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Key Facts: EIP Exam

72%

Pass Rate

EFPA Average

70%

Passing Score

28/40 questions

80 hrs

Min Tuition

Required Course

EQF 4

EQF Level

Certification

1 yr

Validity

CPD Required

€350

Avg Exam Fee

Varies by country

The EFPA EIP (European Investment Practitioner) certification is an EQF Level 4 credential designed for financial advisors. It meets ESMA guidelines for providing investment advice, requiring a 70% score to pass (28/40 questions) in 90 minutes. Average study time is 80 hours across 8 modular finance topics.

Sample EIP Practice Questions

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

1Which of the following is a key characteristic of money market instruments?
A.High maturity, high credit risk, and low liquidity
B.High liquidity, short-term maturity, and relatively low risk
C.Variable dividend payouts, long-term maturity, and high price volatility
D.No secondary market trading and guaranteed return by the central bank
Explanation: Money market instruments are debt securities characterized by high liquidity, short maturities (typically less than one year), and relatively low risk. They are used by governments, financial institutions, and corporations to manage short-term liquidity needs. The low default risk and short duration mean their price volatility is minimal.
2When interest rates in the market rise, what is the typical impact on the price of existing fixed-rate bonds?
A.The prices of existing bonds increase because their coupon payments become more valuable.
B.The prices of existing bonds decrease because their coupon payments are less attractive compared to new bonds.
C.The prices of existing bonds remain unchanged because the coupon rate is fixed at issuance.
D.The prices of existing bonds become highly volatile but always return to their par value immediately.
Explanation: There is an inverse relationship between interest rates and bond prices. When interest rates rise, new bonds are issued with higher coupons, making existing bonds with lower coupons less attractive. To compete, the price of existing bonds must fall to increase their yield to maturity to match the new market rate.
3What type of index weighting methodology does the Euro Stoxx 50 index utilize?
A.Price-weighted, where the index value is determined solely by the stock prices of its components.
B.Equal-weighted, where every component has the exact same weight regardless of size or price.
C.Free-float market capitalization-weighted, where weight is proportional to the market value of shares available for public trading.
D.Fundamental-weighted, based on accounting metrics like book value, cash flow, and sales.
Explanation: The Euro Stoxx 50 is a blue-chip index representing the eurozone's leading supersector leaders. It uses a free-float market capitalization weighting scheme, which means a company's representation in the index is proportional to its market value adjusted for shares actually available for public trading.
4In option contracts, what are the rights and obligations of a buyer of a put option?
A.The right to buy the underlying asset, with no obligation to do so.
B.The obligation to buy the underlying asset at a specified price.
C.The right to sell the underlying asset, with no obligation to do so.
D.The obligation to sell the underlying asset at a specified price.
Explanation: A put option gives the buyer the right, but not the obligation, to sell the underlying asset at the strike price within a specified timeframe. The buyer pays a premium to the seller (writer) for this right. If the market price falls below the strike price, the buyer can exercise this option to sell at a price higher than the market.
5What is the primary operational difference between open-end mutual funds and exchange-traded funds (ETFs)?
A.Mutual funds can only invest in debt instruments, while ETFs can only invest in equities.
B.Mutual fund shares trade continuously on stock exchanges throughout the day, while ETFs are priced only once at the end of the day.
C.Mutual fund shares are bought and sold directly from the fund manager at the end-of-day NAV, while ETFs trade continuously on an exchange.
D.Mutual funds are exempt from regulatory oversight in the EU, whereas ETFs must fully comply with UCITS directives.
Explanation: Open-end mutual funds are bought or redeemed directly from the fund management company at the Net Asset Value (NAV) calculated at the close of the trading day. In contrast, ETFs trade on a secondary stock exchange throughout the day at market-determined prices, which can deviate slightly from the underlying NAV.
6Which of the following components is included in the expenditure approach to calculating Gross Domestic Product (GDP)?
A.Consumption, Investment, Government Spending, and Net Exports (Exports minus Imports).
B.Wages, Interest, Rent, and Corporate Profits.
C.Value added at each stage of production across primary, secondary, and tertiary sectors.
D.Personal Income, Savings, and Financial Market Transactions.
Explanation: The expenditure approach calculates GDP as the sum of all final goods and services purchased in an economy. The formula is GDP = Consumption + Investment + Government Spending + (Exports - Imports), representing total demand for domestic production.
7In the foreign exchange market, what is meant by the 'spot exchange rate'?
A.The exchange rate locked in today for a currency transaction that will occur at a specific date in the future.
B.The exchange rate at which a currency transaction is executed for immediate delivery, typically within two business days.
C.The average exchange rate of a currency calculated over the past calendar year.
D.The exchange rate set by the European Central Bank as a target for monetary union members.
Explanation: The spot exchange rate is the current price of one currency in terms of another for immediate settlement. For most currency pairs, the standard settlement cycle for spot transactions is two business days (T+2) from the transaction date.
8What is the primary monetary policy objective (primary mandate) of the European Central Bank (ECB)?
A.To maintain price stability in the eurozone, defined as inflation at 2% over the medium term.
B.To minimize the unemployment rate within the European Union member states.
C.To manage the government debt levels of eurozone member countries.
D.To maintain a fixed exchange rate between the Euro and the US Dollar.
Explanation: Under the Treaty on the Functioning of the European Union, the primary objective of the ECB is to maintain price stability. The Governing Council defined this objective as maintaining year-on-year inflation at 2% over the medium term, as measured by the Harmonised Index of Consumer Prices (HICP).
9A financial institution enters into a repurchase agreement (repo) where it sells government bonds for €10,000,000 and agrees to buy them back in 7 days for €10,002,000. What is the annualized repo rate using a money market day-count convention (ACT/360)?
A.1.043%
B.1.033%
C.1.029%
D.1.020%
Explanation: Under the ACT/360 day-count convention, the formula for the repo rate is: Rate = (Repo Price - Purchase Price) / Purchase Price * (360 / Days). Plugging in the values: (€10,002,000 - €10,000,000) / €10,000,000 * (360 / 7) = 0.0002 * 51.42857 = 0.0102857, or 1.029%.
10A 5-year corporate bond has a modified duration of 4.2. If market interest rates decrease by 75 basis points (0.75%), what is the estimated percentage change in the bond's price?
A.A decrease of 3.15%
B.An increase of 3.15%
C.A decrease of 5.60%
D.An increase of 5.60%
Explanation: Modified duration measures the percentage change in a bond's price for a 1% change in yield. The formula is: % Change in Price = -Modified Duration * Change in Yield. Here, Change in Yield = -0.0075 (decrease). Therefore, % Change in Price = -4.2 * (-0.0075) = +0.0315, or an increase of 3.15%.

About the EIP Exam

Intermediate investment advisory certification matching ESMA compliance requirements. 40 MCQs in 90 minutes. 70% passing score.

Questions

40 scored questions

Time Limit

90 minutes

Passing Score

70%

Exam Fee

€350 (EFPA)

EIP Exam Content Outline

40.00%

Financial Instruments and Markets

Economic indicators, equity, debt, derivatives, and money markets.

10.00%

Investment Funds and Companies

UCITS, ETFs, fund valuation, and hedge funds.

12.50%

Portfolio Management

Portfolio risk/return, CAPM, and asset allocation strategies.

7.50%

Insurance

Life insurance products, unit-linked policies, and IDD rules.

5.00%

Pension Plans and Funds

Retirement products, defined benefits/contributions.

10.00%

Taxation

Tax treatments of investment returns and withholding taxes.

7.50%

Regulatory and Compliance

MiFID II investor protection, AML/CFT rules, and MAR.

7.50%

Advising and Planning

Client suitability profiling and financial planning ethics.

How to Pass the EIP Exam

What You Need to Know

  • Passing score: 70%
  • Exam length: 40 questions
  • Time limit: 90 minutes
  • Exam fee: €350

Keys to Passing

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

EIP Study Tips from Top Performers

1Dedicate ample study time to Financial Instruments and Markets, as it constitutes 40% of the entire exam.
2Understand the key difference between UCITS-compliant funds and alternative investment structures.
3Review MiFID II suitability guidelines carefully, focusing on disclosures and client profiling rules.
4Practice basic portfolio management formulas, specifically CAPM, Sharpe ratio, and beta interpretation.
5Use our 100 free practice questions to test your knowledge across all 8 modules before scheduling.

Frequently Asked Questions

What is the EFPA EIP exam pass rate?

The average EFPA EIP exam pass rate is approximately 72% across all national European affiliates. To pass, you must correctly answer at least 70% (28 out of 40) of the multiple-choice questions within the 90-minute limit.

How long do I need to study for the EFPA EIP exam?

Most candidates require about 80 hours of study time, which includes the mandatory 80 classroom/tuition hours from an accredited EFPA provider. A study window of 4-8 weeks is highly recommended.

Can I take the EFPA EIP exam online?

Yes, many national affiliates offer remote proctoring options for the EIP exam, though some regions still hold in-person exams. You should verify options with your local member association (such as EFPA Spain or EFPA Luxembourg).

What is the fee for the EFPA EIP exam?

The exam registration fee varies by country and affiliate, ranging between €300 and €500. This fee typically covers the administrative costs, exam session, and the first year of certification registration upon passing.