Canadian Securities (CSC) Test #1 Questions And Answers 100% Pass

Canadian Securities (CSC) Test #1 Questions And Answers 100% Pass Retail firms - answerfull service and discount brokerage firms for individuals. Institutional firms - answerincludes pension funds, mutual funds, and insurance companies. Integrated firms - answercontains all aspects of retail and institutional firms. Front office - answerin charge of portfolio management, marketing, sales, and trading. Middle office - answerin charge of compliance, accounting, audits, and legal. Back office - answerin charge of settlements and clearing. Schedule I banks - answerlarge domestic banks. There are ownership restrictions on shares - must be widely held. Schedule II banks - answerlarge foreign banks. Can do same activities as domestic banks. Schedule III banks - answerforeign branches of banks. They are limited, with a more institutional focus. Trust company - answeracts as a trustee. Auction market - answermarket in which securities are bought and sold by brokers acting as agents for their clients (stock exchanges). Dealer market - answera network of marketplaces. Here, trades are conducted OTC and consist of bonds and debentures. Equity electronic trading system - answercompetes with existing exchanges. They can only trade stocks that are on an existing exchange. They may have benefits such as different hours, better commission, etc. Fixed-income electronic trading system - answerwhere almost all bonds are traded (such as CanDeal). Structured product - answerhas the characteristics of debt, equity, and the investment fund (can be in the form of principal-protected notes or index-linked guarantees). ©THEBRIGHT EXAM SOLUTIONS 11/06/2024 10:41 AM IIROC (Investment Industry Regulatory Organization of Canada) - answerthe Canadian investment industry's SRO. It carries out its responsibilities through setting and enforcing rules regarding the proficiency, business, and financial conduct of dealer firms and their registered employees. MFDA (Mutual Fund Dealers Association) - answerthe SRO that regulates the distribution (dealer) side of the mutual fund industry in Canada. OSFI (Office of the Superintendent of Financial Institutions) - answerthe federal regulatory agency whose main responsibilities regarding insurance companies and segregated funds are to ensure that the companies issuing the funds are financially solvent. CDIC (Canadian Deposit Insurance Corporation) - answera federal Crown Corporation providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails. CIPF (Canadian Investor Protection Fund) - answera fund that protects eligible customers in the event of the insolvency of an IIROC dealer member. General acct. = $1M total Separate acct. = $1M each MFDA IPC (Mutual Fund Dealers Association Investor Protection Corporation) - answerprovides protection for eligible customers of insolvent MFDA member firms. General acct. = $1M total Separate acct. = $1M each Gatekeeper - answerprotects markets from potentially illegal client activity by collecting information, monitoring activity, and reporting suspicious behaviour. "Know your client" rule - answersalespersons must use diligence to learn essential facts about the client (including every account and order) before entering into the relationship, in order to make appropriate decisions for the client. Ombudsman for Banking Services and Investments (OBSI) - answeran independent organization that investigates customer complaints against financial services providers (non binding, but may hurt the company's reputation if it does not comply). Front running - answerwhen a broker puts his own account's order in front of a customer's order, knowing the customer's order will move prices so the broker can make a profit. National "Do not call" List (DNCL) - answerprohibits telemarketers from calling any number on the list that has been registered for 31+ days. Expansion - answercharacterized by stable inflation, adequate inventory, start-ups exceed bankruptcies, strong stock market, rising market activity (leading indicator), and falling unemployment. ©THEBRIGHT EXAM SOLUTIONS 11/06/2024 10:41 AM Peak - answerwhen demand outstrips capacity, wages rise, interest rates fall, sales decline, and inventory rises. Stock prices decline, and market activity declines. Contraction - answerwhen economic activity declines, profits decline, spending declines, and saving increases. Trough - answerwhen the bond market rallies (prices rise as rates fall), and consumers start spending again. Recovery - answerwhen GDP returns to its previous peak, investment rises, and inflation is set to fall further. Current account - answerincludes the exchange of goods between Canadians and foreigners, earnings from individual income, dividends, and transfers for foreign aid. Capital and financial account - answerincludes the financial flows between Canadians and foreigners (selling assets or borrowing funds to deal with surplus/deficit). Leading indicators - answerpeak and trough before the overall economy (such as housing starts or stock market indexes). Coincident indicators - answerchange at the same time as the market - GDP. Lagging indicators - answerchange after the economy, such as unemployment. Natural unemployment rate - answerthe unemployment rate when the economy is at full employment. Higher interest rates - answer- Increase cost of capital = leading to lower investment - Discourages consumer spending - May lead to economic slowdown Exchange rates - answerincreased by rising interest rates or sale of commodities. Fiscal policy - answerIn charge of: - Govt. spending, taxation, borrowing - Federal Budget Monetary policy - answerIn charge of: - Canadian financial system (regulation, clearing, and settlement) - Issuing bank notes - Act as Govt. fiscal agent (banke