Chapter 5 - Equity Securities

Question 1

What are a dealer’s rating categories?

Answer 1

Rating categories represent a statement about a stock’s expected return relative to all stocks in the analyst’s coverage universe. An example would be using 3 generic ratings such as “sector outperform”, “sector perform”, “sector underperform”.

Question 2

What is the purpose of CIRO’s IDPC Rule 3600?

Answer 2

Pertains to research reports. It sets out a list of restrictions on CIRO Dealer Members and their analysts, along with disclosure requirements for their research reports.

Question 3

What is the general role of economists?

Answer 3

They research, collect and analyze economic data, monitor economic trends, and develop economic forecasts. The output of economists is ultimately used by equity analysts, market strategists, and IAs.

Question 4

What do quantitative analysts do?

Answer 4

Combine historical fundamental data and statistical analyses using computerized models to identify the best stocks according to specified criteria.

Question 5

What do technical analysts do?

Answer 5

Analyze historical market action to determine probably future price trends.

Question 6

What are the 3 primary sources of information available to a technical analyst?

Answer 6

1. Price
2. Volume
3. Time