The opening syllabus area sets the scene: who the players are, what the markets do, and how money moves through the economy. Questions are usually definitional — matching an institution to its function, or a market to what it actually does — so the marks are there for anyone who has the map straight.
What industry & markets covers in the R01 exam
- Primary and secondary markets, and what each is for
- The Bank of England, monetary policy and interest rates
- Banks, building societies, insurers, asset managers and platforms
- Wholesale versus retail markets, and clearing and settlement
- How financial services support saving, borrowing, risk transfer and investment
- The role of HM Treasury and the international context
Where candidates lose marks
Confusing the primary market (raising new capital) with the secondary market (trading existing securities).
Attributing monetary policy to the FCA or HM Treasury rather than the Bank of England.
Mixing up the PRA's prudential remit with the FCA's conduct remit at institution level.
Worked example questions
Real R01-style questions from our bank, with the correct answer and the reasoning. No sign-in needed.
Why are payment systems like Faster Payments important to households?
- AThey provide guarantees for corporate bond repayments
- BThey set long-term government borrowing rates
- CThey allow instant transfer of funds between accountsCorrect
- DThey regulate competition in retail markets
- EThey administer prudential supervision of banks
Why: Faster Payments enables consumers to move money between accounts instantly, improving convenience, liquidity, and access to funds.
What primary function does the primary market perform for issuers?
- ARaises new capital through securitiesCorrect
- BProvides daily liquidity for investors
- CClears trades between counterparties
- DSets interest rates and inflation
- EInsures deposits up to limits
Why: The primary market is where issuers, such as governments and companies, raise new capital by selling securities directly to investors. It funds investment, expansion, or refinancing activities.
How do investment funds contribute to household wealth accumulation?
- ABy guaranteeing state pensions
- BBy setting government fiscal deficits
- CBy issuing government gilts directly
- DBy offering access to diversified portfolios of assetsCorrect
- EBy administering welfare payments
Why: Investment funds allow households to invest in a wide range of assets, improving diversification and providing opportunities for long-term wealth growth.
Free, exam-style R01 questions across the syllabus, with an explanation for every answer and a per-topic breakdown at the end. The full 100-question mocks come with Pro.
Start free practiceIndustry & markets — questions answered
What is the difference between the primary and secondary market?
The primary market is where issuers raise new capital by selling securities for the first time. The secondary market is where those securities are then traded between investors, providing liquidity. R01 tests this distinction directly, so keep the two clearly separate.
Who is responsible for UK monetary policy?
The Bank of England sets monetary policy through its Monetary Policy Committee — not the FCA or HM Treasury. Its main tool is the base interest rate, which it uses to manage inflation and support the economy.
The other R01 syllabus areas
Independent study material, not affiliated with or endorsed by the Chartered Insurance Institute. Always check the official CII website for the current R01 syllabus, format and fees. The CII sets a nominal pass mark of 65% and adjusts it per sitting.