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Free Practice Questions for Korea Derivatives Investment Advisor

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Key Facts: Korea Derivatives Investment Advisor Exam

100 MCQs

Total questions on the official examination (4 subjects, 25 items each)

Korea Financial Investment Association (KOFIA) Examination Blueprint

120 min

Total testing time limit in a single session

KOFIA Qualification Examination Regulations

50% / 70%

Passing standard: 50% subject floor (과락, min 13/25) and 70% overall mark (min 70/100)

KOFIA Qualification Management Rules

KRW 50,000

Official examination registration fee

KOFIA Examination Registration Portal (checked 2026-09-21)

자본시장법

Governing statutory authority under Financial Investment Services and Capital Markets Act

Financial Services Commission (FSC)

The Korea Derivatives Investment Advisor (파생상품투자권유자문인력) is the mandatory KOFIA statutory credential for soliciting derivatives, swaps, and structured products in South Korea. The official exam comprises 100 multiple-choice questions over 120 minutes, requiring a 50% subject floor and a 70% overall pass mark. OpenExamPrep provides a 100-question English study adaptation with authentic calculations and bilingual terms.

Sample Korea Derivatives Investment Advisor Practice Questions

Try these sample questions to review concepts for the Korea Derivatives Investment Advisor exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1The current KOSPI 200 index spot price is 350.00 pt. The annualized risk-free interest rate is 4.0%, and the expected dividend yield of the index is 1.0%. Using the discrete cost-of-carry model with simple interest, what is the theoretical futures price (선물 이론가격) for a contract expiring in exactly 6 months (0.5 years)?
A.353.50 pt
B.355.25 pt
C.357.00 pt
D.360.50 pt
Explanation: Under the cost-of-carry pricing model for stock index futures, the theoretical futures price is given by F = S * [1 + (r - d) * t], where S is the spot price, r is the risk-free rate, d is the dividend yield, and t is the time to maturity. Substituting the given values: F = 350.00 * [1 + (0.04 - 0.01) * 0.5] = 350.00 * [1 + 0.015] = 355.25 pt.
2In the Korea Exchange (KRX) derivatives market, market basis (시장 베이시스) is defined as the difference between the futures market price and the underlying spot price (Basis = F - S). Which of the following market conditions correctly describes a situation where the futures price exceeds the spot price (Basis > 0)?
A.Contango (콘탱고 / Normal Market)
B.Backwardation (백워데이션 / Inverted Market)
C.Theoretical Basis Parity (이론 베이시스 패리티)
D.Short Squeeze Equilibrium (숏스퀴즈 균형)
Explanation: When the market futures price exceeds the spot price (F > S), the market basis is positive (Basis > 0), which is termed Contango (콘탱고) or a Normal Market. In contrast, when the spot price exceeds the futures price (Basis < 0), the condition is called Backwardation (백워데이션) or an Inverted Market.
3Which of the following best defines basis risk (베이시스 리스크) when hedging a stock portfolio using index futures contracts?
A.The risk that the counterparty to the exchange-cleared futures contract defaults on daily mark-to-market settlements.
B.The risk of unexpected fluctuations in the price difference between the hedged spot asset and the futures contract prior to maturity.
C.The risk that trading on the exchange will be permanently halted due to regulatory intervention or circuit breakers.
D.The risk that interest rates will remain completely unchanged over the life of the hedging period.
Explanation: Basis risk arises because the basis (the spread between the spot price of the asset being hedged and the futures contract price) does not remain constant over time. If the hedge is lifted prior to contract maturity, unanticipated changes in basis can cause the hedge to be imperfect, leading to unexpected gains or losses.
4The current KOSPI 200 spot index is 400.00 pt. The 3-month risk-free rate is 3.0% p.a. and the dividend yield is 1.0% p.a. (t = 0.25 years). The theoretical futures price is 402.00 pt. If the actual 3-month KOSPI 200 futures contract is trading at 405.00 pt in the market, which index arbitrage strategy should an institutional arbitrageur execute to lock in a risk-free profit?
A.Cash-and-Carry Arbitrage (매수차익거래): Buy spot basket and sell overvalued futures.
B.Reverse Cash-and-Carry Arbitrage (매도차익거래): Short spot basket and buy undervalued futures.
C.Conversion Arbitrage (컨버전): Buy spot, buy put option, and sell call option.
D.Reversal Arbitrage (리버설): Short spot, sell put option, and buy call option.
Explanation: Because the market futures price (405.00 pt) is higher than the theoretical fair price (402.00 pt), the futures contract is overpriced relative to the spot index. The arbitrageur executes a Cash-and-Carry Arbitrage (매수차익거래) by borrowing funds to buy the underlying spot stock basket and selling (shorting) the overpriced futures contracts, locking in the 3.00 pt mispricing as arbitrage profit.
5Under what condition does an institutional investor execute a Reverse Cash-and-Carry Arbitrage (매도차익거래), and what are the primary market friction constraints that often limit its execution in South Korea?
A.When market futures price > theoretical futures price; constrained by circuit breakers.
B.When market futures price < theoretical futures price; constrained by short-selling restrictions and stock borrowing costs on spot equities.
C.When market basis equals theoretical basis; constrained by exchange transaction tax exemptions.
D.When dividend yield exceeds the risk-free rate; constrained by KOFIA licensing caps.
Explanation: Reverse Cash-and-Carry Arbitrage (매도차익거래) is triggered when the market futures price is undervalued relative to theoretical fair value (F_market < F_theory). In this trade, the investor shorts the spot equity basket and buys futures. However, practical execution is frequently hindered by short-selling regulations (차입공매도 제한), stock loan availability, and borrowing fees.
6A fund manager holds an equity portfolio with an annualized standard deviation (volatility) of 24%. The KOSPI 200 futures contract exhibits an annualized standard deviation of 20%, and the correlation coefficient between the portfolio and the futures contract is 0.85. What is the minimum-variance hedge ratio (최소분산 헤지비율, h*) for this portfolio?
A.0.71
B.0.85
C.1.02
D.1.20
Explanation: The minimum-variance hedge ratio is calculated using the formula h* = rho * (sigma_S / sigma_F), where rho is the correlation coefficient, sigma_S is the spot portfolio volatility, and sigma_F is the futures volatility. Substituting the parameters: h* = 0.85 * (0.24 / 0.20) = 0.85 * 1.20 = 1.02.
7An asset manager holds a stock portfolio valued at KRW 5,000,000,000 (5 billion KRW) with a portfolio beta of 1.20 against the KOSPI 200 index. The KOSPI 200 index futures price is 400.00 pt, and the contract multiplier is KRW 250,000. How many futures contracts must the manager sell to completely hedge the systemic market risk of the portfolio (target beta = 0)?
A.40 contracts
B.50 contracts
C.60 contracts
D.75 contracts
Explanation: The value of one KOSPI 200 futures contract is Futures Price * Multiplier = 400.00 * 250,000 KRW = 100,000,000 KRW (100 million KRW). The optimal number of contracts to sell for a full hedge is N = beta * (Portfolio Value / Futures Contract Value) = 1.20 * (5,000,000,000 / 100,000,000) = 1.20 * 50 = 60 contracts.
8An institutional fund holds an equity portfolio valued at KRW 10,000,000,000 (10 billion KRW) with an existing beta of 0.80. The fund manager wants to actively adjust the overall portfolio beta upward to 1.40 to capitalize on an expected bull market. If KOSPI 200 futures trade at 500.00 pt with a multiplier of KRW 250,000, what futures transaction should the manager execute?
A.Buy 48 contracts
B.Sell 48 contracts
C.Buy 64 contracts
D.Buy 112 contracts
Explanation: To adjust portfolio beta from beta to beta*, the number of futures contracts required is N = (beta* - beta) * (Portfolio Value / Futures Contract Value). The value of one contract is 500.00 * 250,000 KRW = 125,000,000 KRW. Thus, N = (1.40 - 0.80) * (10,000,000,000 / 125,000,000) = 0.60 * 80 = +48 contracts. Since the result is positive, the manager must buy (long) 48 contracts.
9What happens to the market basis (F - S) of a KOSPI 200 futures contract as the contract approaches its final settlement day (만기일)?
A.The basis expands exponentially due to rising time decay.
B.The basis converges toward zero because carrying costs diminish to zero (만기수렴현상).
C.The basis fluctuates unpredictably between +50 and -50 points regardless of spot prices.
D.The basis is permanently locked at the initial opening trade basis established at contract inception.
Explanation: As a futures contract approaches maturity (t -> 0), the carrying costs (interest rate financing minus dividend yield) decline toward zero. Consequently, the theoretical futures price converges to the spot price, and the market basis converges to zero on the final settlement day. This phenomenon is known as basis convergence (만기수렴현상).
10In commodity futures pricing, how does the concept of convenience yield (편익수익률, y) affect the cost-of-carry relationship F = S * [1 + (r + u - y) * t], and what market condition does a high convenience yield induce?
A.Convenience yield represents the non-monetary benefit of physically holding inventory; an exceptionally high convenience yield drives the market into backwardation (F < S).
B.Convenience yield represents storage costs; high convenience yield always produces deep contango.
C.Convenience yield is the exchange clearing fee; it has no impact on spot-futures relationships.
D.Convenience yield represents dividend yield for financial indices and cannot apply to physical commodities.
Explanation: Convenience yield (y) reflects the premium associated with holding physical inventory to meet sudden production needs or stockouts. In the cost-of-carry formula F = S * [1 + (r + u - y) * t] (where u is storage cost), when convenience yield y is exceptionally high (y > r + u), the carrying cost becomes negative, causing the futures price to trade at a discount to spot (Backwardation).

About the Korea Derivatives Investment Advisor Exam

The Korea Derivatives Investment Advisor (파생상품투자권유자문인력) is the statutory qualification administered by the Korea Financial Investment Association (한국금융투자협회 / KOFIA) under the Financial Investment Services and Capital Markets Act (자본시장과 금융투자업에 관한 법률). Financial institution professionals must hold this credential to solicit, recommend, or provide investment advice regarding exchange-traded derivatives (futures and options), over-the-counter (OTC) derivatives (swaps, forwards), and complex derivative-linked structured products (ELS, DLS, ELW) to general investors. The curriculum spans four comprehensive subjects: Derivatives I (futures pricing, basis, hedging ratios, arbitrage, option payoffs, put-call parity, and Greeks), Derivatives II (IRS, CRS, comparative advantage swap structuring, ELS knock-in barrier conditions, and CDS), Risk Management & Professional Ethics (VaR calculation, stress testing, margin call computation, 반대매매 execution, fiduciary duties, and the Financial Consumer Protection Act), and Derivatives Laws & Regulations (Capital Markets Act provisions, qualified investor tiers, KOFIA regulations, and KRX circuit breakers and sidecar mechanisms). This practice bank provides an independent 100-question English study adaptation featuring standard Korean financial terminology.

Exam sponsor: Korea Financial Investment Association (한국금융투자협회 / KOFIA). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Subject 1: Derivatives I (파생상품 Ⅰ) 25 questions; Subject 2: Derivatives II (파생상품 Ⅱ) 25 questions; Subject 3: Risk Management & Professional Ethics (리스크관리 및 직무윤리) 25 questions; Subject 4: Derivatives Laws & Regulations (파생상품 법규) 25 questions. All 100 questions are completed in a single 120-minute session.

Time Limit

120 minutes

Passing Score

Minimum 50% in each subject (과락 50% floor: at least 13/25) and an overall score of at least 70% (70/100 points)

Exam / Certification Fees

KRW 50,000 examination fee; mandatory investor-protection education KRW 104,000 (KOFIA, verified 2026-09-21)

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

25%

Subject 1: Derivatives I (파생상품 Ⅰ)

Theoretical futures pricing ($F = S[1 + (r - d)t]$), market basis, hedge ratio ($h = \rho \sigma_S / \sigma_F$), index arbitrage, option payoff profiles, put-call parity ($C + PV(K) = P + S$), option Greeks (Delta, Gamma, Vega, Theta, Rho), bull/bear spreads, straddles, strangles, and delta hedging.

25%

Subject 2: Derivatives II (파생상품 Ⅱ)

Interest rate swaps (IRS), currency swaps (CRS), comparative advantage swap mechanics, swap rate determination and net cash flow settlement, structured products (ELS, DLS, ELW), barrier options (knock-in/knock-out), credit derivatives (CDS, TRS), and structural risk analysis.

25%

Subject 3: Risk Management & Professional Ethics (리스크관리 및 직무윤리)

Value at Risk (VaR) computation using Delta-Normal and Historical simulation methods, stress testing, backtesting, credit and liquidity risk management, initial/maintenance margin mechanics, margin call calculations, liquidation procedures (반대매매), fiduciary duty, conflict-of-interest prevention, and the 6 core sales principles of the Financial Consumer Protection Act.

25%

Subject 4: Derivatives Laws & Regulations (파생상품 법규)

Capital Markets Act (자본시장법) statutory frameworks for exchange-traded vs OTC derivatives, licensing requirements for investment dealing and brokerage, qualified retail investor regulations, KOFIA self-regulatory codes and qualification governance, and KRX market operations (circuit breakers, sidecars, daily price limits, and quotation rules).

Preparing for the Korea Derivatives Investment Advisor Exam

What You Need to Know

  • Passing score: Minimum 50% in each subject (과락 50% floor: at least 13/25) and an overall score of at least 70% (70/100 points)
  • Assessment: Subject 1: Derivatives I (파생상품 Ⅰ) 25 questions; Subject 2: Derivatives II (파생상품 Ⅱ) 25 questions; Subject 3: Risk Management & Professional Ethics (리스크관리 및 직무윤리) 25 questions; Subject 4: Derivatives Laws & Regulations (파생상품 법규) 25 questions. All 100 questions are completed in a single 120-minute session.
  • Time limit: 120 minutes
  • Exam / certification fees: KRW 50,000 examination fee; mandatory investor-protection education KRW 104,000 (KOFIA, verified 2026-09-21) Official sources

Using Our Practice Resources

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

Korea Derivatives Investment Advisor: Suggested Study Strategy

1Master core derivatives formulas: Be fluent in computing futures theoretical pricing [F = S * (1 + (r - d) * t)], basis, optimal hedge ratio [h = rho * (sigma_S / sigma_F)], number of contracts, put-call parity [C + PV(K) = P + S], and option Delta hedging adjustments.
2Understand swap cash flows and comparative advantage: Practice net settlement cash flow calculations for plain vanilla IRS and currency swaps (CRS), and understand how Quality Spread Differential (QSD) is divided between counterparties.
3Analyze structured product payoffs: Thoroughly review step-down autocallable Equity-Linked Securities (ELS) barrier conditions, early redemption strike schedules, and final maturity loss calculations when a knock-in (KI) event occurs.
4Distinguish initial margin, maintenance margin, and margin call triggers: Remember that when customer equity falls below the maintenance margin (유지증거금), a margin call is triggered requiring funds to restore the account to the INITIAL margin level (위탁증거금), not merely back to the maintenance level.
5Learn Capital Markets Act investor protections and KRX market safeguards: Focus on the 6 core sales principles under the Financial Consumer Protection Act, unsolicited solicitation (불초청권유) rules, qualified investor tiers for derivatives, and KRX circuit breaker and sidecar activation thresholds.

Frequently Asked Questions

What is the official structure and passing standard of the Korea Derivatives Investment Advisor examination?

The official examination administered by the Korea Financial Investment Association (한국금융투자협회 / KOFIA) consists of 100 four-option multiple-choice questions (객관식 4지선다형) administered across 120 continuous minutes. The test is divided into four subjects: Derivatives I (25 items), Derivatives II (25 items), Risk Management & Professional Ethics (25 items), and Derivatives Laws & Regulations (25 items). Candidates must score at least 50% in each subject (과락 50% floor, i.e., at least 13 points out of 25 in every subject) and obtain an overall total score of at least 70% (70 out of 100 points) to pass.

Who is legally required to hold the Derivatives Investment Advisor (파생상품투자권유자문인력) qualification?

Under the Financial Investment Services and Capital Markets Act (자본시장법), any employee or officer of a financial investment company (such as a securities brokerage, bank, or asset management firm) who solicits, recommends, or executes investment contracts for derivatives, exchange-traded futures/options, OTC derivatives (such as interest rate swaps or currency swaps), or derivative-linked securities (such as ELS, DLS, and ELW) with general investors must be registered with KOFIA as a qualified Derivatives Investment Advisor.

Are there any eligibility restrictions or educational prerequisites to take the exam?

No. The examination is open to all individuals regardless of academic background, nationality, or age. However, to formally register as an active investment advisor with KOFIA and solicit customers, the individual must be employed by an authorized financial investment company and complete the mandatory KOFIA registration training.

What types of calculations frequently appear on the Derivatives Investment Advisor exam?

Frequent quantitative questions include: (1) Cost-of-carry futures theoretical pricing [F = S * (1 + (r - d) * t)], (2) Basis calculations (contango vs backwardation) and cash-and-carry arbitrage profits, (3) Minimum-variance hedge ratio and optimal number of futures contracts, (4) Put-call parity arbitrage and synthetic position payoffs, (5) Delta-neutral hedge position sizes, (6) Interest rate swap net settlement cash flows and comparative advantage QSD splits, (7) Step-down ELS knock-in maturity loss calculations, (8) Delta-Normal Value at Risk (VaR), and (9) Margin call calculations and maintenance margin restoration amounts.

Is this OpenExamPrep question bank an official test or an independent preparation resource?

This practice bank is an independent English-language MCQ study adaptation created by OpenExamPrep to help candidates master the quantitative models, financial mechanics and regulatory principles the official KOFIA syllabus covers. It keeps standard Korean legal and financial terminology in parentheses (e.g. 반대매매, 유지증거금, 베이시스, 풋콜패리티) so you recognise the exact terms the real paper uses. It is not an official translation of the KOFIA examination and does not simulate its Korean-language format.