What are the three categories of investment dealers that make up the Canadian Securities Industry?
a) retail, wholesale, and integrated
b) retail, wholesale, and institutional
c) retail, institutional, and integrated
d) retail, self-directed, and institutional
ANSWER:
c) retail, institutional, and integrated
Three categories of investment dealers are: Retail firms which include full-service investment dealers and self-directed brokers (discount brokers); Institutional firms that service clients like pension funds and mutual funds; and integrated firms
Smaller retail or institutional investment dealers are known as…
a) boutiques.
b) specialists.
c) broker-dealer firms.
d) broker-dealer agencies.
ANSWER:
a) boutiques.
The Middle Office performs functions critical to the efficient operation of the firm and include all of the following except…
- *a) Legal
b) Audits
c) Marketing
d) Compliance**
ANSWER
c) marketing
With most secondary trading of debt securities, the investment dealer acts as…
a) agent.
b) buyer.
c) seller.
d) principal.
ANSWER:
d) principal.
Which of the following best describes what a Schedule I Bank is required to do in order to remain a Schedule I Bank?
a) Voting shares must be widely held, restricting control to any one shareholder or group to no less than 20%.
b) Voting shares must be widely held, restricting control to any one shareholder or group to no more than 20%.
- *c) Voting control must be restricted, with one Canadian-based shareholder or group holding at least 20% of the voting shares.**
- *d) Voting control must be restricted, with one Canadian-based shareholder or group holding at least 50% of the voting shares.**
ANSWER:
b) Voting shares must be widely held, restricting control to any one shareholder or group to no more than 20%.
Which of the following is least likely to true about Schedule III banks?
a) They are provincially regulated.
b) They are branches of foreign institutions.
c) They focus on corporate and institutional finance.
d) Their market share in Canada is less than the Schedule I Banks’.
ANSWER:
a) They are provincially regulated.
Which of the following correctly portrays what banks that own insurance companies can do through their branch network?
a) They can sell life insurance only.
b) They can sell property and casualty insurance only.
c) They can sell insurance related to loans and mortgages only.
d) They can sell all of the above types of insurance.
What is the most important distinction between self-directed brokerage and robo-advisors?
a) Robo-advisors provide advice.
- *b) Robo-advisors charge lower commissions.
c) Robo-advisors offer a wider range of services.
d) Robo-advisors offer a wider range of products.**
ANSWER:
a) Robo-advisors provide advice.
Which of the following are three important characteristics of capital?
a) Mobile, scarce, and rare
- *b) Mobile, rare, and important
c) Mobile, scarce and important
d) Mobile, sensitive, and scarce**
- *ANSWER:**
- *d) Mobile, sensitive, and scarce**
Pools of capital gathered from investors to buy securities according to a specific investment mandate are known as…
- *a) managed funds.
b) structured funds.
c) managed products.
d) structured products.**
ANSWER:
c) managed products.
Markets are most likely characterized as…
- *a) primary and dealer markets.
b) primary and auction markets.
c) secondary and auction markets.
d) auction and dealer markets.**
ANSWER:
d) auction and dealer markets.
Three buy orders for ABC Security hit the market at 9:30:
500 shares at $10.12
400 shares at $10.10
700 shares at $10.07
Three sell orders for ABC Security hit the market at 9:30:
400 shares at $10.12
500 shares at $10.13
300 shares at $10.15
The bid-ask at 9:31 would most likely be…
a) $10.07 – $10.15
b) $10.07 – $10.12
c) $10.12 – $10.13
d) $10.12 – $10.15
ANSWER:
c) $10.12 – $10.13
Which of the following is a derivatives exchange that provides contracts to participants in the North American energy markets?
- *a) Nodal Exchange
b) ICE Futures Canada
c) Natural Gas Exchange
d) Aequitas NEO Exchange**
ANSWER:
a) Nodal Exchange
What is another term for dealer markets?
a) Listed markets
b) Unlisted markets
c) Network markets
d) Under-the-counter markets
- *ANSWER:**
- *b) Unlisted markets**
Which of the following is not true about CanDeal?
- *a) It is operated by the TMX group.
b) It is recognized as both an ATS and investment dealer.
c) It is a joint venture between Canada’s six largest investment dealers.
d) It offers both institutional and retail investors access to Government securities and money market instruments.**
Which of the following is true about CanPX?
a) It is an ATS that operates two distinct fixed-income marketplaces.
b) It provides market data and a trading platform with access to multi-dealer competitive pricing.
c) The service covers Government of Canada bonds, Treasury Bills, and corporate bonds with investment grade rating.
d) It is a joint venture between several Canadian investment dealers and inter-dealer firms, and combines digital feeds from participating dealers.
ANSWER:
d) It is a joint venture between several Canadian investment dealers and inter-dealer firms, and combines digital feeds from participating dealers.
Which of the following does OSFI regulate?
- *i) Banks**
- *ii) Investment dealers**
- *iii) Insurance companies**
- *iv) Trust and loan companies**
a) i), ii) & iv) only
- *b) i), ii) & iv) only
c) i), iii) & iv) only
d) i), ii), iii) & iv)**
ANSWER: c) i), iii) & iv) only
The function of CIPF is to safeguard investors…
- *a) against the insolvency of member firms.
b) from unprofessional investment advisors.
c) from companies which disappoint investors with their income reports.
d) against losses suffered from premature redemptions of mutual fund units.**
ANSWER:a) against the insolvency of member firms.
Which of the following phrases capture three of the four primary objectives in imposing regulation?
- *a) Fairness, Economic growth, and Social objectives
b) Fairness, Economic growth, and Economic stability
c) Fairness, Economic growth, and Consumer protection
d) Economic stability, Social objectives, and Consumer protection**
ANSWER: d) Economic stability, Social objectives, and Consumer protection
All of the following are basic methods the securities acts protect the investing public except…
a) disclosure of necessary facts.
b) enforcement of laws and policies.
c) registration of dealers and advisors.
d) analysis of publicly traded securities.
ANSWER:
d) analysis of publicly traded securities.
Barbara Tan is a registered IA with Quint Securities. She has just moved from into a new house. With respect to the responsibility under the National Registration Database (NRD)…
- *a) this should not be reported.
b) this may be reported but this is optional.
c) either Ms. Tan or Quint Securities should notify the applicable SROs.
d) both Ms. Tan and Quint Securities should notify the applicable SROs.**
ANSWER:
d) both Ms. Tan and Quint Securities should notify the applicable SROs.
