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100+ Free CME-5A Practice Questions

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Key Facts: CME-5A Exam

50 questions

CME-5A is a 50-question multiple-choice exam

CISI - Corporate Finance Technical Foundations

1 hour

Time allowed for the CME-5A exam

CISI - Corporate Finance Technical Foundations

70%

Pass mark for CME-5A; graded Fail, Pass or Pass with merit

CISI - Corporate Finance Technical Foundations

Up to 10%

Additional unscored trial questions may appear on the paper

CISI - Corporate Finance Technical Foundations

5 elements

Quantitative analysis, capital structure, valuations, transactions and documentation

Saudi CMA / CISI CME-5A syllabus

SAR 900

CMA first-time registration consideration for the CME-5A component

Saudi CMA Qualification Examinations Guideline

About 80 hours

Minimum study time CISI recommends for the qualification

CISI - Corporate Finance Technical Foundations

CME-5A + CME-5B

Both exams are required to register as a corporate finance professional

Saudi CMA - Capital Market Qualification Examinations

CME-5A (Corporate Finance Technical Foundations) is the technical exam required, with CME-5B, to register as a corporate finance professional in the Saudi capital market. It is delivered by CISI for the Saudi CMA and the Financial Academy. The exam has 50 multiple-choice questions in 1 hour with a 70% pass mark, and may add up to 10% unscored trial questions. The syllabus has five elements: quantitative analysis (about 30%), capital structure (about 22%), business valuations (about 16%), corporate transactions (about 22%) and documentation (about 10%). CMA first-time registration is SAR 900; CISI booking fees apply separately. This 100-question bank gives original practice across all five elements with full explanations.

Sample CME-5A Practice Questions

Try these sample questions to test your CME-5A exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1A company has a current ratio of 0.8. What does this most directly indicate?
A.Its current liabilities exceed its current assets
B.It is highly profitable
C.It has no long-term debt
D.Its inventory turns over quickly
Explanation: The current ratio is current assets divided by current liabilities. A ratio below 1.0 means current liabilities exceed current assets, which can signal short-term liquidity pressure.
2The present value of SAR 1,000 receivable in one year, discounted at 10%, is closest to:
A.SAR 900
B.SAR 909
C.SAR 1,000
D.SAR 1,100
Explanation: Present value equals future value divided by (1 + r). Here PV = 1,000 / 1.10 = SAR 909.1, so about SAR 909.
3Net present value (NPV) of a project is best defined as:
A.The sum of all undiscounted cash flows
B.The present value of cash inflows minus the present value of cash outflows
C.The internal rate of return of the project
D.The payback period in years
Explanation: NPV is the present value of all expected cash inflows less the present value of all cash outflows, discounted at the required rate of return. A positive NPV adds value.
4Under standard investment-appraisal rules, a project should be accepted on a stand-alone basis when its:
A.NPV is negative
B.IRR is below the cost of capital
C.NPV is positive
D.Payback period is longer than the project life
Explanation: A positive NPV means the project earns more than the required return and therefore adds value, so it should be accepted. This is the core decision rule in capital budgeting.
5The internal rate of return (IRR) is the discount rate at which a project's:
A.NPV equals zero
B.Payback equals one year
C.Profit is maximised
D.Revenue equals its costs
Explanation: The IRR is defined as the discount rate that makes the net present value of a project equal to zero. It is compared with the cost of capital to decide acceptance.
6A company reports net profit of SAR 20 million on revenue of SAR 200 million. Its net profit margin is:
A.2%
B.10%
C.20%
D.40%
Explanation: Net profit margin equals net profit divided by revenue: 20 / 200 = 0.10, or 10%. It shows how much of each riyal of sales becomes profit.
7Return on equity (ROE) is calculated as:
A.Net profit divided by total assets
B.Net profit divided by shareholders' equity
C.Operating profit divided by revenue
D.Gross profit divided by sales
Explanation: ROE measures the return earned for shareholders and equals net profit attributable to shareholders divided by shareholders' equity. It captures how effectively equity capital is used.
8A firm's interest cover is calculated as operating profit (EBIT) divided by:
A.Total debt
B.Interest expense
C.Net profit
D.Revenue
Explanation: Interest cover (times interest earned) equals EBIT divided by interest expense and shows how many times profit can pay the interest bill. A higher figure indicates lower risk of default.
9If SAR 500 is invested for two years at 8% compounded annually, the future value is closest to:
A.SAR 540
B.SAR 580
C.SAR 583
D.SAR 600
Explanation: Future value = 500 x (1.08)^2 = 500 x 1.1664 = SAR 583.2. Compounding applies interest to both principal and prior interest.
10Which financial statement reports a company's assets, liabilities and equity at a single point in time?
A.Income statement
B.Statement of cash flows
C.Statement of financial position
D.Statement of changes in equity
Explanation: The statement of financial position (balance sheet) shows assets, liabilities and equity at a specific date. It is a snapshot rather than a flow over a period.

About the CME-5A Exam

The Corporate Finance Technical Foundations (CME-5A) is the technical component required, alongside the regulatory exam CME-5B, for registration as a corporate finance professional in the Saudi capital market. It is provided by the Chartered Institute for Securities & Investment (CISI) in cooperation with the Financial Academy on behalf of the Capital Market Authority. The syllabus covers quantitative analysis for corporate finance (financial statement and ratio analysis, time value of money, NPV and IRR), capital structure and the cost of capital, business valuations (DCF, multiples and asset-based methods), corporate transactions (IPOs, rights issues, debt and sukuk issuance, mergers and acquisitions, buyouts and private equity) and corporate finance documentation. The exam is a one-hour, 50-question computer-based multiple-choice test with a 70% pass mark.

Assessment

50 multiple-choice questions across five syllabus elements: Quantitative Analysis for Corporate Finance, Capital Structure, Business Valuations, Corporate Transactions and Corporate Finance Documentation. The paper may include up to 10% additional trial questions that do not count toward the score.

Time Limit

1 hour (60 minutes).

Passing Score

70% pass mark. CISI reports the outcome as Fail, Pass, or Pass with merit.

Exam Fee

CMA registration consideration is SAR 900 for first-time registration as a corporate finance professional (CME-5A component); CISI exam booking and any re-sit fees are charged separately by the provider. (Saudi Capital Market Authority (CMA); exam delivered by the Chartered Institute for Securities & Investment (CISI) with the Financial Academy.)

CME-5A Exam Content Outline

30%

Quantitative Analysis for Corporate Finance

Financial statement analysis, profitability, liquidity, efficiency and gearing ratios, the time value of money, discounting and compounding, present and future value, NPV, IRR and payback, and interpreting financial data for corporate decisions.

22%

Capital Structure

Sources of finance, debt versus equity, the cost of equity (including CAPM), the cost of debt, the weighted average cost of capital (WACC), gearing and leverage, and the trade-offs between financing options.

16%

Business Valuations

Discounted cash flow valuation, dividend discount and dividend growth models, trading and transaction multiples (P/E, EV/EBITDA), enterprise value versus equity value, terminal value, and asset-based, replacement-cost and break-up valuations.

22%

Corporate Transactions

IPOs and listings, rights issues, placings and open offers, debt and sukuk/bond issuance, mergers and acquisitions, takeover thresholds and mandatory offers, MBOs, MBIs and leveraged buyouts, and private equity, venture capital and sovereign wealth funds.

10%

Corporate Finance Documentation

Prospectuses and offering documents, term sheets, mandate and engagement letters, due-diligence and disclosure materials, and how documentation supports regulatory compliance and corporate governance.

How to Pass the CME-5A Exam

What You Need to Know

  • Passing score: 70% pass mark. CISI reports the outcome as Fail, Pass, or Pass with merit.
  • Assessment: 50 multiple-choice questions across five syllabus elements: Quantitative Analysis for Corporate Finance, Capital Structure, Business Valuations, Corporate Transactions and Corporate Finance Documentation. The paper may include up to 10% additional trial questions that do not count toward the score.
  • Time limit: 1 hour (60 minutes).
  • Exam fee: CMA registration consideration is SAR 900 for first-time registration as a corporate finance professional (CME-5A component); CISI exam booking and any re-sit fees are charged separately by the provider.

Keys to Passing

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

CME-5A Study Tips from Top Performers

1Learn the standard formulas cold - present value, NPV, IRR logic, WACC and the dividend growth model - because the quantitative element carries the largest weight at about 30%.
2Practise reading a set of financial statements quickly and computing the key profitability, liquidity, efficiency and gearing ratios, since ratio interpretation is tested heavily.
3Be precise about enterprise value versus equity value: know how to bridge between them by adding net debt, and which multiples (EV/EBITDA versus P/E) apply to each.
4Memorise transaction mechanics: how a rights issue is priced and its theoretical ex-rights price, the difference between a placing and an open offer, and the structure of an MBO or LBO.
5Know the takeover concepts, including the 30% threshold that triggers a mandatory offer, and connect each transaction type to the documents it requires.
6Use the CISI Corporate Finance Technical Foundations workbook and sample papers, and time yourself at roughly one minute per question to match the 50-question, one-hour format.

Frequently Asked Questions

What is the Saudi CMA CME-5A exam?

CME-5A, Corporate Finance Technical Foundations, is the technical exam required by the Saudi Capital Market Authority for registration as a corporate finance professional. It is delivered by CISI with the Financial Academy and covers core corporate finance concepts.

How many questions are on CME-5A and how long is the exam?

The exam has 50 multiple-choice questions and lasts 1 hour. The paper may include up to 10% additional trial questions that do not count toward your score.

What is the pass mark for CME-5A?

The pass mark is 70%. CISI reports the outcome as Fail, Pass, or Pass with merit depending on the score achieved.

Do I also need CME-5B to register as a corporate finance professional?

Yes. The Saudi CMA requires both CME-5A (the technical exam) and CME-5B (the Saudi capital market rules and regulations exam for corporate finance) to be registered as a corporate finance professional.

How much does CME-5A cost?

The CMA registration consideration is SAR 900 for first-time registration covering the CME-5A component. CISI exam booking fees and any re-sit fees are charged separately by the provider, so confirm current pricing before you book.

Are these official CISI or CMA practice questions?

No. These are original OpenExamPrep practice questions modelled on the published CME-5A syllabus topics. They are not copied from the official CISI workbook, sample papers or CMA materials.