Certified Private Wealth Professional (CPWP) Module 1 Examination

Guidelines for Examination Preparation

Welcome to the "Guidelines for Examination Preparation". This section aims to assist candidates in preparing for the CPWP Module 1 Examination offered by the HKSI Institute. It explains the special features of multiple choice questions (MCQs) and provides some examination strategies and techniques that will be useful to candidates in their examination preparation. It is important for candidates to be aware that the CPWP Module 1 Examination is not an IQ test. A guess work approach, however intelligently applied, cannot be relied on by candidates. They require a rigorous approach to study.

Special Features of Multiple Choice Questions

Candidates often think that MCQ examinations are simply a matter of being able to recognise true statements. They often assume that MCQ examinations are easier than essay-type examinations, as the correct answer is already provided as one of the available choices and they may score marks with a lucky guess. However, MCQs in fact require careful selection from a mix of correct and incorrect statements. Candidates answering MCQs are expected to know the subject matter being tested as a result of their diligent preparation.

CPWP Module 1 Examination includes two types of MCQs - simple MCQ and complex MCQ which consist of two parts:

  • a stem (i.e. the text of the question), which asks a question, poses a problem, or presents an incomplete sentence;
  • a choice of 4 possible sets of answers.

In addition, each CPWP Module 1 Examination Paper includes mini case questions (2 for Paper 1 and 4 for Paper 2). Each mini case consists of a scenario and 5 simple and/or complex MCQs that require candidates to apply and integrate knowledge and skills from different areas of the private wealth management.

A 3-year bond with an annual coupon 3% yielding 5% per annum and a pay back at par value. The first coupon will be paid in exactly one year. Calculate the Macaulay duration of the bond.

A. 2.59

B. 2.76

C. 2.91

D. 3.00

 

In simple terms, the MCQs of the CPWP Module 1 Examination aim to test a range of abilities, including:

  • Recall of the information;
  • Understanding the information;
  • Solving problems using required skills or knowledge;
  • Comparing and discriminating between ideas.

It is therefore important to remember, understand and be able to apply the knowledge to practical situations.

Preparing for the Examination and Revision Strategies

Start early

MCQ examinations tend to focus on details, and detailed information cannot generally be retained effectively through short-term memory. However, it is not expected to test on those market and historical statistics/figures.

 

Plan your revision

Read every single topic in the study manuals and allow extra time for difficult topics. Each topic carries equal weight in the examination. DO NOT glance over topics you think you know already. DO NOT simply rely on the knowledge you have gained through whatever means alone as this may not always be technically correct. Make sure you know and understand the products, instruments, techniques, rules and regulations, etc. covered in the syllabuses.

 

Pay attention to fundamental terms, concepts and key defintions

Pay attention to fundamental terms, concepts and key definitions. For example, terms such as "structured product", "family office" and “correlation”, etc. Candidates are expected to know what they mean.

You are advised to use the Learning Outcomes for each topic of the study manuals as a guide to the way in which you study the materials. They indicate the expected key areas of knowledge which you should master. The revision questions and checklists included in each topic help to reinforce your understanding of the subject covered in the topic. Moreover, the sample questions and answers attached at the end of each topic help to enhance your understanding of the format and style of the actual examination questions. For candidates’ convenience, all the sample questions in the study manuals plus 2 sample mini cases are incorporated in the “Sample questions and Answers” section of the CPWP Revision Tools.

 

Understand and digest the materials

DO NOT just read and memorise the study manuals. Think about the issues and the practical application of them, where relevant. If possible, discuss the issues with other experienced practitioners.

It should be noted that there are variety of private wealth management products and practices with similar titles and yet different terms and conditions, available in the market. The study manuals may include some products and practices without the intention to cover an exhaustive list. However, examination questions would be set basing on the materials in the study manuals.

 

Formula sheet for calculation-type questions

As a module for technical, industry and product knowledge, it is inevitable to involve calculation-type questions in the examination. The purpose of this type of questions is to test the candidates’ capability on practical application of the knowledge, therefore, each candidate will be provided with a formula sheet (and a draft paper) during the examination. Notice that the sheet serves as an aid for the examination only, and it is not an exhaustive listing of formulas that may be applied to the examination.

Attempting MCQs

Time management

You have limited time to answer 60 questions for Paper 1 and 80 questions for Paper 2. On average, you have around two minutes per question.

 

Read the questions including all the choices carefully

Read the questions carefully, more than once, if necessary.

Is the question asking for:

  • the only correct answer? - e.g. Which ONE of the following statements is CORRECT?
  • two or more correct answers? - e.g. Which of the following statements are CORRECT?
  • the best answer? - e.g. Which ONE of the following is MOST LIKELY ......?
  • the incorrect alternatives? - e.g. Which of the following statements are INCORRECT?

Read all the choices before answering a question. DO NOT assume that because the first or second choice appears correct, it is not necessary to read the remaining options.

 

Revisit the question

If you are unsure of the answer to a question, leave it and return to it later. DO NOT waste time over questions which you find difficult at the start. First, complete the answers for questions you know well. Then, try those questions you could not do on the first attempt. Sometimes, the answer will occur to you simply because you are more relaxed after having answered other questions.

 

DO NOT make any assumputions

All MCQs have been set out randomly so DO NOT assume that one question follows on from the previous one. DO NOT make assumptions when answering. Answer the questions as they are stated.

 

Identify the distractors that look as if they are correct but are not

Questions are not designed to mislead candidates. Good distracters (i.e. incorrect choices in the list of options) often appear to be correct but in fact, they are wrong. Distractors are designed to discriminate between those who really know the correct answer, and those who do not.

 

Make educated guesses

Make sure you have answered all the questions and double-check your answers. Marks WILL NOT be deducted for questions answered incorrectly in the CPWP Module 1 Examination. However, avoid pure guessing, rather eliminate answers that are obviously wrong and then choose carefully from those that remain.

Factors Affecting Test Performance

Carelessness

Two of the most effective methods to combat carelessness are to re-read the questions before answering them and to check your answers before submitting them.

 

Failure to focus on questions

Some MCQs call for facts more than thought, but some require you to use factual information in a thinking process. Examination logic requires that you think thoroughly, concentrate upon the questions and answers, and search for memory cues to information that you have studied.

 

Cramming

Cramming means mastering a lot of new materials in a relatively short period of time. Cramming does NOT work well for passing an examination because materials learned within 24 hours are difficult for most of us to recall. A final review is a last effort to organise and brush up on previously studied materials, but is not suitable for remembering new information. Educational psychologists suggest that the most effective technique for long-term memory is to use a series of study periods over a predetermined schedule broken by regular rest intervals.

Qualification