HKSI Licensing Examination Paper 8 (Securities) Practice Test
Frequently asked questions
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A full bank of original HKSI Licensing Examination Paper 8 (Securities) practice questions across the official content areas, weighted like the real exam, with explanations. Free, no signup.
What is the HKSI Licensing Examination Paper 8 (Securities) exam like?+
About 40 questions, 60 minutes, and you need 70% to pass. Practice by topic here, then take the full timed mock exam to gauge readiness.
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No. Every question is 100% original, written from public primary sources with explanations. We never copy real exam questions or paid prep material.
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PrepPass practice is in English, 中文 and Español. The official exam is in English — switch the question language to English any time to rehearse the exact terminology you'll see on test day.
Sample practice questions
A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.
- 1. Overview of Securities Investments
The best-known benchmark index of the largest companies listed on the Stock Exchange of Hong Kong is:
- a.The S&P 500
- b.The Hang Seng Index
- c.The FTSE 100
- d.The Nikkei 225
Answer: b
Explanation: The Hang Seng Index (HSI) is the principal benchmark tracking the largest and most liquid companies listed on SEHK. The S&P 500, Nikkei 225 and FTSE 100 are the US, Japanese and UK benchmark indices.
- 2. Overview of Securities Investments
Which instrument would normally trade in the money market rather than the capital market?
- a.A 3-month certificate of deposit
- b.A 10-year government bond
- c.A 20-year corporate debenture
- d.An ordinary share
Answer: a
Explanation: The money market deals in short-term instruments (typically maturing within one year), such as certificates of deposit, commercial paper and Exchange Fund Bills. Long-dated bonds and equities are capital-market instruments.
- 3. Primary and Secondary Markets
In a Hong Kong IPO, the firm responsible for conducting due diligence and dealing with the Exchange on the listing application is the:
- a.Sponsor
- b.Share registrar
- c.External auditor only
- d.Custodian
Answer: a
Explanation: The sponsor, a licensed Type 6 (corporate finance) firm, manages the listing, conducts due diligence and liaises with the Exchange and the SFC. Registrars, custodians and auditors have separate, narrower roles in the listing process.
- 4. Primary and Secondary Markets
Trades in HK-listed shares are cleared and settled through:
- a.Physical delivery of paper certificates on the trade date
- b.The Investor Compensation Fund, which matches and settles every exchange trade on behalf of the two brokers
- c.CCASS, operated by Hong Kong Securities Clearing Company, on a T+2 basis
- d.The Market Misconduct Tribunal
Answer: c
Explanation: The Central Clearing and Settlement System (CCASS), run by HKSCC, clears and settles exchange trades on a T+2 (two-business-day) cycle, largely by electronic book entry rather than physical certificates.
- 5. Participants in the Markets
Which two bodies are the principal statutory regulators overseeing Hong Kong's securities markets and banking respectively?
- a.The Financial Secretary and the Stock Exchange
- b.The Market Misconduct Tribunal and the JFIU
- c.The SFC and the HKMA
- d.HKEX and the Companies Registry
Answer: c
Explanation: The Securities and Futures Commission (SFC) regulates the securities and futures markets, while the Hong Kong Monetary Authority (HKMA) regulates banks, including their registered-institution securities business. HKEX operates the market infrastructure rather than regulating it.
- 6. Types of Securities
A preference share typically differs from an ordinary share in that a preference share:
- a.Always carries full voting rights at company meetings, ranking equally with ordinary shares in every respect
- b.Usually pays a fixed dividend and ranks ahead of ordinary shares for dividends and on winding up
- c.Ranks behind ordinary shares for dividends
- d.Gives its holder an unlimited share of residual profits
Answer: b
Explanation: Preference shares usually carry a fixed dividend and rank ahead of ordinary shares for dividends and for capital on a winding up, but they generally have limited or no voting rights and no share in surplus profits.
- 7. Types of Securities
A Real Estate Investment Trust (REIT) listed on SEHK primarily:
- a.Holds income-producing real estate and distributes most of its rental income to unit holders
- b.Trades foreign currencies
- c.Provides mortgage insurance
- d.Lends money to property developers and construction firms at fixed rates of interest secured on the land
Answer: a
Explanation: A REIT is a listed collective investment scheme that invests in income-generating property and must distribute the bulk of its net income to unit holders, giving investors exposure to real-estate returns without owning property directly.
- 8. Types of Securities
Commercial paper is best described as:
- a.A short-term unsecured debt instrument issued by a company to raise working capital
- b.A long-dated government bond issued to finance public spending over a period of many years
- c.An equity security
- d.A type of exchange-traded fund
Answer: a
Explanation: Commercial paper is a short-term (typically up to one year) unsecured promissory note issued by companies at a discount to raise working capital. It is a money-market instrument, not equity or a fund.
- 9. Stock Market Administration
Which of the following is a government-imposed cost on a typical Hong Kong share transaction?
- a.The custodian's safekeeping fee
- b.The broker's commission
- c.The fund manager's performance fee
- d.Stamp duty on the transfer of shares
Answer: d
Explanation: Stamp duty is a government levy charged on transfers of Hong Kong stock. Brokerage commission, custody fees and management fees are charged by market participants; the SEHK and SFC also levy small trading and transaction fees.
- 10. Securities Analysis
The price-to-earnings (P/E) ratio, used in fundamental analysis, measures:
- a.A company's total outstanding debt divided by its shareholders' equity, showing its overall financial gearing and leverage
- b.The dividend paid per share
- c.A bond's yield to maturity
- d.The share price relative to earnings per share, indicating how much investors pay per unit of earnings
Answer: d
Explanation: The P/E ratio divides the share price by earnings per share, showing how much the market will pay for each unit of a company's earnings. It is a core valuation metric in fundamental analysis, distinct from gearing or dividend measures.