100+ Free Bulgarian Investment Consultant Exam Practice Questions

Part One — Economics (Икономикс)

Demand and supply analysis and elasticity; money and inflation; monetary and fiscal policy; GDP/GNP, aggregate demand and supply and the drivers of economic growth; and currency markets — quotations, spreads, cross rates and arbitrage, factors affecting currency prices, exchange-rate parity, floating and fixed regimes, and absolute and relative purchasing power.

Part Two — Financial Instruments (Финансови инструменти)

Classification of financial instruments by the rights they confer; money market instruments; fixed-income instruments; ordinary and preference shares; the main classes of derivatives; exchange-traded funds and contractual funds; and the organisation of an initial issue and the stages of public offering and underwriting.

Part Three — Financial Markets (Финансови пазари)

Nature, functions and types of financial instrument markets; participants including investment intermediaries, management companies, alternative investment funds and AIFMs, special purpose and securitisation companies, collective investment schemes, pension funds and insurers; and market infrastructure — continuous trading and auctions, order types, clearing and settlement, regulated market rules, margin and short trades, the Bulgarian Stock Exchange, OTC and multilateral trading, market indices and Central Depository AD.

Part Four — Regulation of the Financial Market in Bulgaria (Регулиране на финансовия пазар в България)

The Financial Supervision Commission and its regulatory and supervisory functions; FSC instruments on investment supervision; KYC, market abuse and AML/CFT requirements; public offering and prospectus rules; and the regulation of investment consultants and brokers, investment intermediaries, management companies and collective investment schemes, alternative investment funds, bank and pension fund investment activity, public companies, and special purpose and securitisation companies.

Part Five — Financial Statement Analysis (Анализ на финансови отчети)

Analysis of the balance sheet, income statement and cash flow statement; accounting policies and their effect on reported results; ratio analysis covering liquidity, activity, solvency, profitability and valuation ratios; DuPont decomposition of return on equity; and the use of financial statement analysis as an input to valuation.

Part Six — Corporate Finance (Корпоративни финанси)

Capital budgeting and investment appraisal, the cost of capital and weighted average cost of capital, capital structure and leverage, and dividend and distribution policy.

Part Seven — Return and Risk (Възвръщаемост и риск)

Time value of money — present and future value of single cash flows and series, simple and compound interest, annuities and perpetuities; nominal, effective and real return, current, capital and total return, time-weighted and money-weighted return, and expected return of instruments and portfolios; and risk analysis — symmetric and asymmetric risk measures, standard deviation and variance, value at risk and conditional VaR, market versus specific risk, issuer versus security risk, duration, modified duration and credit ratings, and portfolio risk.

Part Eight — Valuation and Application of Financial Instruments (Оценка и приложение на финансови инструменти)

Fixed income — market and instrument overview, bond pricing, quoted price, accrued interest and invoice price, yield measures and the price/coupon/current yield/YTM relationship, term structure and the yield curve, and credit and interest-rate risk. Equity — industry analysis, required return on equity via CAPM and the bond-yield-plus-risk-premium method, sustainable growth, dividend discount models including the Gordon growth, two-stage, H- and three-stage models, free cash flow models (FCFE and FCFF), terminal value, and price and enterprise multiples. Derivatives — options and option strategies, put-call parity, embedded options, forwards and futures pricing, and swaps.

Part Nine — Portfolio Management (Управление на портфейли)

The portfolio management process, investment objectives and constraints, risk tolerance, Markowitz portfolio theory and the components of portfolio risk, diversification and the efficient frontier, the capital market line and security market line, asset allocation, and performance evaluation and attribution.