Test 1 Flashcards
Trades and other transactions are cleared and settled through which of the following organizations?
a) CDS Clearing and Depository Services
b) Canadian Investor Settlement Organization
c) Investment Industry Regulatory Organization of Canada
d) Canadian Investment Industry Clearing and Settlement Group
a) CDS Clearing and Depository Services
Securities in Canada are cleared through CDS Clearing and Depository Securities. Marketplaces like the TSX and TSX Venture and ATSs report trades to CDSX clearing and settlement. Participants with access to the clearing system include banks, investment dealers and trust companies
Another term for self-directed broker is…
a) retail broker.
b) discount broker.
c) integrated dealer.
d) investment broker.
ANSWER
b) Discount broker.
Front office performs all staff functions pertaining directly to portfolio management activities and includes all of the following except…
a) Sales.
b) Trading.
c) Marketing.
d) Trade settlement.
ANSWER:
d) Trade settlement.
Voting shares of large Schedule 1 banks must be widely held, with the control of any single shareholder or group restricted to no more than ___________.
a) five percent.
b) ten percent.
c) twenty percent.
d) fifty percent.
ANSWER:
c) twenty percent.
Which of the following is not true about Schedule II Banks?
a) The deposits that they hold are eligible for deposit insurance provided by CDIC.
b) They may not engage in all the types of businesses permitted a Schedule I Bank.
c) They are incorporated and operate in Canada as federally regulated foreign bank subsidiaries.
d) They tend to derive their greatest share of revenue from retail banking and electronic financial services.
ANSWER:
b) They may not engage in all the types of businesses permitted a Schedule I Bank.
What is the most important aspect of the insurance business in Canada?
a) Underwriting.
b) Investment returns.
c) Collecting premiums.
d) Term and whole life insurance.
ANSWER:
a) Underwriting.
All of the following is true of the robo-advisor service except…
a) portfolios are regularly balanced.
b) financial planning may be offered.
c) portfolios are built primarily with mutual funds.
d) portfolios are created using algorithms based on modern portfolio theory.
ANSWER
c) portfolios are built primarily with mutual funds.
Which of the following best describes the relationship between direct and indirect investment?
a) Direct investment occurs when savers directly buy securities issued by government and corporations, indirect investment occurs when those savers sell the securities to other savers.
b) Indirect investment occurs when the saver buys the securities issued by government and corporations, which in turn use the funds for direct investment in plant, equipment, etc.
c) Direct investment occurs when savers directly buy an ownership position from a corporation, indirect investment occurs when savers purchase debt securities from government or corporations.
d) There is no link between direct and indirect investment.
ANSWER
b) Indirect investment occurs when the saver buys the securities issued by government and corporations, which in turn use the funds for direct investment in plant, equipment, etc.
Which of the following are not structured products?
a) Exchanged-traded funds
b) Principal-protected notes
c) Index-linked guaranteed investment certificates
d) All of the above are structured products.
ANSWER:
a) Exchanged-traded funds
Which of the following is not true with respect to Canadian Exchanges and the products that trade on them?
a) The Toronto Stock Exchange (TSX) lists equities and some debt instruments.
b) The Montreal Exchange (Bourse de Montreal) trades all financial and equity futures and options.
c) ICE Futures Canada trades agricultural futures and options.
d) The TSX Venture Exchange trades junior securities, income trusts and ETFs.
ANSWER:
d) The TSX Venture Exchange trades junior securities, income trusts and ETFs.
In Ontario, trades in unlisted securities and unquoted securities are reported through the web-based system of the…
a) Canada Unlisted Board.
b) CBID Institutional Group.
c) Alternative Trading Systems.
d) Unlisted securities and unquoted securities are not reported.
a) Canada Unlisted Board.
Canadian Unlisted Board Inc. (CUB) - In most of Canada, there is no requirement for firms to report unlisted trades. Ontario is the exception. The Ontario Securities Commission (OSC) requires that trades of unlisted securities be reported through the Canadian Unlisted Board Inc. (CUB). CUB offers an Internet web-based system for dealers to report completed trades in unlisted and unquoted equity securities in Ontario, as required under the Ontario Securities Act
CanDeal was established to facilitate trading in…
a) bonds.
b) options.
c) derivatives.
d) mutual funds.
ANSWER:
a) bonds
CanDeal, a member of IIROC, is a joint venture between Canada’s six largest investment dealers,and is operated by the TMX Group. It is recognized as both an ATS and an investment dealer.It offers institutional investors access to Government securities and to money market instruments.
Which group’s mission is it to develop a national regulatory system that fosters fair, efficient, and vibrant capital markets?
a) Canadian Securities Administrators
b) The Securities and Exchange Commission
c) Office of the Superintendent of Financial Institutions
d) Investment Industry Regulatory Organization of Canada
ANSWER:
a) Canadian Securities Administrators
In its role of regulator, IIROC is least likely to perform which of the following functions?
a) Registration
b) Enforcement
c) Financial compliance
d) IIROC performs all of the above.
ANSWER:
d) IIROC performs all of the above.
Ms. Xu had $1,250,000 in an Investment Account and $700,000 in her RRSP account. According to CIPF guidelines, she would be covered for…
a) $1,000,000 in her Investment Account.
b) $1,000,000 in her Investment Account or $700,000 in her RRSP account.
c) $1,000,000 in her Investment Account and $700,000 in her RRSP account.
d) $1,250,000 in her Investment Account and $700,000 in her RRSP account.
ANSWER:
c) $1,000,000 in her Investment Account and $700,000 in her RRSP account.
