CIRO DERIVATIVES Exam Possible QUESTION
AND ANSWERS 2026
1. What is the term used to describe a client's willingness to accept risk in their
investments?
Investment goal
Risk appetite
Investment horizon
Risk tolerance
2. Under the Money Laundering Regulations how long are firms required to keep
records?
One year
Five years
Two years
Three years
3. What is the primary objective of government fiscal policy?
To control inflation by setting interest rates
To directly control the wages and employment levels in private businesses
To manage public spending and taxation to stabilize the economy
To regulate the stock market and control corporate mergers
4. In relation to an eligible complaint that reaches the Financial Ombudsman, which of
the following is TRUE?
It is resolved by the Ombudsman
It is resolved by an FCA inspector
It is resolved between the firm and the complainant under supervision
It is funded by the Ombudsman and considered in a court of law
,5. If an investment dealer discovers that a long-term client has recently become a
politically exposed person, what steps should they take to ensure compliance with
the PCMLTFA?
Freeze the client's account and inform the Canadian Securities
Administrators.
Terminate the client's account and file a suspicious transaction report to
FINTRAC.
Contact the client to confirm their status and apply simplified due diligence
if confirmed.
Implement enhanced ongoing due diligence measures to monitor the
client's transactions for any suspicious activity.
6. Why is it important for an Investment Dealer to ensure pricing transparency on a
crypto-asset trading platform?
It simplifies the process of trading for the dealer and clients.
It guarantees that all clients will be satisfied with the pricing.
It allows the dealer to avoid any legal repercussions from trading activities.
It helps build trust with clients and ensures compliance with regulatory
expectations.
7. If an investment dealer fails to provide a relationship disclosure in plain language,
what potential consequence could arise?
No consequences as it is not a mandatory requirement.
Improved client satisfaction and trust.
Increased risk of client misunderstandings and potential regulatory
penalties.
Enhanced marketing opportunities for the dealer.
8. What is one key responsibility of an Investment Dealer when addressing client
concerns about a crypto-asset trading platform?
, Adjust pricing of the CTP to reflect the pricing of the dealer's other
marketplaces, ensuring consistent rates across all platforms
Maintain detailed records of client complaints but take no further action
since crypto assets are not subject to traditional securities regulations
Ensure pricing transparency by disclosing how prices are determined and
demonstrating that they align with the platform's stated policies
Suspend trading on the CTP until pricing is consistent with other
marketplaces and continue to monitor complaints that are received
9. If a client with a low risk appetite is recommended a high-risk investment, what
steps should the investment dealer take to address this mismatch?
Provide the client with more information about high-risk investments.
Encourage the client to increase their risk appetite.
Reassess the client's investment strategy and recommend suitable
alternatives.
Ignore the client's concerns and proceed with the investment.
10. Tracking moving averages is used for which of the following purposes? I. Estimate
future price fluctuations; II. Determine when to buy; III. Discover changes in a
trend; IV. Determine when to sell
I only
II, III & IV
I & II
I, II, III & IV
11. Why is a rude interaction with a client considered a reportable service complaint
for an Investment Dealer?
It is a personal issue between the employee and the client.
It indicates potential fraud by the employee.
It is a violation of financial regulations.
It reflects on the quality of service provided to clients.
,12. Describe the significance of the Financial Services Regulatory Authority of Ontario
(FSRA) in the context of financial regulation in Canada.
The FSRA primarily focuses on supervising Investment Dealers' activities to
enhance market competition.
The FSRA plays a crucial role in ensuring the stability and integrity of
financial services by regulating pension funds and insurance.
The FSRA oversees the clearing of securities transactions to facilitate
efficient market operations.
The FSRA is responsible for managing anti-money laundering regulations to
prevent financial crimes.
13. What type of financial information must an Investment Dealer provide to its
shareholders according to regulatory requirements?
An overview of competitor strategies in the investment market
A list of all investment products offered by the dealer
A summary of financial statements based on its latest annual audited
statements
A detailed report on employee performance metrics
14. What is the primary function of a moving average in technical analysis?
To calculate a company's normal debt-to-equity ratio
To determine the intrinsic value of a stock
To smooth out price data to identify trends over a specific period
To assess the company's profitability over a specific time period
15. The Canadian Bank Act:
governs the operations of the chartered banks
specifies the reserve requirements of chartered banks
is revised every ten years to keep up with changing financial and economic
circumstances
AND ANSWERS 2026
1. What is the term used to describe a client's willingness to accept risk in their
investments?
Investment goal
Risk appetite
Investment horizon
Risk tolerance
2. Under the Money Laundering Regulations how long are firms required to keep
records?
One year
Five years
Two years
Three years
3. What is the primary objective of government fiscal policy?
To control inflation by setting interest rates
To directly control the wages and employment levels in private businesses
To manage public spending and taxation to stabilize the economy
To regulate the stock market and control corporate mergers
4. In relation to an eligible complaint that reaches the Financial Ombudsman, which of
the following is TRUE?
It is resolved by the Ombudsman
It is resolved by an FCA inspector
It is resolved between the firm and the complainant under supervision
It is funded by the Ombudsman and considered in a court of law
,5. If an investment dealer discovers that a long-term client has recently become a
politically exposed person, what steps should they take to ensure compliance with
the PCMLTFA?
Freeze the client's account and inform the Canadian Securities
Administrators.
Terminate the client's account and file a suspicious transaction report to
FINTRAC.
Contact the client to confirm their status and apply simplified due diligence
if confirmed.
Implement enhanced ongoing due diligence measures to monitor the
client's transactions for any suspicious activity.
6. Why is it important for an Investment Dealer to ensure pricing transparency on a
crypto-asset trading platform?
It simplifies the process of trading for the dealer and clients.
It guarantees that all clients will be satisfied with the pricing.
It allows the dealer to avoid any legal repercussions from trading activities.
It helps build trust with clients and ensures compliance with regulatory
expectations.
7. If an investment dealer fails to provide a relationship disclosure in plain language,
what potential consequence could arise?
No consequences as it is not a mandatory requirement.
Improved client satisfaction and trust.
Increased risk of client misunderstandings and potential regulatory
penalties.
Enhanced marketing opportunities for the dealer.
8. What is one key responsibility of an Investment Dealer when addressing client
concerns about a crypto-asset trading platform?
, Adjust pricing of the CTP to reflect the pricing of the dealer's other
marketplaces, ensuring consistent rates across all platforms
Maintain detailed records of client complaints but take no further action
since crypto assets are not subject to traditional securities regulations
Ensure pricing transparency by disclosing how prices are determined and
demonstrating that they align with the platform's stated policies
Suspend trading on the CTP until pricing is consistent with other
marketplaces and continue to monitor complaints that are received
9. If a client with a low risk appetite is recommended a high-risk investment, what
steps should the investment dealer take to address this mismatch?
Provide the client with more information about high-risk investments.
Encourage the client to increase their risk appetite.
Reassess the client's investment strategy and recommend suitable
alternatives.
Ignore the client's concerns and proceed with the investment.
10. Tracking moving averages is used for which of the following purposes? I. Estimate
future price fluctuations; II. Determine when to buy; III. Discover changes in a
trend; IV. Determine when to sell
I only
II, III & IV
I & II
I, II, III & IV
11. Why is a rude interaction with a client considered a reportable service complaint
for an Investment Dealer?
It is a personal issue between the employee and the client.
It indicates potential fraud by the employee.
It is a violation of financial regulations.
It reflects on the quality of service provided to clients.
,12. Describe the significance of the Financial Services Regulatory Authority of Ontario
(FSRA) in the context of financial regulation in Canada.
The FSRA primarily focuses on supervising Investment Dealers' activities to
enhance market competition.
The FSRA plays a crucial role in ensuring the stability and integrity of
financial services by regulating pension funds and insurance.
The FSRA oversees the clearing of securities transactions to facilitate
efficient market operations.
The FSRA is responsible for managing anti-money laundering regulations to
prevent financial crimes.
13. What type of financial information must an Investment Dealer provide to its
shareholders according to regulatory requirements?
An overview of competitor strategies in the investment market
A list of all investment products offered by the dealer
A summary of financial statements based on its latest annual audited
statements
A detailed report on employee performance metrics
14. What is the primary function of a moving average in technical analysis?
To calculate a company's normal debt-to-equity ratio
To determine the intrinsic value of a stock
To smooth out price data to identify trends over a specific period
To assess the company's profitability over a specific time period
15. The Canadian Bank Act:
governs the operations of the chartered banks
specifies the reserve requirements of chartered banks
is revised every ten years to keep up with changing financial and economic
circumstances
