Cash, Money-Market and Foreign-Exchange Instruments
Compare short-term instruments, liquidity management and FX market conventions.
How to prepare for the Investment Advice Diploma
Build UK regulation, integrity, investment, risk and tax first; then apply those foundations to the one technical option aligned with your role. The original multiple-choice practice tests knowledge, calculations and advisory judgement without reproducing recalled or secure CISI questions.
Core concepts
Concept 1
Identify cash and money-market instruments.
Exam cue: Name the instrument.
Concept 2
Apply FX quotation and settlement conventions.
Exam cue: Use the correct quote and term.
Concept 3
Compare yield, credit, liquidity and currency risks.
Exam cue: Identify issuer, counterparty and currency exposure.
Risk pitfalls and guardrails
Confusing discount yield with investment return.
Guardrail: Do not combine the five displayed units into one exam, infer permission from qualification, use stale annual figures or ignore the selected technical route.
Reading the base and terms currency backwards.
Guardrail: Do not combine the five displayed units into one exam, infer permission from qualification, use stale annual figures or ignore the selected technical route.
Treating deposits as free of counterparty risk.
Guardrail: Do not combine the five displayed units into one exam, infer permission from qualification, use stale annual figures or ignore the selected technical route.
Memory anchors
Money market
The market for short-term borrowing, lending and instruments.
Spot FX
An agreement to exchange currencies at the spot rate for the standard settlement date.
Bid-offer spread
The difference between the price at which a dealer buys and sells.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
What is the main purpose of the interbank money market?
A certificate of deposit differs from an ordinary call deposit because it is typically what?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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