Canadian Securities Course Exam2 (CSC2) Free Practice Test

Question 1

What is the bottom price of a security's trading range at which most investors would sense value and be willing to buy it?

A. Moving average.

B. Reversal pattern.

C. Support level.

D. Sentiment indicator.

Correct Answer: C

Question 2

What is a characteristic of provincial savings bonds that distinguishes them from other provincial bonds?

A. They are backed by provincial assets pledged an security.

B. They can &e purchased only by residents of the province.

C. They can be purchased at any time of the year.

D. They do not have redemption rules.

Correct Answer: B

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Question 3

What document must be provided to an investor before they purchase a mutual fund?

A. The annual information form.

B. A simplified prospectus.

C. The annual audited statements.

D. A Fund Facts document.

Correct Answer: D

Question 4

What is a structured product?

A. An equity index.

B. A mortgage loan.

C. A principle-protected note.

D. A credit card receivable

Correct Answer: C

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Question 5

The consumer price index was 125.9 in December of last year and 123.0 in December of the year before What was the inflation rate last year?

A. 0.98%

B. 2.36%

C. 2.30%

D. 1.02%

Correct Answer: B

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Question 6

What action must an investment advisor take when submitting a trade ticket for a short sale?

A. Verify the client can borrow the shares.

B. Mark it as a margin order

C. Mark the sell-order ticket as a short sate

D. Obtain minimum margin amount from client

Correct Answer: C

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Question 7

Which type of ETF is also referred to as smart beta ETF?

A. Synthetic

B. Standard

C. Rules-based

D. Index-based

Correct Answer: C

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Question 8

An investor has the following separate stock transactions:

What is the investor's overall adjusted cost base per share? (Round two decimal points.)

A. $16.38

B. $15.83

C. $15.72

D. $15.95

Correct Answer: D

Question 9

How do index-tracking ETFs differ from index mutual funds?

A. ETFs have higher tracking errors

B. ETFs have higher administrative costs of record-keeping

C. Index mutual funds only have initial investment and trading fees

D. Index mutual funds have higher implicit trading costs

Correct Answer: D

Question 10

A financial institution is selling their pooled mortgages to a Special Purpose Vehicle. What process are they engaging in?

A. Credit spread arbitrage.

B. Share splitting.

C. Merger strategy.

D. Asset securitization.

Correct Answer: D

Question 11

For institutional trading, when does the investor need to provide trade-matching elements?

A. With the initial order.

B. Once the trade clears.

C. After the dealer issues a trade execution notice.

D. One the custodian confirms the trade.

Correct Answer: C

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Question 12

How does asset-backed commercial paper (ABCP) differ from mortgage-backed securities?

A. ABCP provides high liquidity.

B. ABCP minimizes roll-over risk.

C. ABCP offers maturity dates of at least three years.

D. ABCP guarantees principle repayment if held to maturity

Correct Answer: A

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Question 13

What is the main advantage ETFs have over mutual funds?

A. Improved tax efficiency

B. Ability to set up pre-authorized contributions

C. Active management

D. Flexible dividend reinvestment

Correct Answer: A

Question 14

For a market capitalization-weighted ETF focused on the S&P/TSX Composite Index, what is likely the greatest contributor to underperformance relative to the reference index?

A. Rebalancing.

B. Fees.

C. Cash drag.

D. Liquidity.

Correct Answer: C

Question 15

What risk exists for an investor unable to readily exit a position in an alternative investment near current prices?

A. Trading.

B. Deal breakage.

C. Default.

D. Liquidity.

Correct Answer: D

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CSI Canadian Securities Course Exam2 (CSC2) Free Practice Test