IFIC CHAPTER 1 – 3 QUESTIONS AND ANSWERS
Fixed Trusts - Answers -First investment funds available to the general public. Consist
of domestic and foreign government bonds.
Closed-End Funds - Answers -Corporations whose business is making investments.
The firm would issue shares to investors and use the proceeds to create an investment
portfolio. After the initial issue of shares, the fund is closed to other investors.
Open-ended mutual funds - Answers -Mutual fund units are always available from the
fund to meet the purchasing demands of investors without restriction. Mutual funds are
only available for purchase through a fund company or financial institution and do not
trade on a stock exchange.
Types of Responsibility - Answers -Legal, Ethical, Professional
Legal Responsibility - Answers -Make legal responsibilities clear, An investment is
suitable if its the client's goals, financial condition, personal circumstances, investment
knowledge and risk tolerance. All provincial securities act make this legal responsibility
clear.
Ethical Responsibility - Answers -You must place your client's needs before your own
needs (such as reaching a sales target) or those of your dealer.
Professional Responsibility - Answers -You must provide the best client service
possible.
Compliance - Answers -Means following the rules, whether those rules are legal
requirements or dealer policies. If you are not in compliance you may be liable to
subject to dismissal.
KYC - Answers -1. Financial goals and objectives.
2. Financial circumstances.
3. Personal circumstances.
4. Investment knowledge
5. Ability to tolerate risk
1. Direct
2. Direct
3. Indirect
4. Indirect - Answers -Classify if being direct or indirect investment:
1. government building new highway
2. Ford making new facility
3. I buy stocks of Apple and Google
, 4. I deposit bonds of Canada
1. Mobile
2. Sensitive to Environment
3. Scarce - Answers -What are the 3 characteristics of Capital?
n/a - Answers -NOTES:
The decision as to where capital will flow is guided by country risk evaluation:
politics. economics. fiscal policy(taxes). monetary
1) savings
2 savers
3) individuals. businesses. governments
我。公。政。 - Answers -The only source of capital is 1) _________. Governments that
are able to operate at a surplus are called 2)___________ . The users of capital are
_____, _____, _______
1. Retail (Henry Sy)
2. Institutional (Industrial Alliance)
3. Foreign (lao wai) - Answers -What are the 3 important sources of capital?
1. T-bills
2, Marketable bonds
3. CSB
4. CPB - Answers -When revenue fails to meet expectations, government must borrow.
They make use of four main instruments:
SECURITIES - Answers -____ are formal legal documents that set out the rights and
obligations of buyers and sellers
1. Debt - bonds, debentures, T-bills
2. Equity - common/preferred
3. Investment Funds - mutual funds
4. Derivatives - options / forwards
5. OTHER - linked notes and ETFs - Answers -Financial Instruments are divided into
broad classes. What are they? (5)
1) auction market
2) dealer market - Answers -Markets can also be divided into
1)
2)
The price at which stock is trade is the highest price the buyer is willing to pay (bid) and
the lowest price the seller is willing to accept (Ask). Canada's stock market is an auction
market.
1. CNSX
Fixed Trusts - Answers -First investment funds available to the general public. Consist
of domestic and foreign government bonds.
Closed-End Funds - Answers -Corporations whose business is making investments.
The firm would issue shares to investors and use the proceeds to create an investment
portfolio. After the initial issue of shares, the fund is closed to other investors.
Open-ended mutual funds - Answers -Mutual fund units are always available from the
fund to meet the purchasing demands of investors without restriction. Mutual funds are
only available for purchase through a fund company or financial institution and do not
trade on a stock exchange.
Types of Responsibility - Answers -Legal, Ethical, Professional
Legal Responsibility - Answers -Make legal responsibilities clear, An investment is
suitable if its the client's goals, financial condition, personal circumstances, investment
knowledge and risk tolerance. All provincial securities act make this legal responsibility
clear.
Ethical Responsibility - Answers -You must place your client's needs before your own
needs (such as reaching a sales target) or those of your dealer.
Professional Responsibility - Answers -You must provide the best client service
possible.
Compliance - Answers -Means following the rules, whether those rules are legal
requirements or dealer policies. If you are not in compliance you may be liable to
subject to dismissal.
KYC - Answers -1. Financial goals and objectives.
2. Financial circumstances.
3. Personal circumstances.
4. Investment knowledge
5. Ability to tolerate risk
1. Direct
2. Direct
3. Indirect
4. Indirect - Answers -Classify if being direct or indirect investment:
1. government building new highway
2. Ford making new facility
3. I buy stocks of Apple and Google
, 4. I deposit bonds of Canada
1. Mobile
2. Sensitive to Environment
3. Scarce - Answers -What are the 3 characteristics of Capital?
n/a - Answers -NOTES:
The decision as to where capital will flow is guided by country risk evaluation:
politics. economics. fiscal policy(taxes). monetary
1) savings
2 savers
3) individuals. businesses. governments
我。公。政。 - Answers -The only source of capital is 1) _________. Governments that
are able to operate at a surplus are called 2)___________ . The users of capital are
_____, _____, _______
1. Retail (Henry Sy)
2. Institutional (Industrial Alliance)
3. Foreign (lao wai) - Answers -What are the 3 important sources of capital?
1. T-bills
2, Marketable bonds
3. CSB
4. CPB - Answers -When revenue fails to meet expectations, government must borrow.
They make use of four main instruments:
SECURITIES - Answers -____ are formal legal documents that set out the rights and
obligations of buyers and sellers
1. Debt - bonds, debentures, T-bills
2. Equity - common/preferred
3. Investment Funds - mutual funds
4. Derivatives - options / forwards
5. OTHER - linked notes and ETFs - Answers -Financial Instruments are divided into
broad classes. What are they? (5)
1) auction market
2) dealer market - Answers -Markets can also be divided into
1)
2)
The price at which stock is trade is the highest price the buyer is willing to pay (bid) and
the lowest price the seller is willing to accept (Ask). Canada's stock market is an auction
market.
1. CNSX
