100+ Free PKMC Module II Practice Questions

Pass your Pasaran Kewangan Malaysia Certificate (PKMC) Module II — The Money Market exam on the first try — instant access, no signup required.

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Key Facts: PKMC Module II Exam

40 MCQs + 3 essays

The format of the official PKMC Module II written examination

PPKM Syllabus Outline

120 minutes

Time allowed to complete the official examination

PPKM Syllabus Outline

75% pass mark

High passing score required to pass PKMC Module II

PPKM Examination Guidelines

Actual/365

Standard interest day-count convention for MYR markets

BNM Guidelines

Standardised Base Rate

SBR is linked 1-to-1 with BNM OPR for retail loans

BNM Reference Rate Framework

100

Free original practice questions here

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The PKMC Module II (The Money Market) exam is a professional treasury and money market licensing qualification in Malaysia, jointly awarded by PPKM (FMAM) and AICB. The actual exam comprises 40 MCQs and 3 essay questions in a 2-hour sitting, with a high pass mark of 75%. The syllabus covers money market structure, BNM monetary operations, financial math, debt securities (MGS, GII, Cagamas, BAs, NIDs), SRR and Eligible Liabilities, reference rates, cost of funds, yield curves, and the Islamic Money Market. This 100-question practice bank provides comprehensive prep across all 10 key syllabus domains with detailed step-by-step solutions and explanations.

Sample PKMC Module II Practice Questions

Try these sample questions to test your PKMC Module II 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 represents the primary distinction between the money market and the capital market?

A.The money market deals with short-term debt instruments with maturities of one year or less, while the capital market deals with long-term debt and equity instruments.

B.The money market is regulated exclusively by Bank Negara Malaysia, while the capital market is regulated exclusively by the Companies Commission of Malaysia.

C.The money market is open only to domestic retail investors, while the capital market is limited to international wholesale institutional participants.

D.The money market involves equity trading on Bursa Malaysia, while the capital market deals with over-the-counter debt transactions.

Explanation: The fundamental difference between the money market and the capital market is the maturity of the instruments traded. The money market deals with short-term, highly liquid debt instruments with maturities of one year or less, whereas the capital market deals with long-term debt (bonds) and equity securities.

2In the context of primary and secondary markets, which of the following transactions represents a primary money market transaction?

A.A commercial bank selling an existing Malaysian Government Security (MGS) to another bank via an OTC broker.

B.An investor purchasing newly issued Treasury Bills directly from the central bank's auction through a principal dealer.

C.A corporate treasurer purchasing a Negotiable Instrument of Deposit (NID) from a secondary market dealer.

D.A central bank conducting a bilateral repo transaction with a commercial bank to absorb overnight liquidity.

Explanation: A primary market transaction involves the creation and initial sale of new securities by issuers to raise funds. Purchasing newly issued Treasury Bills at an auction represents a primary market transaction, whereas trading existing securities between market participants represents secondary market activities.

3Which system serves as the electronic transfer system for funds and securities settlements in Malaysia, operating on a real-time gross settlement basis?

A.RENTAS (Real-time Electronic Transfer of Funds and Securities System)

B.FAST (Fully Automated System for Issuing/Tendering)

C.Bursa Link

D.SPPK (Sistem Penjelasan Cek Kebangsaan)

Explanation: RENTAS is the Real-time Electronic Transfer of Funds and Securities System in Malaysia. It is a multi-currency real-time gross settlement (RTGS) system that processes high-value interbank funds transfers and debt securities settlements.

4What is the primary role of FAST (Fully Automated System for Issuing/Tendering) in the Malaysian financial market?

A.To clear checks and retail electronic payments on a daily basis.

B.To act as a central depository for all private debt securities and government bonds.

C.To provide a web-based platform for tendering, issuing, and retrieving information on Malaysian debt securities and money market instruments.

D.To match equity buy and sell orders on the Bursa Malaysia Main Market.

Explanation: FAST is a web-based system designed to facilitate the primary issuance and tendering of government and corporate debt securities, money market instruments, and central bank bills in Malaysia.

5Under the wholesale market structure in Malaysia, which of the following entities is eligible to directly participate in the interbank money market?

A.Licensed commercial banks, licensed investment banks, and licensed Islamic banks.

B.Any public listed company on the Bursa Malaysia Main Board.

C.Retail individual investors with a minimum net worth of RM3 million.

D.All domestic proprietary trading firms and credit cooperative societies.

Explanation: The Malaysian interbank money market is a wholesale market restricted to licensed banking institutions (commercial banks, investment banks, and Islamic banks) and other institutions approved by Bank Negara Malaysia.

6Which of the following best describes an 'Over-the-Counter' (OTC) financial market?

A.A physical trading floor where dealers yell out bids and offers to a centralized auctioneer.

B.A decentralized market where participants trade directly with each other via telephone or electronic platforms without a centralized exchange.

C.A regulated retail exchange where share prices are printed on public tickers.

D.A market where only derivative options are traded using standardized exchange contracts.

Explanation: An Over-the-Counter (OTC) market is a decentralized market. Trading is conducted bilaterally between dealers and counterparties via electronic communications platforms (like Bloomberg) or telephones, without a physical exchange floor or centralized order-matching exchange.

7What is the settlement cycle for most Over-the-Counter (OTC) money market debt securities (such as MGS or corporate bonds) in the Malaysian market when traded between financial institutions?

A.Real-time or T+1 by default, with settlement processed through RENTAS.

B.T+3 for all transactions, matching retail equity markets.

C.T+5, allowing physical certificate delivery.

D.Monthly settlement on the last business day.

Explanation: In the Malaysian money and debt markets, OTC debt securities trades settle through RENTAS, typically on a T+1 (next business day) or T+0 (same day) basis as agreed between counterparties.

8In the Malaysian financial system, which regulator is primarily responsible for maintaining monetary and financial stability, including regulating the interbank cash market?

A.Securities Commission Malaysia (SC)

B.Bank Negara Malaysia (BNM)

C.Bursa Malaysia Berhad

D.Ministry of Finance (MoF)

Explanation: Bank Negara Malaysia (BNM) is the central bank of Malaysia. Under the Central Bank of Malaysia Act 2009, it is mandated to promote monetary and financial stability, which includes managing interbank liquidity, conducting monetary operations, and regulating the money market.

9Which of the following functions is performed by a money broker in the Malaysian money market?

A.Acting as a principal to buy and sell securities for their own proprietary book.

B.Acting purely as an intermediary to facilitate transactions between buyers and sellers, without taking a position themselves.

C.Providing credit facilities and underwriting corporate bond issuances.

D.Setting the Statutory Reserve Requirement (SRR) ratio for commercial banks.

Explanation: Money brokers in Malaysia act as neutral intermediaries (or matchmakers) who bring together buyers and sellers in the interbank market. They receive a brokerage commission and are prohibited from taking positions as principals or holding inventory.

10What is the concept of 'delivery-versus-payment' (DvP) in RENTAS securities settlement?

A.Securities are delivered first, and payment is settled at the end of the month.

B.A settlement mechanism that ensures securities delivery occurs if and only if corresponding payment occurs, eliminating settlement default risk.

C.A system where payment is made, but delivery of securities is deferred for up to 5 business days.

D.A contract where the buyer has the option to cancel the trade before delivery.

Explanation: Delivery-versus-payment (DvP) is a settlement arrangement whereby the transfer of securities is synchronized with the transfer of cash. It ensures that the buyer receives the securities only if the seller receives payment, eliminating principal risk during settlement.

About the PKMC Module II Exam

The Pasaran Kewangan Malaysia Certificate (PKMC) Module II (The Money Market) is a key licensing requirement for treasury dealers, money market dealers, and money brokers in the Malaysian wholesale financial markets. The exam is jointly administered by the Persatuan Pasaran Kewangan Malaysia (PPKM / FMAM) and the Asian Institute of Chartered Bankers (AICB). It tests candidates' knowledge of financial market components, the flow of funds in the Malaysian economy, Bank Negara Malaysia's (BNM) monetary policy implementation and operations (such as repo, direct borrowing, BNM bills), and the cash interbank market (including KLIBOR and the Reference Rate Framework). Candidates must master basic financial calculations including simple interest, discount, yield-to-maturity, and bond pricing for instruments like Malaysian Government Securities (MGS), Government Investment Issues (GII), Treasury Bills, Negotiable Instruments of Deposit (NID), Cagamas bonds, and Bankers' Acceptances (BA). Additionally, the module covers regulatory compliance such as Eligible Liabilities (EL) and Statutory Reserve Requirements (SRR), Bank Negara settlement systems (like RENTAS), Cost of Funds computations, asset-liability management (gapping and yield curves), and the Islamic Money Market framework (Islamic Interbank Money Market - IIMM, Commodity Murabahah, Sukuk). Note that the real examination consists of 40 MCQs and 3 essay questions in 2 hours, with a passing mark of 75%.

Assessment

40 multiple-choice questions (MCQs) and 3 compulsory written essay/calculation questions covering the money market, monetary operations, financial mathematics, cash and debt securities instruments, statutory reserve requirements, reference rate frameworks, cost of funds, yield curves, and Islamic money market operations.

Time Limit

120 minutes (2 hours).

Passing Score

75% — a candidate must answer at least 30 of the 40 MCQs correctly to pass.

Exam Fee

Approximately RM800 per sitting, excluding mandatory structured seminar fees (which are approximately RM2,700). (Financial Markets Association of Malaysia (PPKM) and Asian Institute of Chartered Bankers (AICB))

PKMC Module II Exam Content Outline

10%

Overview of Financial Markets

Financial market components, OTC vs. exchange-traded trading, transaction execution modes, and RENTAS settlement and depository systems.

15%

The Money Markets & BNM Operations

The flow of funds in the Malaysian economy, money market functions, monetary policy implementation, and tools (repos, direct borrowing, BNMN).

15%

Basic Financial Calculations

Sovereign bond accrued interest, yield-to-maturity, bond pricing, day-count conventions (Actual/365), and discount yield math.

10%

The Cash Market

Interbank cash market operations, daily KLIBOR benchmark polling and trimmed-mean calculation, and interest rate determinants.

20%

Money Market Instruments

Sovereign debt (MGS, GII, MTB), bank deposit notes (NIDs), Bankers' Acceptances (BA), Cagamas securities, and corporate bonds (PDS).

10%

Eligible Liabilities & Statutory Reserves

Eligible Liabilities (EL) base definition, Statutory Reserve Requirement (SRR) calculation, and LCR/NSFR liquidity risk frameworks.

Base Lending Rate & Reference Rates

Evolution of retail loan benchmarks including the traditional BLR, Base Rate (BR), and Standardised Base Rate (SBR) tied to the OPR.

Cost of Funds Computation

Lending rate pricing using historical vs. marginal cost of funds methods, and reserve-adjusted break-even rate computations.

Money Market Management & Strategies

Interest rate risk gapping and mismatch, yield curve shapes (normal, inverted, flat, humped), and interest rate swap hedging.

10%

Introduction to Islamic Money Market

Islamic Interbank Money Market (IIMM) operations, Commodity Murabahah (Tawarruq) financing, SBBAs, GII contracts, and BNM Islamic tools.

How to Pass the PKMC Module II Exam

What You Need to Know

Passing score: 75% — a candidate must answer at least 30 of the 40 MCQs correctly to pass.
Assessment: 40 multiple-choice questions (MCQs) and 3 compulsory written essay/calculation questions covering the money market, monetary operations, financial mathematics, cash and debt securities instruments, statutory reserve requirements, reference rate frameworks, cost of funds, yield curves, and Islamic money market operations.
Time limit: 120 minutes (2 hours).
Exam fee: Approximately RM800 per sitting, excluding mandatory structured seminar fees (which are approximately RM2,700).

Keys to Passing

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

PKMC Module II Study Tips from Top Performers

1Master the basic calculations. Expect multiple questions on simple interest, discount yield, yield-to-maturity, accrued interest, and reserve-adjusted cost of funds. Practice using your financial calculator daily.

2Memorize the day-count convention. The domestic Ringgit cash and debt securities market standardized on the Actual/365 day-count convention. Avoid using Actual/360 unless explicitly specified for foreign currency instruments.

3Understand Bank Negara Malaysia's operations. Be clear on the mechanics of repos (liquidity injection) vs. reverse repos (liquidity absorption), direct borrowing, and standing lending/deposit facilities.

4Distinguish between conventional and Islamic money market tools. For every conventional instrument (e.g. MGS, Repo, deposit), know its Islamic Shariah-compliant equivalent (e.g. GII, Sell and Buy Back Agreement, Commodity Murabahah/Tawarruq).

5Learn the regulatory reserve frameworks. Understand how to calculate Eligible Liabilities (EL) and the Statutory Reserve Requirement (SRR) balance, and study LCR liquid asset categories.

6Review yield curve shapes and ALM gapping. Know how interest rate changes affect positive and negative gap balance sheets, and how interest rate swaps are used to hedge repricing risk.

Frequently Asked Questions

What is the PKMC and who needs it?

The Pasaran Kewangan Malaysia Certificate (PKMC) is a mandatory professional qualification in Malaysia for individuals seeking to operate as treasury dealers, money market dealers, or money brokers in the Ringgit wholesale financial markets.

What is the structure of the real PKMC Module II exam?

The real exam consists of 40 multiple-choice questions (MCQs) and 3 compulsory written essay or calculation questions. It is a 2-hour (120 minutes) paper. This practice bank covers the MCQ portion with 100 comprehensive questions.

What is the passing mark for the PKMC Module II exam?

The passing mark is 75% for the examination. This is a relatively high passing threshold, reflecting the precision required of financial market professionals.

Are calculators allowed in the PKMC Module II exam?

Yes, candidates are permitted to use non-programmable financial calculators (such as the Texas Instruments BA II Plus or HP 12C) to perform yield, pricing, and interest computations.

How long do I have to complete all modules of the PKMC?

Candidates must pass all four modules of the PKMC (Module I: Regulatory Framework, Module II: Money Market, Module III: Foreign Exchange, Module IV: Risk Management/Derivatives) within two years of admission as an FMAM member.

Which domestic rating agencies rate Malaysian corporate debt?

Corporate Private Debt Securities (PDS) are rated by domestic rating agencies: RAM Rating Services Berhad (RAM) and Malaysian Rating Corporation Berhad (MARC).