CSC 1

Question 1

Types of investment Dealers

Answer 1

Retail Firms, Institutional Firms, integrated Firms

Question 2

What type of financial intermediary owns securities as part of its inventory?

Answer 2

Principle

Question 3

What type of insurance generates the largest aggregate premiums for property and casualty insurance providers?

Answer 3

Auto Insurance

Question 4

Which type of Canadian bank tends to focus on providing corporate and investment banking?

Answer 4

Schedule III Banks

Question 5

What is the key difference between Schedule I and Schedule II banks?

Answer 5

Foreign Ownership

Question 6

ABC Securities Inc. has both retail and institutional clients, and underwrites a wide range of federal, provincial, municipal and corporate debt, as well as equity issues. Which type of investment dealer is ABC?

Answer 6

Integrated firms

Question 7

Brooklin’s bank has refused to loan her money for an upcoming vacation due to her poor credit history. Which financial intermediary should she consider approaching to obtain funds?

Answer 7

Consumer Finance Company

Question 8

Investment dealer

Answer 8

a person or company that engages in the business of trading in securities in the capacity of an agent or principal and is a member of the IIROC

Question 9

An investment dealer has made a commitment to maintain the liquidity of a specific security trading in the market. What can the dealer do to meet this commitment?

Answer 9

Hold shares of security in inventory to ensure availability

Question 10

Integrated firm

Answer 10

investment dealer that offers products and services that cover all aspects of the industry including full participation in both the institutional and retail markets

Question 11

Institutional firm

Answer 11

Investment dealer that serves institutional clients exclusively

Question 12

Firewall

Answer 12

Policies implemented to separate and isolate persons with the firm who make investment decisions from persons with an a firm who are privy to undisclosed material information which my influencers decisions for example there should be separate fax machines for research departments in sales departments

Question 13

Fintech

Answer 13

Financial technology companies that take advantage of computer technology to provide more efficient financial products and services

Question 14

Financial intermediary

Answer 14

An institution such as a bank life insurance company credit union in mutual fund which receives cash which it gets from suppliers of capital. Facilitates a transfer from savers to users.

Question 15

Discount brokers

Answer 15

brokerage houses that buy and sell securities for clients at a greater commission discount than for service firms also known as self-directed brokers

Question 16

Consumer finance company

Answer 16

make direct cash loans to consumers who usually are unable to secure a loan from a bank consumer finance companies typically charge a higher interest rate and banks.

Question 17

Closed end fund

Answer 17

shares enclosed and investment companies are readily transferrable in the open market and are bought and sold like other shares capitalization is fixed

Question 18

Clearing

Answer 18

The process of confirming and matching security trade details

Question 19

CDS clearing and depository services

Answer 19

CDS provides customers with physical and electronic facilities to deposit in withdraw depository eligible securities and manage the related ledger positions. CDS also provides electronic clearing services both domestically and internationally allowing customers to report confirm and settle security trade transactions.

Question 20

Broker

Answer 20

an investment dealer or a dually registered individual that is registered to trade in securities in the capacity of an agent or principle and is a member of a self regulatory organization

Question 21

What is the main function of CDS Clearing and Depository Services Inc.?

Answer 21

Daily netting of securities transactions

Question 22

Back office Functions

Answer 22

Settles the firms security transactions.

eg. Trade settlement

Question 23

Middle office functions

Answer 23

Performs functions critical to the efficient operation of the firm
eg. Compliance, accounting, audits, Legal

Question 24

Functions of Front Office

Answer 24

Performing all staff functions pertaining directly to portfolio management
eg. trading, sales, marketing, portfolio management

Question 25

Agent

Answer 25

An investment dealer operates as a agent when I ask on behalf of a buyer or seller of a security and does not itself on title to securities at any time during the transaction.

Question 26

Underwriting

Answer 26

The purchases for resale of a security issue by one or more investment dealers or underwriters. The formal agreements pertaining to such a transaction are called underwriting agreements.

Question 27

Which transaction would occur in a dealer market?

Answer 27

Investor sells $25,000 of government of Canada bonds