Definitive Guide to SP5 (Investment and Finance Principles)

You can use this study guide to move through Subject SP5 more easily. You can use it as a resource during your Subject SP5 studies because it provides all the material you’ll need before beginning to study for the 2023 tests in Subject SP5.

The manual is divided into two sections:

The information in Part 1 is exclusive to Subject SP5.

General information on the Specialist Principles (SP) disciplines is provided in Part 2.

The Subject SP5 course is divided into six sections. The portions are divided into chapters and cover relevant subjects. Each section concludes with an assignment that assesses the information covered in that section.

The parts and chapters are related to one another in the following table. How the chapters correspond to the days of the regular tutorials is shown in the final column. You can use this table to plan your progress throughout the study session.

Exam skills

Exam question skill levels In the Specialist Principles subjects, the approximate split of assessment across the three skill types is: 

• Knowledge – 25% 
• Application – 50% 
• Higher Order skills – 25%. 

Assessment

The Specialist Principles examinations are in the form of 3¼-hour* examinations. * The online exams provide an additional 5 minutes (i.e. 3 hours and 20 minutes in total) for students to download and print the question paper.

1 The economic, regulatory, and legislative framework for investment management (10%)
2 Specialist investment products (15%)
3 Valuing investments (10%)
4 Monitoring and managing investment risks (10%)
5 Investor characteristics, including behavioral finance and taxation (10%)
6 Appropriate investment strategies (15%)
7 Portfolio management and risk control (15%)
8 Analysing portfolio performance (15%)

In the SP subjects, the approximate split of assessment across these three skill types is 25% Knowledge, 50% Application, and 25% Higher Order Skills.

The aim of Investment and Finance Principles (SP5) is to develop a student’s ability to apply the main principles and techniques of actuarial management and control that are relevant to the management of investments.

It builds on material covered in earlier subjects to cover the key principles of evaluating investments, including the appropriate selection and effective risk management of a portfolio of investments that meet the needs of a particular investor.

• Exam Fees 

• Exam Dates 

Timetable –November 2023 Examination

Tuesday 21st November – Thursday 30th November 2023

Result Declaration Date: 30th January 2024, Tuesday

• Exam Dates 

• CB1 – Business Finance 
• CB2 – Business Economics
•  CM2 – Financial Engineering and Loss Reserving 
• CP1 – Actuarial Practice
•  SA7 – Investment and Finance Advanced

A syllabus objective’s use of a particular command verb does not mean that this is the sole way to inquire about the subject matter covered by that objective. Any of the approved command verbs, as listed in the document “Command verbs used in the Associate and Fellowship written examinations,” may be used by the Examiners to pose a question on any subject covered by the curriculum.

Questions may be set at any skill level: Knowledge (demonstration of a thorough knowledge and understanding of the topic), Application (demonstration of an ability to apply the underlying principles of the topic within a given context), and Higher Order (demonstration of an ability to perform deeper analysis and assessment of situations, including making judgments, accounting for different points of view, comparing and contrasting situations, and suggesting possible solutions).

In the SP subjects, the approximate split of assessment across these three skill types is 25% Knowledge, 50% Application, and 25% Higher-order skills. 

You will have taken numerous examinations and learned the study methods that work best for you. However, it is crucial to note that you cannot leave all of your revisions till the last minute due to the substantial amount of work involved in Subject SP5. student preparation has a higher likelihood of passing the test the first time if they study properly in advance.

We advise you to practice a lot of exam-style questions as you get ready for the test.