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R02 – Investment Principles and Risk

£45.83 + VAT

Ever though there must be an easier way to prepare for your CII R02 exam?

Our R02 audio study guide has over 4 hours of material and includes the key content from the CII R02 study text. It is suitable for exams between 1 September 2023 and 31 August 2024. It can be downloaded almost instantly and then played through your computer or sync’d with your mobile device. This enables you to study when conventional methods aren’t available, for example when commuting.

Based on a survey of people who purchased our MP3 material, 80.95% passed the exam they bought material for.

Sample of our R0 audio material – click play to listen

What you need to know about R02

R02 is one of the six modules that go to make up the CII's Regulated Diploma in Financial Services.

Here is some of the information you will need to know in order to pass first time.

What does R02 examine?

R02 tests your knowledge of investment principles and risk. There are nine elements to the syllabus but three areas dominate the questions:

  1. The characteristics and risks of the main asset classes - cash, fixed interest, equities and alternatives
  2. The characteristics, risks and taxation of the main investment products, e.g. unit trusts/OEICs, life assurance, ISAs
  3. Analysing the performance of investments, e.g calculating returns, alpha and beta, and performance attribution - asset allocation, market timing, risk etc

For full details of the syllabus, click here

How difficult is R02?

The pass rates for R02 are remarkably consistent over the years.

2022 2021 2020 2019 2018 2017
70% 65% 65% 60% 59.99% 62.79%

Source: CII website

What's the format of the R02 exam and the pass mark?

R02 is based in 100 multiple choice questions. The exam is 2 hours long and you will need to score 65% or more to pass the exam.

The R02 exam uses two types of multiple choice questions; standard format and multiple response format. With standard format questions, you will be given four options and only one will be correct. In R02, 72 of the 100 questions will be of this type.

The second style of question is the multiple response questions which are harder to answer.  To start off with, there will be more than four options - so there is less chance of taking a guess and getting the right answer. Secondly, if there are two correct answers, you will need to get both of these correct in order to get a mark. In R02, there will be 28 multiple-response questions.

With either format, a wrong answer will fail to get a mark. In other words, marks aren't deducted for incorrect answers - you just fail to get a mark. So if you don't know the answer, you might as well guess. You have nothing to lose!

What do I need to do to pass R02 first time?

You will need decent all-round knowledge and you will have practiced answering R02 style questions.

The CII recommend 60 hours of study. If you are new to the profession, you will probably need all of this time and more. You will also probably have to use a range of study options. These include:

  •  Our MP3 audio material. This provides over 4 hours of content that helps you to study while driving, commuting, working out....
  •  CII R02 study text. There are no short cuts. Most people will need to put in some hard yards using this as the primary source of learning.
  • CII Revisionmate. If you purchase the CII study text, you automatically get access to their on-line bank of test questions. This provides an invaluable and 'free' way of both learning (through making mistakes) and testing the knowledge of what you have learned.

To read about 5 popular myths of R02, click here

To access free R02 practice questions, click here

What people say about us:

'Thanks. Used your R02 audio material. Very good. One more exam to get to Fellow.'

Mark Banyard, Banyard Independent Advice Services, Pontypool

R02 Exam - Investment Principles and Risk. Size: 12 modules, over 4 hours of material
Download time: approx 2 minutes over high speed broadband

Please note: After purchase you will receive an email that includes the download link within minutes. If you don't receive this in your inbox, please check your spam folder.


Introduction (2 minutes)

Module 1 (11 minutes)
R02: the exam and preparing for it CII Regulated Diploma exam structure | The R02 exam | multiple-choice questions | exam preparation | 7 golden rules for the exam

Module 2 (25 minutes)
Asset classes - part 1 Cash: risks, types of products, e.g. LISA and ISAs | Fixed interest securities: bond markets, how bonds are issued | measuring bond performance | market risk | volatility | yield curves

Module 3 (26 minutes)
Asset classes - part 2 Equities: types of share and dealing | private equity | measuring equity performance, e.g. P/E ratio | indicies | Property: residential property, commercial property and property investment vehicles | Alternative investments: works of art, commodities, e.g. gold, and cryptocurrencies

Module 4 (18 minutes)
The economic environment and its impact on asset classes Economic trends | world globalisation | economic cycles | fiscal and monetary policy | money supply | inflation | interest rates | balance of payments | the effects on investments

Module 5 (23 minutes)
The main investment theories Managing risk: diversification and hedging | Systematic and non-systematic risk | efficient frontier | the main investment theories: capital asset pricing model, APT, EMH, behavioural | risk adjusted returns (sharpe ratio, alpha, information ratio) | the time value of money | compound interest

Module 6 (13 minutes)
Risk and investment performance Risk and return objectives | types of risk | diversification | gearing

Module 7 (29 minutes)
Indirect investment products - Part 1 Direct v indirect investments | OEICS v unit trusts, e.g. structure, charges, diversification, taxation | reporting and non-reporting  off-shore funds) | investment trusts, e.g.  structure, split caps, warrants, gearing

Module 8 (36 minutes)
Indirect investment products - Part 2 Life assurance-based investments | ETFs | property-based investments (property company shares, REITs, insurance company property funds, and property unit trusts or investment trusts) | EIS and SEIS | VCTs | futures and options | hedge funds | absolute return funds| structured products

Module 9 (21 minutes)

The investment advice process The advice process | risk and capacity for loss| know your customer requirements | vulnerable customers | ESG and socially responsible investments

Module 10 (17 minutes)
Principles of investment planning Asset allocation and risk | portfolio optimisation | stochastic modelling | strategic and tactical asset allocation | passive investments | investment styles, e.g. value, momentum, contrarian | tax wrappers

Module 11 (16 minutes)
The performance of investments Measuring portfolio performance, e.g. money weighted rate of return, indices, other managers | discretionary management | selecting fund managers | portfolio reviews and re-balancing

Module 12 (20 minutes)

Crammer module This consists of the summaries of the previous modules. It provides a quick recap of the key points from the full R02 programme.