BMV Certificación Genérica en Materia de Inversiones — AFORE/SIEFORE (Mexico)

Which authority regulates and supervises the Sistema de Ahorro para el Retiro, including the AFOREs and the investment regime of the SIEFOREs?

• AComisión Nacional Bancaria y de Valores (CNBV)
• BComisión Nacional de Seguros y Fianzas (CNSF)
• CComisión Nacional del Sistema de Ahorro para el Retiro (CONSAR)
• DComisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros (…

Which authority keeps the Registro Nacional de Valores (RNV), where securities must be registered before a public offering in Mexico?

• AComisión Nacional Bancaria y de Valores (CNBV)
• BBanco de México
• CSecretaría de Hacienda y Crédito Público (SHCP)
• DThe Bolsa Mexicana de Valores

What is the main function of the Instituto para la Protección al Ahorro Bancario (IPAB)?

• ATo regulate the investment regime of the SIEFOREs
• BTo set the monetary policy rate for the economy
• CTo supervise insurance and surety companies
• DTo insure bank deposits and resolve failing banks

What role does S.D. Indeval play in the Mexican securities market?

• AIt is the stock exchange where buy and sell orders are matched
• BIt is the central securities depository for custody and settlement
• CIt is a credit rating agency that rates issuers and their debt
• DIt is the self-regulatory association of brokerage firms

What is the main purpose of a central counterparty (contraparte central de valores) in exchange-traded equity settlement?

• ATo guarantee a minimum investment return to every investor
• BTo set the listing and disclosure requirements for issuers
• CTo stand between buyer and seller, reducing counterparty risk
• DTo value SIEFORE portfolios daily with independent prices

What do proveedores de precios (price vendors) supply to Mexican financial institutions?

• AIndependent daily prices and curves for valuing holdings
• BCredit ratings on issuers and their debt securities
• CExecution of client buy and sell orders on the exchange
• DSafekeeping and custody of dematerialized securities

What does the best-execution duty (deber de mejor ejecución) require of a securities intermediary handling client orders?

• ATo execute client orders only at the day's official closing price
• BTo route all orders to the venue that pays the firm the highest rebate
• CTo give priority to the firm's own proprietary orders over clients' orders
• DTo seek the best terms reasonably available for the client's order

In the Mexican securities market, what is información privilegiada?

• AAny analysis a broker prepares from an issuer's public financial statements
• BUndisclosed relevant information about an issuer that could move its price
• CHistorical prices and volumes published by the stock exchange
• DA bond rating assigned by a rating agency, once it has been published

What is the difference between an AFORE and a SIEFORE?

• AThey are two names for the same legal entity
• BA SIEFORE administers the accounts, and an AFORE invests the resources
• CThe AFORE runs the accounts; the SIEFORE invests the savings
• DAn AFORE is a government agency, and a SIEFORE is a commercial bank

How are the basic SIEFOREs now organized?

• AAs generational funds by five-year birth cohort
• BAs a single fund common to all workers of every age
• CBy the state where the worker lives and contributes
• DBy the worker's salary band registered with the IMSS

Under the final contribution table in Article 168 of the Ley del Seguro Social, what total mandatory contribution goes to the individual account of an IMSS worker earning more than 4 UMA, counting retiro plus cesantía en edad avanzada y vejez (and excluding housing and the cuota social)?

• A6.5% of the salario base de cotización
• B11.875% of the salario base de cotización
• C13.0% of the salario base de cotización
• D15.0% of the salario base de cotización

How may AFOREs charge commissions for administering individual accounts under LSAR Article 37?

• AAs a fixed monthly fee charged on each individual account
• BOnly as a percentage of assets under management, subject to a cap
• CAs a percentage of each new contribution (comisión sobre flujo)
• DAs a performance fee on returns earned above inflation

What does LSAR Article 42 assign to a SIEFORE's comité de inversión?

• AApproving the AFORE's commissions before they are filed with CONSAR
• BResolving complaints that workers file about their individual accounts
• CSetting investment policy and strategy and designating the operators
• DSetting the VaR and other risk limits in place of the comité de riesgos

Under LSAR Articles 28 and 44, what is the AFORE's reserva especial, and what is it used for?

• AA reserve invested in each SIEFORE that absorbs regime-breach losses
• BA cash fund that the AFORE uses to pay workers' pensions directly
• CA reserve deposited at Banco de México to support the peso
• DA tax reserve for the ISR due on SIEFORE investment returns

According to LSAR Article 30, who appoints the AFORE's contralor normativo, and to whom does that officer report?

• AThe director general appoints the officer, who then reports to the director general
• BCONSAR appoints the officer, who then reports only to CONSAR's supervisors
• CThe comité de inversión appoints the officer, who then reports to that committee
• DThe shareholders' assembly appoints the officer, who reports to the board and assembly

Using the expenditure approach, how is GDP measured?

• AC + I + G + X + M
• BC + I + G + (X − M)
• CC + S + T
• DC + I + G − X

A 10% price increase lowers the quantity demanded of a good by 5%. What is its price elasticity of demand?

• A−2.0, elastic
• B−1.0, unit elastic
• C0, perfectly inelastic
• D−0.5, inelastic

What is the standard view of the Phillips curve in the short run versus the long run?

• AA short-run trade-off, but a vertical long-run curve at the natural rate
• BA permanent trade-off between inflation and unemployment in both horizons
• CNo short-run relationship, but a stable trade-off in the long run
• DHigher inflation permanently drives unemployment down to zero

Among the monetary aggregates that Banco de México publishes, what is M1?

• AOnly the coins in circulation outside the banking system
• BTotal bank credit granted to the private sector
• CCurrency held by the public plus demand (sight) deposits
• DGovernment securities held by non-resident investors

According to Article 28 of the Mexican Constitution, what is Banco de México's priority objective?

• AMaximizing growth in economic output and employment
• BStability of the purchasing power of the national currency
• CFinancing the federal deficit at low interest rates
• DKeeping the peso's exchange rate fixed against the dollar

What is Banco de México's permanent inflation target?

• A0% annual inflation, with no tolerance band
• B2% ± 0.5 percentage points in core inflation
• C4% annual inflation, with no tolerance band
• D3% annual INPC inflation, ± 1 percentage point

What is Banco de México's main operating instrument for monetary policy?

• AA target for the overnight interbank interest rate
• BDirect price controls on basic consumer goods
• CA fixed exchange rate between the peso and the dollar
• DMandatory credit quotas imposed on commercial banks

How does core inflation (inflación subyacente) differ from headline inflation in Mexico?

• ACore inflation includes only services, and headline includes only goods
• BCore inflation is published by Banxico, and headline by the SHCP
• CCore inflation excludes volatile items such as agriculture and energy
• DCore inflation is always higher than headline inflation

A one-year investment pays a nominal 10.50%, and inflation over the year is 4.00%. Using the exact Fisher relationship, what is the real return?

• A6.50%
• B6.25%
• C14.50%
• D2.63%

The spot rate is MXN 18.00 per USD. Expected inflation is 4% in Mexico and 2% in the United States. Under relative purchasing power parity, what is the expected rate in one year?

• AMXN 17.65 per USD
• BMXN 18.00 per USD
• CMXN 19.08 per USD
• DMXN 18.35 per USD

A country runs a current-account deficit in the balance of payments. How must it be financed?

• AThrough net financial-account inflows or use of reserves
• BAutomatically, through a surplus in the government budget
• CBy printing domestic currency, which removes the deficit
• DIt needs no financing, because it is only an accounting entry

A government finances a larger fiscal deficit by issuing more debt in the domestic market. What crowding-out effect might follow?

• APrivate investment automatically rises alongside public spending
• BThe central bank is forced to cut its policy interest rate
• CHigher interest rates displace part of private investment
• DInflation falls immediately to zero as savings rise

Inflation turns out much higher than expected. How does this affect lenders and borrowers on fixed nominal-rate loans?

• ALenders gain and borrowers lose, because rates were fixed in advance
• BBorrowers gain and lenders lose in real terms
• CNeither is affected, because nominal rates are fixed in the contract
• DBoth gain equally, because nominal incomes rise with inflation

MXN 100,000 is invested for 5 years at 8% per year. What are the future values under simple interest and under annual compound interest?

• ASimple MXN 146,932.81; compound MXN 140,000.00
• BBoth MXN 140,000.00
• CSimple MXN 108,000.00; compound MXN 146,932.81
• DSimple MXN 140,000.00; compound MXN 146,932.81

What is the present value of 12 monthly payments of MXN 10,000 made at the end of each month, discounted at 1% per month?

• AMXN 112,550.77
• BMXN 120,000.00
• CMXN 106,494.35
• DMXN 126,825.03

Which description fits CETES (Certificados de la Tesorería de la Federación)?

• AFederal Government bonds that pay a fixed coupon every 182 days, with a face value of MXN…
• BFloating-rate notes issued by the IPAB, with coupons reset to money-market rates
• CFederal Government zero-coupon discount securities with a face value of MXN 10
• DInflation-indexed Federal Government bonds denominated in UDIs

A 28-day CETE with a face value of MXN 10.00 is quoted at an annual discount rate of 11.00% (360-day convention). What is its price?

• AMXN 9.9152
• BMXN 9.9144
• CMXN 9.1444
• DMXN 10.0856

What are the standard features of Bonos M (Bonos de Desarrollo del Gobierno Federal con tasa de interés fija)?

• AA face value of MXN 10, sold at a discount with no coupons
• BA floating coupon referenced to the overnight funding rate
• CPrincipal and coupons denominated in UDIs rather than pesos
• DMXN 100 face value with a fixed coupon every 182 days

Why might a pension fund hold Udibonos?

• AThey are indexed to the INPC through the UDI
• BThey pay a coupon linked to the peso-dollar exchange rate
• CThey carry no interest-rate risk of any kind
• DThey are issued by private companies at high yields

How do U.S. Treasury bills, notes and bonds differ?

• AAll three pay semi-annual coupons and mature in more than ten years
• BBills pay coupons, while notes and bonds are zero-coupon securities
• CBills are short discount paper; notes and bonds pay coupons over longer terms
• DThey differ only by issuer: the Treasury, federal agencies and municipalities

A 3-year bond with a face value of 100 pays an 8% annual coupon. If its yield to maturity is 10%, what is its price?

• A100.00
• B95.03
• C75.13
• D124.00

A Bono M with a face value of MXN 100 and an 8.00% annual coupon pays MXN 4.00 every 182 days. Ninety-one days have passed since the last coupon. Using linear accrual, what is the accrued interest?

• AMXN 1.00
• BMXN 4.00
• CMXN 8.00
• DMXN 2.00

A Bono M is quoted at a clean price (precio limpio) of MXN 98.50 and has MXN 2.00 of accrued interest. What is the dirty price (precio sucio) paid at settlement?

• AMXN 100.50
• BMXN 96.50
• CMXN 98.50
• DMXN 102.50

A bond pays an annual coupon of MXN 8 and trades at MXN 95. What is its current yield?

• A8.00%
• B13.68%
• C8.42%
• D7.60%

A Bono M trades below par in the secondary market. What does the yield to maturity (YTM) used to quote it represent?

• AThe annual coupon divided by the bond's face value
• BThe discount rate that equates cash-flow value with price
• CThe central bank's policy rate on the purchase date
• DThe average of the bond's historical yields

In a reporto (repurchase agreement) on government securities, what does the reportador do?

• ASells the securities outright with no obligation to take them back
• BGuarantees that the issuer will pay the coupons on the securities
• CBorrows cash by delivering securities to the other party
• DLends cash against securities it must return later for a premio

A fund invests MXN 100,000,000 as reportador in a 7-day reporto at a 10.80% annual rate (360-day convention). What amount will it receive at maturity?

• AMXN 100,210,000
• BMXN 100,000,000
• CMXN 100,207,123
• DMXN 110,800,000

What does a national-scale rating such as AAA(mex) or mxAAA on a corporate bond mean?

• AThe bond carries an explicit guarantee from the Federal Government
• BThe bond is rated above every issuer rated AAA on the global scale
• CIt has the highest credit quality relative to other Mexican issuers
• DThe bond's yield to maturity is guaranteed by the rating agency

A fund holds a callable corporate bond. After market rates fall sharply, the issuer redeems the bond early at par. Which risks has the fund suffered?

• ALiquidity risk, because the bond can no longer be sold easily
• BEarly-redemption risk, followed by reinvestment at lower rates
• CExchange-rate risk from the change in interest rates
• DDefault risk, because the issuer ended the bond early

A 3-year bond pays an 8% annual coupon on a face value of 100, trades at 95.03 and has a YTM of 10%. What is its Macaulay duration?

• A3.00 years
• B2.52 years
• C2.81 years
• D2.78 years

A SIEFORE's fixed-income portfolio is worth MXN 500,000,000 with a modified duration of 5.0. If yields rise 50 basis points across the curve, what is the approximate change in value?

• AA loss of MXN 12,500,000
• BA gain of MXN 12,500,000
• CA loss of MXN 25,000,000
• DA loss of MXN 2,500,000

A bond portfolio has a market value of MXN 100,000,000 and a modified duration of 6.5. What is its DV01 (the value change for a one-basis-point change in yield)?

• AMXN 6,500
• BMXN 650,000
• CMXN 65,000
• DMXN 6,500,000