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100+ Free IMC Practice Questions

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Question 1
Score: 0/0

Using the dividend discount (Gordon growth) model, a share expected to pay a GBP 3 dividend next year, growing at 2% with a required return of 8%, is valued at:

A
B
C
D
to track
2026 Statistics

Key Facts: IMC Exam

2 units

Unit 1 and Unit 2

CFA UK IMC Test Specification

85 Qs

Unit 1 in 1h40m

CFA UK IMC Test Specification

105 Qs

Unit 2 in 2h20m

CFA UK IMC Test Specification

65-75%

Unit 1 Pass Mark

Kaplan / CFA UK

60-70%

Unit 2 Pass Mark

Kaplan / CFA UK

240+ hrs

Suggested Study Time

CFA UK

The IMC (CISI Certificate in Investment Management, delivered with CFA UK) is an FCA-benchmarked Level 4 qualification taken as two on-demand, computer-based MCQ units. Unit 1 (The Investment Environment) has 85 questions in 1 hour 40 minutes and covers financial markets, ethics, UK regulation, client advice and UK tax. Unit 2 (Investment Practice) has 105 questions (multiple choice, item sets and gap-fill) in 2 hours 20 minutes and covers economics, accounting, quantitative methods, asset classes and portfolio management. Unit 1 pass marks are typically 65-75% and Unit 2 typically 60-70%, set by item difficulty, with no section hurdles. CFA UK suggests around 100 hours for Unit 1 and 140 hours for Unit 2.

Sample IMC Practice Questions

Try these sample questions to test your IMC exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1On the IMC, which UK regulator is responsible for the conduct of business and consumer protection across retail and wholesale financial markets?
A.The Financial Conduct Authority (FCA)
B.The Prudential Regulation Authority (PRA)
C.The Bank of England Financial Policy Committee
D.The Financial Reporting Council (FRC)
Explanation: The FCA is the UK conduct regulator, responsible for protecting consumers, ensuring market integrity and promoting effective competition. The IMC is an FCA-benchmarked qualification, so its Unit 1 syllabus centres on FCA rules.
2Under the FCA's Principles for Businesses, which Principle requires a firm to conduct its business with integrity?
A.Principle 6
B.Principle 1
C.Principle 9
D.Principle 11
Explanation: Principle 1 (Integrity) states a firm must conduct its business with integrity. The 11 Principles are high-level standards underpinning the FCA Handbook and are core Unit 1 IMC content.
3The FCA's Consumer Duty introduces a Consumer Principle. What does it require firms to deliver?
A.The lowest possible product prices
B.Guaranteed investment returns
C.Good outcomes for retail customers
D.Equal treatment of retail and professional clients
Explanation: The Consumer Duty's overarching Consumer Principle requires firms to act to deliver good outcomes for retail customers, supported by cross-cutting rules and four outcomes (products/services, price/value, consumer understanding, consumer support).
4Which body is the competent authority for listing securities on a UK regulated market (the UK Listing Authority function)?
A.The London Stock Exchange
B.HM Treasury
C.The PRA
D.The FCA
Explanation: The FCA acts as the UK Listing Authority, maintaining the Official List and the Listing, Prospectus and Disclosure and Transparency rules. This regulatory architecture is examined in IMC Unit 1.
5Under UK anti-money-laundering rules, what does Customer Due Diligence (CDD) primarily require a firm to do?
A.Identify and verify the client and understand the nature of the relationship
B.Guarantee the client's source of wealth is lawful
C.Refuse all cash transactions
D.Report every transaction to the FCA
Explanation: CDD requires identifying the customer, verifying identity from reliable sources, identifying beneficial owners, and assessing the purpose and intended nature of the business relationship under the Money Laundering Regulations.
6To whom must a firm submit a Suspicious Activity Report (SAR) when it suspects money laundering?
A.The FCA
B.The National Crime Agency (NCA)
C.HM Revenue & Customs
D.The Serious Fraud Office
Explanation: SARs are submitted to the National Crime Agency, usually via the firm's nominated Money Laundering Reporting Officer (MLRO). This is a key Unit 1 regulatory/legal point.
7Under the UK Senior Managers and Certification Regime (SM&CR), what is the main purpose of Statements of Responsibilities?
A.To list a firm's regulated permissions
B.To record client suitability assessments
C.To set out clearly the areas a senior manager is responsible for
D.To disclose a firm's capital requirements
Explanation: Under SM&CR, each senior manager has a Statement of Responsibilities setting out clearly the matters for which they are responsible and accountable, strengthening individual accountability.
8Which UK scheme provides compensation to eligible claimants if an authorised investment firm is unable to meet claims against it?
A.The Financial Ombudsman Service (FOS)
B.The Prudential Regulation Authority
C.The Investor Protection Fund
D.The Financial Services Compensation Scheme (FSCS)
Explanation: The FSCS is the UK's statutory fund of last resort, compensating eligible customers when an authorised firm fails. Investment-business protection limits are a Unit 1 examinable fact.
9A retail client complains and is dissatisfied with the firm's final response. Which body can the client take the complaint to free of charge?
A.The Financial Ombudsman Service (FOS)
B.The Financial Services Compensation Scheme
C.The High Court only
D.The FCA Enforcement Division
Explanation: The Financial Ombudsman Service provides free, independent dispute resolution for eligible complainants against authorised firms after the firm's internal complaints process is exhausted.
10Under MiFID-derived UK rules, into which broad category would a large authorised investment bank typically be classified for conduct-of-business purposes?
A.Retail client
B.Eligible counterparty
C.Elective professional client
D.Consumer
Explanation: Investment firms, credit institutions and other regulated financial institutions are typically per se eligible counterparties for eligible-counterparty business, receiving the fewest conduct protections.

About the IMC Exam

The IMC is the CISI Certificate in Investment Management, delivered jointly with CFA UK as an FCA-benchmarked, Level 4 entry qualification for investment management roles. It comprises two computer-based units: Unit 1 (The Investment Environment) covering markets, ethics, regulation, client advice and UK tax, and Unit 2 (Investment Practice) covering economics, accounting, quantitative methods, asset classes and portfolio management.

Questions

190 scored questions

Time Limit

Unit 1: 1 hour 40 minutes; Unit 2: 2 hours 20 minutes

Passing Score

Unit 1 typically 65-75% and Unit 2 typically 60-70%, with the exact pass mark set by item difficulty for each sitting

Exam Fee

Per-unit examination fees set by CISI/CFA UK; confirm current pricing on the official sites before booking (CISI / CFA UK)

IMC Exam Content Outline

Unit 1

Financial Markets and Institutions

Primary and secondary markets, exchanges, participants, clearing and settlement, central counterparties, the Bank of England and the UK financial system structure.

Unit 1

Ethics and Investment Professionalism

CFA Institute Code and Standards, integrity, conflicts of interest, market abuse, insider dealing, confidentiality and acting in clients' best interests.

Unit 1

The Regulatory Environment

FCA Principles and Handbook, SM&CR, Consumer Duty, best execution, client money (CASS), anti-money-laundering, FSCS and the Financial Ombudsman Service.

Unit 1

Legal Concepts and Client Advice

Client categorisation, suitability and appropriateness, trusts and fiduciary duties, discretionary versus advisory services and know-your-client.

Unit 1

Taxation in the UK

Income tax, capital gains tax, dividend taxation, stamp duty and SDRT, ISAs and other wrappers with current 2025/26 allowances.

Unit 2

Quantitative Methods

Time value of money, compounding and discounting, present value, perpetuities, expected return, correlation and statistical measures.

Unit 2

Economics

Microeconomics (elasticity, market structures) and macroeconomics (GDP, inflation, monetary and fiscal policy, balance of payments).

Unit 2

Accounting

Financial statements, IFRS framework, ratio analysis, EPS, ROE and the distinction between profit and cash flow.

Unit 2

Asset Classes

Equities, fixed income (gilts, corporate, index-linked, convertible and zero-coupon bonds, duration), derivatives and alternatives.

Unit 2

Portfolio Management and Performance Measurement

Modern portfolio theory, CAPM and beta, diversification, asset allocation, Sharpe ratio, alpha, time-weighted returns and behavioural finance.

How to Pass the IMC Exam

What You Need to Know

  • Passing score: Unit 1 typically 65-75% and Unit 2 typically 60-70%, with the exact pass mark set by item difficulty for each sitting
  • Exam length: 190 questions
  • Time limit: Unit 1: 1 hour 40 minutes; Unit 2: 2 hours 20 minutes
  • Exam fee: Per-unit examination fees set by CISI/CFA UK; confirm current pricing on the official sites before booking

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

IMC Study Tips from Top Performers

1Treat Unit 1 and Unit 2 as distinct exams, scheduling each when you are confident rather than cramming both together.
2Drill the FCA Principles, SM&CR, Consumer Duty and CFA Institute Standards repeatedly, as ethics and regulation dominate Unit 1.
3Memorise the current 2025/26 UK tax allowances, since exact figures (ISA, CGT exemption, dividend allowance) are commonly tested.
4For Unit 2, practise the core formulas: present value, CAPM, Sharpe ratio, bond yields and ratio analysis until they are automatic.
5Use official CFA UK mock exams to rehearse the item-set and gap-fill question styles unique to Unit 2.
6Remember there are no section hurdles, so build an overall mark and shore up your weakest topics with targeted practice.

Frequently Asked Questions

How many questions are on the IMC exam?

The IMC has two units. Unit 1 (The Investment Environment) has 85 questions to be completed in 1 hour 40 minutes. Unit 2 (Investment Practice) has 105 questions, including multiple choice, item sets and gap-fill, to be completed in 2 hours 20 minutes.

What is the IMC pass mark?

Pass marks are set per sitting based on question difficulty. Unit 1 typically falls between 65% and 75% and Unit 2 between 60% and 70%. There are no section hurdles, so candidates need an overall pass score regardless of how marks are spread across topics.

Who awards the IMC and is it FCA recognised?

The IMC is awarded by the Chartered Institute for Securities & Investment (CISI) and delivered jointly with CFA UK. It is an FCA-benchmarked, Level 4 qualification recognised as appropriate for certain investment management roles in the UK.

How is the IMC exam taken?

Both units are computer-based and available on demand. Candidates can sit them under remote invigilation or at a test centre, scheduling each unit when they are ready rather than on fixed dates.

How long does it take to study for the IMC?

CFA UK suggests around 100 hours of study for Unit 1 and 140 hours for Unit 2, roughly 240 or more hours in total. Most candidates prepare over three to six months alongside work.

What topics does the IMC cover?

Unit 1 covers financial markets, ethics and professionalism, the UK regulatory environment, legal concepts and client advice, and UK tax. Unit 2 covers economics, accounting, quantitative methods, asset classes (equities, bonds, derivatives, alternatives) and portfolio management and performance measurement.

Do I need both units to get the IMC?

Yes. To achieve the full IMC qualification you must pass both Unit 1 and Unit 2. The units can be taken in either order, and each is examined and passed independently.