports finished goods, or has overseas assets or subsidiaries is exposed to fluctuations in exchange rates. Adverse movements can wipe out export profits, whi...

CISI Exam Prep: Hedging Credit Risk – Case Studies and StrategiesRelevant to the following CISI qualifications: Risk in Financial Services, Derivatives, ICAWMDEFINITIONCredit risk is the uncertainty about the ability of a debtor or the counterparty in an agreement to make a payment. Strategies for...