FRE1 Mock Paper 2 — Industry, Regulation & Key PartiesStandard
Step two of the FRE1 ramp. Standard-difficulty questions on authorisation, FSCS limits and mortgage funding, with three linked case studies. 40 marks, 60 min.
Ready when you are
The timer starts when you press the button. You can still finish after it runs out — it is there to mimic exam pressure, not to lock you out.
Free preview: the first 5 of 40 questions, with a timer to match. Unlock the full paper
Answer options are shuffled on every attempt. Your progress is saved as you go, so a refresh won't lose it.
About FRE1 Mock Paper 2
This is mock paper 2 of 5 for FRE1, the Industry, Regulation & Key Parties unit of CeMAP. The 5 papers in this unit run easier → harder so you can build up to exam standard rather than being thrown in at the deep end. This one sits in the standard tier: it is pitched at roughly live-exam difficulty, with distractors that are all plausible until you read them properly.
Every question carries a written explanation, so a wrong answer tells you which rule you have misread instead of just costing you a mark. Questions are original, written against the 2025/26 five-unit CeMAP syllabus, and cover the material the way the examiner tests it — precise recall where recall is tested, and judgement where the paper wants judgement.
Format, timing and pass mark
FRE1 Mock Paper 2 follows the live FRE1 format: 25 standalone questions + 3 case studies × 5 linked questions, in 60 minutes — about 90 seconds a question. Pass mark 28/40 (70%), as in the real assessment. There is no negative marking, so answer everything. 3 case studies carry linked questions: read each scenario once, carefully, before answering any part of it.
What this paper tests
The 40 questions in FRE1 Mock Paper 2 break down across 10 topic areas:
- Authorisation & conduct6 questions
- CS1 — Authorisation5 questions
- CS2 — FSCS & deposit protection5 questions
- CS3 — Economy & funding5 questions
- Regulators & framework5 questions
- Consumer protection & redress4 questions
- Market & parties4 questions
- Economy & funding3 questions
- Financial crime2 questions
- Data protection1 question
Try two questions from FRE1 Mock Paper 2
These come from the free preview of this paper. Answer them, then reveal the explanation.
Regulators & framework
Which option correctly lists the FCA's three operational objectives?
- AEnsuring relevant markets function well; maintaining financial stability across the banking sector; setting monetary policy and the annual inflation target for the wider UK economy
- BReducing financial crime; supervising payment systems; managing the FSCS levy
- CSafety and soundness of firms; policyholder protection; effective resolution of failing banks
- DSecuring an appropriate degree of protection for consumers; protecting and enhancing the integrity of the UK financial system; promoting effective competition in the interests of consumers
Reveal the answer
D is correct. The three operational objectives are consumer protection, market integrity and competition. 'Ensuring relevant markets function well' is the single strategic objective, while safety and soundness and policyholder protection belong to the PRA — both classic mix-and-match traps.
Regulators & framework
The Monetary Policy Committee's core task is best described as:
- ASetting capital requirements for banks to protect financial stability
- BSetting Bank Rate with the aim of meeting the inflation target set for it by the Chancellor of the Exchequer
- CApproving the FCA's annual budget
- DChoosing its own inflation target each year and reporting the chosen figure to Parliament, which may amend it before it takes effect
Reveal the answer
B is correct. The MPC sets Bank Rate (and can use tools such as asset purchases) to meet the inflation target, which is set by the Chancellor — the Bank has operational independence over the instrument, not the target. Capital requirements are prudential territory, not monetary policy.
Scored under 70%? Revise these next
A near miss is almost always a calculation you cannot do under time pressure, a definition you half-know, or a rule you have never read in the examiner's words. Start with the topic areas above where you dropped marks, then:
- →Drill the calculations on the CeMAP formula sheet — LTV, income multiples, SDLT, APRC, ERCs and rental cover, each worked through.
- →Nail the terminology in the CeMAP glossary — a surprising share of wrong answers are a term you nearly knew.
- →Re-read the syllabus coverage on the FRE1 exam guide, then sit the next paper in the ramp.
The other FRE1 mock papers
5 timed mocks for this unit, running easier → harder. Sitting the whole ramp is what moves a borderline score to a comfortable pass.