Midterm Exam Questions

Question 1

Who is most likely to participate in a bought deal?

Answer 1

An investment dealer as principal in the primary market

Question 2

Royal Bank of Canada is an example of which Schedule Bank?

Answer 2

Schedule I Bank (domestic bank)

Question 3

What is the possible risk to a bank “borrowing short and lending long”

Answer 3

Long term interest rates decrease while short term interest rates increase

Question 4

Canadian Deposite Insurance Corporation (CDIC) insures which of the following for up to $100k?

Answer 4

Bank deposits

Question 5

What is the national securities regulator in the US?

Answer 5

Securities and Exchange Commission

Question 6

A fiduciary obligation in relation to an investment advisor relates to:

Answer 6

They must operate in the best interests of their clients and not their own

Question 7

CPPIB, OMERs, and OTTP are…

Answer 7

Institutional investors, government sponsered pension plan investors, and employers of Waterloo graduates

Question 8

What SRO settles or clears trades between buyers and sellers of securities?

Answer 8

Canadian Depository for Securities (CDS)

Question 9

What APR of 8% compounded semi-annually, daily, annually, or monthly, has the highest EAR?

Answer 9

APR = 8% compounded daily (because of more frequent compounding)