What is SCLE Module 12?
Module 12, Investment Management and Corporate Finance, is one of the Securities Commission Licensing Examinations run by the Securities Industry Development Corporation (SIDC). It is a Level 2 module, testing understanding and application rather than recall. You need it, together with Module 19 or its parts, to apply for a Capital Markets Services Representative's Licence to give investment advice or advise on corporate finance.
The exam format
| Run by | Securities Industry Development Corporation (SIDC) |
|---|---|
| Questions | 60 multiple-choice questions |
| Time | 90 minutes |
| Pass mark | 70% |
| Book | Closed book |
| Licences | Investment advice: Module 12 with Module 19 or 19A. Corporate finance advice: Module 12 with Module 19, or 19A and 19B |
What the syllabus covers
SIDC's Module 12 material covers the fundamentals of economics, financial statement analysis and performance measurement, risk and return, portfolio theory and portfolio management, financing decisions (debt, equity and dividend policy), derivatives (futures, swaps, interest rate options and structured products) and corporate restructuring including mergers and acquisitions. This pack has 106 original questions across those areas, with the working shown for every calculation.
How to prepare
- Get fast at the core formulas: CAPM, WACC, Gordon growth, NPV, bond yields and the Sharpe and Treynor ratios.
- Practise ratio analysis, including the DuPont breakdown of ROE.
- Learn the difference between forwards, futures, options and swaps, and how each is used to hedge.
- Know the basic capital market rules that appear in corporate finance questions, such as the 33% mandatory offer threshold.
- Practise one topic at a time here, then sit full 60-question mocks in 90 minutes.
Practice questions with answers
Tap a question to see the correct answer and explanation.
What does an inverted yield curve typically signal?
- Short-term rates are above long-term rates, often seen before a slowdown
- Long-term rates are much higher than short-term rates
- Inflation is certain to fall to zero
- Share prices must rise
Answer: A, Short-term rates are above long-term rates, often seen before a slowdown. An inverted curve, where short yields exceed long yields, has historically preceded economic slowdowns. Source: SIDC, SCLE Module 12 Investment Management and Corporate Finance syllabus topics (fundamentals of economics).
What does the current ratio measure?
- Efficiency: sales divided by total assets
- Liquidity: current assets / current liabilities
- Profitability: net profit divided by total sales revenue
- Leverage: debt divided by equity
Answer: B, Liquidity: current assets / current liabilities. Current ratio = current assets / current liabilities. It shows whether a company can meet short-term obligations. Source: SIDC, SCLE Module 12 Investment Management and Corporate Finance syllabus topics (financial statement analysis).
RM10,000 is invested at 6% a year, compounded annually. What is it worth after 2 years?
- RM11,236
- RM11,200
- RM12,000
- RM10,600
Answer: A, RM11,236. FV = 10,000 x 1.06² = 10,000 x 1.1236 = RM11,236. Source: SIDC, SCLE Module 12 Investment Management and Corporate Finance syllabus topics (time value of money).