IFSE - CIFC - Unit 5 Questions and Verified
Correct Answers
Investments that hold a collection of different securities such as equities and bonds. answers -
Mutual Funds
Collectively, the securities in a mutual fund answers - Holdings
1. Safety of Principal
2. Income
3. Growth answers - The 3 main investment objectives
Strive to protect investors from losing any of their original investment. Investors expect to get
back at a minimum the amount of money they put into the investment. answers - Safety of
Principal
Provide investors with a regular source of income over the course of their investment time
horizon. answers - Income
Have the potential to appreciate over time. Investors purchase with this this investment
objective in the hope that the market price of the securities when they sell their investments
will be higher than the original purchase price. answers - Growth
To raise capital. Government can borrow money from the public by issuing fixed income
securities (short-term, medium-term, long-term) answers - Reason why Government issue
securities
, - mature within 5 years or less. Includes treasury bills, and provincial or municipal short-term
papers answers - Short-term Government Securities
- Mature between 5 and 10 years. Ex: Federal, provincial, or municipal bonds answers -
Medium-term Government Securities
Mature in 10 years or more. Ex: Government of Canada bonds answers - Long-term
Government Securities
Share ownership that entitles investors to a portion of the company's earnings and some control
of the corporation answers - Common Shares
Share ownership that entitles investors to receive a fixed amount of the company's earnings on
an ongoing basis. This type of share ownership typically does not give investors control of the
corporation answers - Preferred Shares
They can borrow money from the public by issuing bonds:
- money market securities, including both banker's acceptances and commercial papers
- medium- and long-term bonds answers - When corporations don't want to divide ownership
any further
Essentially loans provided by investors. The debt security includes contractual obligation stating
that the issuing government/corporation must pay interest and return the principal to the
investor by the maturity date. answers - Fixed Income Securities
Aka face value or face amount answers - Par Value
Correct Answers
Investments that hold a collection of different securities such as equities and bonds. answers -
Mutual Funds
Collectively, the securities in a mutual fund answers - Holdings
1. Safety of Principal
2. Income
3. Growth answers - The 3 main investment objectives
Strive to protect investors from losing any of their original investment. Investors expect to get
back at a minimum the amount of money they put into the investment. answers - Safety of
Principal
Provide investors with a regular source of income over the course of their investment time
horizon. answers - Income
Have the potential to appreciate over time. Investors purchase with this this investment
objective in the hope that the market price of the securities when they sell their investments
will be higher than the original purchase price. answers - Growth
To raise capital. Government can borrow money from the public by issuing fixed income
securities (short-term, medium-term, long-term) answers - Reason why Government issue
securities
, - mature within 5 years or less. Includes treasury bills, and provincial or municipal short-term
papers answers - Short-term Government Securities
- Mature between 5 and 10 years. Ex: Federal, provincial, or municipal bonds answers -
Medium-term Government Securities
Mature in 10 years or more. Ex: Government of Canada bonds answers - Long-term
Government Securities
Share ownership that entitles investors to a portion of the company's earnings and some control
of the corporation answers - Common Shares
Share ownership that entitles investors to receive a fixed amount of the company's earnings on
an ongoing basis. This type of share ownership typically does not give investors control of the
corporation answers - Preferred Shares
They can borrow money from the public by issuing bonds:
- money market securities, including both banker's acceptances and commercial papers
- medium- and long-term bonds answers - When corporations don't want to divide ownership
any further
Essentially loans provided by investors. The debt security includes contractual obligation stating
that the issuing government/corporation must pay interest and return the principal to the
investor by the maturity date. answers - Fixed Income Securities
Aka face value or face amount answers - Par Value
