SIDC Module 7 Structured products question: participation in an index's rise

SIDC Module 7Structured products

A note pays 100% participation in an index's rise, capped at 15%, with full capital protection. The index rises 25%. What does the investor receive per RM100?

A RM100
B RM115
C RM125
D RM140

Show the answer and explanation

Answer: B. RM115

Participation is capped: the investor receives the index rise up to the 15% cap, so RM100 + RM15 = RM115. RM125 ignores the cap. RM100 would apply only if the index had fallen or been flat. RM140 adds the cap to the index rise. Source: SIDC Module 7 Study Outline (Jul-Dec 2026) Topic 8 Structured Products; J. C. Hull, Options, Futures, and Other Derivatives (as at October 2026).

Common mistake

Forgetting the cap.

Practise more Module 7 Structured products questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: Structured products SIDC Module 7 practice questions & mock exams

Related SIDC Module 7 questions

A three-year capital-protected note uses a zero-coupon component yielding 3.5% a year (annual compounding). Ignoring fees, how much of each RM100 is available to buy the option component?A capital-protected note pays 100% of capital at maturity plus 70% of any rise in an index (participation rate 70%). The index rises 20% over the term. What is the investor's total return?A note with full capital protection at maturity pays 100% participation in an index's rise. The index falls 18% over the term. The investor holds to maturity and the issuer is solvent. What does the investor receive per RM100?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public SIDC Module 7 syllabus. Unofficial, not endorsed by SIDC or the SC. Verify figures and rules against current guidance before relying on them.