CSC Volume One Chapters 1-3

CSC Volume One Chapters 1-3

• Trades and other transactions are cleared and settled through CDS Clearing and Depository Services.
• Discount broker is another term for self-directed broker.
• Front office performs all staff functions pertaining directly to portfolio management activities.
• Front office includes all of the following staff functions except trade settlement.
• Voting shares of large Schedule 1 banks must be widely held.
• Control of any single shareholder or group is restricted to no more than 20%.
• Deposits that Schedule II Banks hold are eligible for deposit insurance provided by CDIC.
• Underwriting is the most important aspect of the insurance business in Canada.
• Portfolios being built primarily with mutual funds is not true of robo-advisor services.
• Robo-advisor service portfolios are regularly balanced. -Robo-advisor service financial planning may be offered.
• Robo-advisor service portfolios are created using algorithms based on modern portfolio theory.
• Blockchain is the decentralized public transaction ledger on which all Bitcoin transactions are created.
• Direct investment occurs when savers directly buy securities issued by government and corporations.
• Indirect investment occurs when the saver buys the securities issued by government and corporations, which in turn use the funds for direct investment.
• The TSX Venture Exchange trades junior securities, income trusts, and exchange-traded funds.
• Trades in unlisted securities and unquoted equity securities in Ontario are reported through the Canadian Unlisted Board.
• CanDeal was established to facilitate trading in bonds.
• The Canadian Securities Administrators (CSA) has a mission to develop a national regulatory system that fosters fair, efficient, and vibrant capital markets.
• IIROC is least likely to perform the function registration in its role as regulator.
• Xu had $1,250,000 in an Investment Account and $700,000 in her RRSP account, she would be covered for $1,000,000 in her Investment Account and $700,000 in her RRSP account according to CIPF guidelines.
• CDIC insures eligible deposits up to $100,000 per deposit in each member institution.
• The Canadian securities industry follows a principles-based regulatory model.
• The general principle underlying Canadian Securities legislation is full, true, and plain disclosure of all pertinent facts.
• Compliance with gatekeeper obligations begins with the Know Your Client (KYC) rule.
• The relationship disclosure document that IIROC dealer members must provide clients is least likely to include information about the policies and procedures used by the firm to hire investment managers.
• Conflicts of interest is not addressed by denying the conflict.
• CRM guidelines require that the suitability of an investment decision be conducted with all of the following trigger events except when a trade is accepted.
• The claim limit for arbitration is $500,000.
• Front running is whereby a registrant trades ahead of a known client.
• According to the National Do Not Call List (DNCL), telemarketers and clients of telemarketers may not call any number that has been registered on the DNCL for more than 31 days.

CSC Volume One Chapters 1-3 Test #2

• The three categories of investment dealers that make up the Canadian Securities Industry are retail, institutional, and integrated.
• Smaller retail or institutional investment dealers are known as boutiques.
• The Middle Office performs functions critical to the efficient operation of the firm, except marketing.
• With most secondary trading of debt securities, the investment dealer acts as principal.
• To remain a Schedule I Bank, voting shares must be widely held, restricting control to any one shareholder or group to no more than 20%.
• Of Schedule III banks, they are least likely provincially regulated.
• Banks that own insurance companies can sell all types of insurance through their branch network.
• The most important distinction between self-directed brokerage and robo-advisors is that robo-advisors provide advice.
• Mobile, scarce, and important are three important characteristics of capital.
• Pools of capital gathered from investors to buy securities according to a specific investment mandate are known as managed funds.
• Markets are most likely characterized as auction and dealer markets.
• The bid-ask at 9:31 with 500 shares at $10.12, 400 shares at $10.10, 700 shares at $10.07 for buy orders and 400 shares at $10.12, 500 shares at $10.13, 300 shares at $10.15 for sell orders would most likely be $10.12 - $10.13.
• The Montreal Exchange trades all financial and equity futures and options listed in Canada.
• Under-the-counter markets are another term for dealer markets.
• It offering both institutional and retail investors access to Government securities and money market instruments is not true about CanDeal.
• CanPX is a joint venture between several Canadian investment dealers and inter-dealer firms, and combines digital feeds from participating dealers.
• OSFI regulates banks, insurance companies, as well as trust and loan companies.
• The function of CIPF is to safeguard investors against the insolvency of member firms.
• Fairness, Economic growth, and Social objectives are three of the four primary objectives in imposing regulation.
• Basic methods the securities acts protect the investing public except analysis of publicly traded securities.
• If Barbara Tan is a registered IA with Quint Securities and has just moved into a new house, both Tan and Securities should notify the applicable SROs under the National Registration Database (NRD).
• Clients who lose in arbitration may then sue the firm, is not true with respect to arbitration in the securities industry.
• The process is binding for both the investor and financial services provider, is least likely to be true about the Ombudsman for Banking Services and Investments?
• All of the following are examples of unethical practices except entering, or attempting to enter, into any arrangement to sell and repurchase a security in an effort to manipulate the market.
• CRTC is an organization that established rules that telemarketers and the organizations that hire them must follow.

CSC Volume One Chapters 4 & 5 Test #1

• Microeconomics would be least likely to examine the relationship between tuition costs and the decision to attend university versus college.
• The value of all goods and services produced in a country in a year is known as Gross Domestic Product.
• If productivity growth exceeds increases in the unit cost of production, there will be a cycle of demand-pull inflation is not likely.
• The phase described by "Inflation is stable... Corporate profits are rising and new business start-ups outnumber bankruptcies”... describes expansion of the business cycle.
• Housing starts and manufacturers' new orders are examples of leading indicators.
• All of the following are considered lagging indicators except personal income.
• The official Statistics Canada definition of a recession is two consecutive quarters of declining real GDP.
• Participation rate and unemployment rate are the two key indicators that describe the labour market.
• Frictional unemployment should be understood as a normal part of a healthy economy, is true about the four general types of unemployment.
• The natural unemployment rate is often viewed as that level of unemployment that is consistent with stable inflation.
• Higher inflation results in higher real interest rates, is not true with respect to factors that affect interest rates.
• Higher interest rates affect the economy in all the following ways with the exception of mortgage payments will decline.
• The CPI stands for Consumer Price Index which measures cost of living in Canada.
• If the CPI stood at 110 at the end of 2021 and 115 at the end of 2022, inflation closest to 4.6%.
• Inflation that occurs due to shocks from the supply side of the economy is known as cost-push inflation. _ The Phillips curve says lowering inflation means increasing unemployment.
• The most important component of the current account is merchandise trade.
• If Canada is running a deficit in its current account, this means the nation is running a surplus in its capital account.
• If the Canadian and US dollars are trading at par and inflation in the United States is expected to be higher than in Canada over the next ten years, interest rates will be higher in the US and its currency will depreciate.
• In a floating exchange rate system, the value of a currency is determined by market forces.
• All of the following are major functions of the Bank of Canada with the exception of to prepare balanced federal budgets.
• The overnight rate operates within a band of 50 basis points.
• Overnight repos are used by the Bank of Canada to narrow the operating band.
• A redeposit means that the Bank of Canada is redepositing money with the Chartered Banks which puts upward pressure on interest rates.
• If interest rates are already very low, lowering them even more may not have any impact, is least likely to be understood as a disadvantage associated with monetary policy.

CSC Volume One Chapters 4 & 5 Test #2

• Market equilibrium is an important concept in the stock market because this establishes the price at which a stock will be exchanged at any point in time.
• Nominal GDP will always exceed Real GDP unless there is deflation in the system.
• Increases in population is least likely to have an impact on a country's GDP growth.
• If productivity growth exceeds the increases in the cost of production, firms enjoy higher profit margins in the short run is not true.
• "Labour and product shortages cause wage increases... interest rates rise and bond prices fall... stock prices fall and stock market activity declines...” describes peak phase of the business cycle.
• Housing starts and stock prices are two important leading indicators.
• Statistics Canada divides the working age population into three groups: Employed, Unemployed, Retired.
• If unemployment increases by the same amount that employment decreases the participation rate will be unaffected.
• Cyclical unemployment tends to rise during the expansion phase of the business cycle and structural unemployment typically leads to shorter periods of unemployment than frictional unemployment, are not true with respect to unemployment.
• Interest rates are currently being raised in the United States of America, the Canadian economy should be impacted in all of the following ways except the Canadian dollar should be expected to appreciate.
• A government that has issued a great deal of long-term, fixed-rate debt might benefit from a high inflation environment.
• The price of oil has increased significantly in the past twelve months, this could be inflationary or just a one-time jump in price, reflecting the increased scarcity of oil, according to an economist.
• Europe has a stronger labour movement than does North America, policy makers in that part of the world must be more conscious of cost-push inflation.
• The opposite of inflation is deflation.
• Currently inflation is 6%, which is 3% higher than the government would like it to be, the government would have to accept higher unemployment, according to the Phillips Curve.
• When Canada has a surplus in its Current Account, Canadians are investing more abroad than foreigners are investing in Canada.
• If the Canadian dollar appreciates in value, this is good for Canadian consumers and bad for Canadian exporters.
• Debts give government the incentive to see inflation grow, is least likely to account for why countries with large public-sector debts and deficits are less attractive to foreign investors.
• When the government is spending more than it is bringing in in tax revenue, it is running a deficit and the national debt increases.
• Government expenditure on goods and services: $40 million, Government transfer payments: $10 million, Government revenue: $35 million, based on these entries, the national debt has fallen by $15m.
• Increasing fluctuations in the general level of production, is not one of the main areas of responsibility for the Bank of Canada.
• The maximum rate at which the Bank of Canada will lend money to the chartered banks and other members of the Canadian Payments Association, the Bank Rate.
• Overnight reverse repos are used by the Bank of Canada to relieve undesired upward pressure on interest rates.
• Moving funds owned by the Bank of Canada in and out of the chartered banks, known as Drawdowns and redeposits.
• In the United States, the Federal Reserve Board is raising interest rates, the American government should spend less on the military and Medicare in order for Fiscal Policy to be consistent with this action.

CSC VOLUME ONE: Chapters 6 – 7, Test #1

• The details of a bond issue are outlined in its prospectus.
• The income from a strip bond is considered interest income.
• A strip bond is sold at a discount and matures at par, but it does not make regular interest payments.
• Government of Canada bonds only, which of the following government-issued bonds are usually callable?
• A 10-year convertible bond, of the following bonds would most likely provide the investor with the highest yield.
• Currently, there is a 5% convertible debenture that is trading at 95, each $1,000 face value is convertible into 20 common shares and since the convertible bonds were issued, interest rates have increased sharply, then the price of the common shares is closest to $45.00.
• They pay interest at maturity, is not true of treasury bills.
• A real return bond issued by the Government of Canada uniquely protects the investor against the risk of inflation.
• The Province of Ontario issues a provincial bond with a ten-year maturity and a guaranteed bond, also with a ten-year maturity, the guaranteed bond has a lower yield than the other bond.
• A railway company considering issuing equipment trust certificates to borrow from the capital markets.
• Both principal and interest payments are guaranteed, not least likely to be true of GICs.
• To buy $100,000 face of PQR Int'l 6.00 1 July/10 101.40 101.60 5.63% bond would cost $101,600 plus accrued interest.
• Since this security was issued, interest rates have increased slightly, none of the above provides a reasonable explanation.
• A bond's present value is found by adding the present value of the bond's coupon payments and the present value of the bond's principal to be received at maturity.
• The present value of the second coupon of a 5% semi-annual pay bond trading at 92, assuming a discount rate of 7%? $23.34 is based on $1,000 face value. _ If an 8% annual pay bond with face value of $100,000 is currently trading at 92 and it has three years to maturity, then an investor with a 10% discount rate purchase this security yes, because its current market price of $92,000 is less than its issue price of $100,000.
• A T-Bill with 80 days to maturity is priced at 99.25, its effective yield is 3.45%.
• At four years to maturity a semi-annual bond with a 5% coupon is currently trading at 94, its current yield is 5.32%.
• An investor seeingthat a one-year GIC paying 2%, is refers to its nominal return.
• The graph depicting the term structure of interest rates is known as the yield curve.
• According to Expectations Theory, if the yield curve is upward-sloping, the market expects interest rates to be higher in the future. 5-year will be one having 10 coupons, is a GOC bond least volatile when its other coupon is also 5%.
• Duration measures interest rate risk.
• An investor held a $250,000 face value/5% Government of Canada semi-annual pay/bond that matures October 15th, 2030, trades at 98, the buyer of the bond owes the seller accrued interest of $2,397.26 when the trade settles on June 24th.
• Bond indexes are least likely to be used by the Bank of Canada to help conduct monetary policy.

CSC Volume One Chapters 6 – 7, Test #2

• Companies are legally required to make interest payments on bonds and debentures; they are not legally obligated to make dividend payments on preferred shares, what increases the leverage potential for bonds and debentures, compared to preferred shares.
• If BCE issued a 20-year bond and it has had 13 years of maturity, it could be considered either as a medium-term or long-term bond.
• If the choice of buying a strip bond in trading account or RRSP account, buy it in the RRSP account because cash is not received until the strip bond matures, but the client is responsible for making annual cash payments on the interest income from it.
• The opposite bonds for extendible bonds are retractable bonds.
• The purpose of the purchase fund provision is that it acts as a price support if the price of the bonds falls at or below a stipulated price.
• A 10-year convertible debenture would most likely provide an investor the highest return.
• If XYZ Company issued a 10-year convertible bond, each $1,000 face value is convertible into 50 common shares, the bond had the forced conversion featured attached to it, that feature would most likely be utilized if the price of the common shares were above $20 per share.
• Debt test is not a common protective provisions founds in Canadian corporate bonds.
• All Government of Canada bonds are callable, is not true with respect to the federal government and the Government of Canada issues?
• Treasury bills are taxed as interest income.
• A real return annual-pay bond carrying a 3% coupon was priced at 100 at issue date, the investor would receive $4,000 in interest and the bond would be worth $101,000, if inflation is 1% over the first year.
• Serial debentures or instalment debentures are typically is sued by corporations.
• A holding company is most likely to issue subordinated debentures in order to raise investment capital.
• The Bank of Nova Scotia contracts with a US underwriter to sell a new issue of bonds, denominated in US currency in the US market, this is an example of foreign bond.
• A risk-averse investor wanting the security associated with GICs, you would recommend index-linked GICs if interest rates extremely low.
• TSX Bond Rating Service is not one of the independent rating services for bonds in Canada. -An insurance company that has been fifty years in business is most likely to receive a "Aaa" rating of the following corporate bonds would be.
• The lower the present value of the bond's income stream and the lower the present value of the bond's principal, the higher discount rate.
• There is an 7% annual pay bond with face value of $100,000 with two years to maturity that is currently trading at 102, then purchase it because the bond's present value of $107,574 exceeds its $102,000 purchase price.
• The bonds and debentures that provide flexibility and reduce risk.
• Limited partners and shareholders in corporations have limited partnership.
• It includes a 5 yr. mortgage, that the main benefit to investing in an income trust/REIT/royalty trust is to deliver income.
• Debentures increase debt to provide more protection to a company.
• The most true is about mortgages is all have insurance to protect lenders if borrowers default.

CSC VOLUME ONE: Chapters 8 – 9, Test #1

• An odd lot is a group of shares that trade in less than standard trading units.
• Unlimited liability is least likely to be a benefit of common share ownership.
• A stock dividend split shares is not categorized as a restricted share.
• An investors profit is is $6,000 from purchase of 200 shares of ABC shares (bought, sold).
• There will be fewer shares at a higher price after a company orders a 1 for 3 reverse split or consolidation
• Previous day closed at $22.90
• The investor could buy 300 shares of a stock trading closed at 22.75 by opening of the stock. .
• Dividend is $ .50 per share.
• Objective is safety and less concerned with growth or inflation, buy preferred shares.
• Materials sector heavily weighted sectors of the S&P/TSX Composite Index.
• Dow Jones average is not true, it is weighted by mkt capitalization.
• It draws from trade exchanges and has high capitalization.
• Nikkei Stock Average, Japanese economy over performs and wants stock mkt exposure.
• Monday July 18 when it is day for to make funds due. Interest on margin loan is calculated daily.
• Deposit $780 securities at the price from before of 1.70.
• Loan value is 50% of that, or $550 for this sell to purchase margin surplus is 380 so the shares are 1100.
• 9900 make the additional. Shares are now 24

CSC volume one chapters 8-9 test # 2

• Subordinate vote vote shares is the vote to limit the most common stock shares.
• 30 million 90 for high after rights.
• B short 1.00 loss or profit. Sells at 8.00.
• Safety and income 6 .1% are preferred
• 60 index more stock more heavy.
• Down Jones in the states

CSC VOLUME ONE: Chapter 10, Test #1

• Liquidity is least likely to be an attractive feature of OTC derivatives for corporations.
• To guarantee performance is the most important function of the clearing corporation.
• By definition, hedging means reducing risk.
• The writer of a put option receives the premium and has the obligation to buy.
• An investor bought 3 GE OCT 30 Calls @ $2, "30" refers to the strike price.
• Referring to the Question #5, what would happen in the client's account immediately upon completion of the purchase? The cash position would be reduced by $600.
• European-style options mean that exercise takes place when the option expires.
• Which of the following options would be exercised? A $50 call purchased for $10 when the underlying is $51.
• If a put has an exercise price of $45 and the underlying security is $44, refer to the option as in the money.
• The total number of outstanding option contracts for a particular option series is known as open interest.
• All of the following are reasons to purchase call options except to insure against a future drop in price. -If an investor sells a call option but does not own the underlying asset on which the option is based, that investor is known as naked.
• If a silver mining believes it is gonna be high but silver price decreases, sell futures on short.
• Buying this is purchased and this goes down. To $ to 23 -A seller wants his stuck to go up
• Both has are obligated for sure trade.
• initial management for a new trade.
• Means there is a new seller the line to make a dayment and ship..
• Stock up to 11 per
• For stocks must be qualified
• The list are be more to know about
• 28 are the number of options that shares.

Chapter 10 Test #2

• All derivatives require a performance bond or good-faith deposit.
• Contracts being costum design.
• Commodores and financial.
• The attempt is hedged.
• At cost as you can get.
• 100 thousands in stock
• There will be stock in that
• At the end of the day.
• Then should see it.

Chapters 11 – 12 Test #1

• Are responsible for day today and personal are in business there.
• Transfer of the company.
• Share holders that get a sign off.
• Reconstruct the company there stock again.
• That set up the set of what we give there stock there

Test #2 – ANSWERS

• Sell the store in there get sold high then before.
• The machine gets you some.
• Stock has you in for sure.
• Is it is what you get with there stocks for.
• The end line you get with it.
• You get some for a side and end the day.
• All will the the people back for is
• Share there people have a some come and do.