2/14/25, 12:12 AM Check Companion
Check: Volume 2 Practice Test 2
Reports
Overall Results
Score: Number
Attempt Questions Correct Your Score
71%
1 100 71 71%
You have passed the test.
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,2/14/25, 12:12 AM Check Companion
Learning Domain Results
Score: Number
Learning Domain Questions Correct Your Score
71%
The Canadian Marketplace 0 0 0%
Investment Analysis 18 10 56%
Portfolio Analysis 18 14 78%
Mutual Funds 14 12 86%
Exchange-Traded Funds 9 6 67%
Alternative Investments,
Other Managed and
Structured Products 18 11 61%
Canadian Taxation 4 4 100%
Fee-Based Accounts and
Working with the Retail
Client 10 6 60%
Working with the
Institutional Client 9 8 89%
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,2/14/25, 12:12 AM Check Companion
Question Results
1. During which phase of the life cycle would you expect to find clients with a focus on estate building and wealth transfer?
A. Nearing retirement.
B. Mature earning years.
Good choice! C. Retired.
D. Family commitment years.
Feedback: During the retired phase of the life cycle, clients often want to leave an inheritance for children and grandchildren. Therefore,
many clients at this stage focus on estate building and wealth transfer.
Reference | Chapter 26: Working with the Retail Client
Learning Domain | Fee-Based Accounts and Working with the Retail Client
2. The following conversation happens between an Ontario-licensed mutual fund salesperson and his Ontario-resident client:
“If you purchase XYZ mutual fund shares today, you’ll get the price at today’s close. If you decide to sell them later, the mutual fund will buy
them back. If you’re not ready to do the trade today, call me tomorrow and we’ll give you today’s closing price.”
What unacceptable sales practice occurred in this conversation?
A. He guaranteed the repurchase of securities.
Good choice! B. He backdated a purchase order.
C. He offered his services in the wrong jurisdiction.
D. He promised a future price.
Feedback: The sole unacceptable sales practice here is found in the final statement, “If you’re not ready to do the trade today ...” It is
unlawful for a salesperson to backdate an order in an attempt to buy shares or units at a previous day’s price. Otherwise, all of the
statements are accurate and acceptable. The salesperson states that the fund will buy back the securities, which falls under the right of
redemption that applies to all mutual funds. He correctly identifies the price the investor will receive if they purchase the shares today without
guaranteeing a specific price. And, because the salesperson is licensed in Ontario, he is registered in the province in which he is working.
Reference | Chapter 17: Mutual Funds: Structure and Regulation
Learning Domain | Mutual Funds
3. Which type of withdrawal plan allows an investor to receive annual income from a fund by redeeming a specified percentage of fund
holdings on each withdrawal date?
A. Fixed-dollar withdrawal plan.
B. Life expectancy-adjusted withdrawal plan.
C. Fixed-period withdrawal plan.
Good choice! D. Ratio withdrawal plan.
Feedback: In a ratio withdrawal plan, the investor receives annual income from the fund by redeeming a specified percentage of fund
holdings on each withdrawal date.
Reference | Chapter 18: Mutual Funds: Types and Features
Learning Domain | Mutual Funds
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, 2/14/25, 12:12 AM Check Companion
4. Adrian, an investment advisor, receives a request from his client to purchase 100,000 shares of LFS Corp. at $20. Adrian is unfamiliar with
LFS, and he and his client have never discussed the possibility of placing orders for securities that Adrian himself has not recommended.
Which prime value would Adrian be compromising if he were to place the order without researching LFS?
A. Professionalism.
B. Confidentiality.
Good choice! C. Duty of care.
D. Compliance.
Feedback: According to the prime value of duty of care, an unsolicited order is an order entered by a client that was not recommended by
the advisor or anyone at the advisor’s firm. In giving advice to clients, advisors must provide appropriate cautionary advice with respect to
unsolicited orders that appear unsuitable based on the client’s profile. They must be aware of the objectives and strategies behind each
order accepted on behalf of clients, whether it is solicited or not. They must also take appropriate safeguarding measures when clients insist
on proceeding with unsolicited orders that are unsuitable. Adrian would be violating this guideline if he were to place this order without
researching the company and ensuring that it is suitable for his client.
Reference | Chapter 26: Working with the Retail Client
Learning Domain | Fee-Based Accounts and Working with the Retail Client
5. Which type of exchange-traded fund replicates a reference index?
A. Active ETF.
B. Inverse ETF.
C. Rules-based ETF.
Good choice! D. Standard ETF.
Feedback: Standard ETFs can either replicate an index in full or use sampling to construct an index. Rules-based ETFs do not follow an
index. Active ETF investments vary according to the management style, trading when market conditions and opportunities permit, unlike a
standard ETF that passively follows an index. Inverse ETFs rely on derivatives to achieve the inverse effects they seek.
Reference | Chapter 19: Exchange-Traded Funds
Learning Domain | Exchange-Traded Funds
6. Jeanne has decided to spend three weeks away from her residence in Calgary on a trip to South America. Which type of account should
she consider?
A. A robo-advisor service account.
B. A mutual fund wrap account.
C. A managed account.
Good choice! D. A discretionary account.
Feedback: Discretionary accounts are usually opened for a short period as a matter of convenience for clients who are unwilling or unable to
attend to their own accounts; for example, through illness or absence from the country.
Reference | Chapter 25: Fee-Based Accounts
Learning Domain | Fee-Based Accounts and Working with the Retail Client
7. Which ratio best determines a company’s ability to repay funds it has borrowed?
You chose: A. Interest coverage ratio.
The correct answer is: B. Cash flow-to-total debt outstanding ratio.
C. Working capital ratio.
D. Debt-to-equity ratio.
Feedback: The cash flow-to-total debt outstanding ratio gauges a company’s ability to repay the funds it has borrowed.
Reference | Chapter 14: Company Analysis
Learning Domain | Investment Analysis
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Check: Volume 2 Practice Test 2
Reports
Overall Results
Score: Number
Attempt Questions Correct Your Score
71%
1 100 71 71%
You have passed the test.
https://training.csi.ca/webapps/scor-scormengine-BB644a9e7813968/defaultui/player/modern.html?configuration=ContentId%7C_104469_1%21Cour… 1/32
,2/14/25, 12:12 AM Check Companion
Learning Domain Results
Score: Number
Learning Domain Questions Correct Your Score
71%
The Canadian Marketplace 0 0 0%
Investment Analysis 18 10 56%
Portfolio Analysis 18 14 78%
Mutual Funds 14 12 86%
Exchange-Traded Funds 9 6 67%
Alternative Investments,
Other Managed and
Structured Products 18 11 61%
Canadian Taxation 4 4 100%
Fee-Based Accounts and
Working with the Retail
Client 10 6 60%
Working with the
Institutional Client 9 8 89%
https://training.csi.ca/webapps/scor-scormengine-BB644a9e7813968/defaultui/player/modern.html?configuration=ContentId%7C_104469_1%21Cour… 2/32
,2/14/25, 12:12 AM Check Companion
Question Results
1. During which phase of the life cycle would you expect to find clients with a focus on estate building and wealth transfer?
A. Nearing retirement.
B. Mature earning years.
Good choice! C. Retired.
D. Family commitment years.
Feedback: During the retired phase of the life cycle, clients often want to leave an inheritance for children and grandchildren. Therefore,
many clients at this stage focus on estate building and wealth transfer.
Reference | Chapter 26: Working with the Retail Client
Learning Domain | Fee-Based Accounts and Working with the Retail Client
2. The following conversation happens between an Ontario-licensed mutual fund salesperson and his Ontario-resident client:
“If you purchase XYZ mutual fund shares today, you’ll get the price at today’s close. If you decide to sell them later, the mutual fund will buy
them back. If you’re not ready to do the trade today, call me tomorrow and we’ll give you today’s closing price.”
What unacceptable sales practice occurred in this conversation?
A. He guaranteed the repurchase of securities.
Good choice! B. He backdated a purchase order.
C. He offered his services in the wrong jurisdiction.
D. He promised a future price.
Feedback: The sole unacceptable sales practice here is found in the final statement, “If you’re not ready to do the trade today ...” It is
unlawful for a salesperson to backdate an order in an attempt to buy shares or units at a previous day’s price. Otherwise, all of the
statements are accurate and acceptable. The salesperson states that the fund will buy back the securities, which falls under the right of
redemption that applies to all mutual funds. He correctly identifies the price the investor will receive if they purchase the shares today without
guaranteeing a specific price. And, because the salesperson is licensed in Ontario, he is registered in the province in which he is working.
Reference | Chapter 17: Mutual Funds: Structure and Regulation
Learning Domain | Mutual Funds
3. Which type of withdrawal plan allows an investor to receive annual income from a fund by redeeming a specified percentage of fund
holdings on each withdrawal date?
A. Fixed-dollar withdrawal plan.
B. Life expectancy-adjusted withdrawal plan.
C. Fixed-period withdrawal plan.
Good choice! D. Ratio withdrawal plan.
Feedback: In a ratio withdrawal plan, the investor receives annual income from the fund by redeeming a specified percentage of fund
holdings on each withdrawal date.
Reference | Chapter 18: Mutual Funds: Types and Features
Learning Domain | Mutual Funds
https://training.csi.ca/webapps/scor-scormengine-BB644a9e7813968/defaultui/player/modern.html?configuration=ContentId%7C_104469_1%21Cour… 3/32
, 2/14/25, 12:12 AM Check Companion
4. Adrian, an investment advisor, receives a request from his client to purchase 100,000 shares of LFS Corp. at $20. Adrian is unfamiliar with
LFS, and he and his client have never discussed the possibility of placing orders for securities that Adrian himself has not recommended.
Which prime value would Adrian be compromising if he were to place the order without researching LFS?
A. Professionalism.
B. Confidentiality.
Good choice! C. Duty of care.
D. Compliance.
Feedback: According to the prime value of duty of care, an unsolicited order is an order entered by a client that was not recommended by
the advisor or anyone at the advisor’s firm. In giving advice to clients, advisors must provide appropriate cautionary advice with respect to
unsolicited orders that appear unsuitable based on the client’s profile. They must be aware of the objectives and strategies behind each
order accepted on behalf of clients, whether it is solicited or not. They must also take appropriate safeguarding measures when clients insist
on proceeding with unsolicited orders that are unsuitable. Adrian would be violating this guideline if he were to place this order without
researching the company and ensuring that it is suitable for his client.
Reference | Chapter 26: Working with the Retail Client
Learning Domain | Fee-Based Accounts and Working with the Retail Client
5. Which type of exchange-traded fund replicates a reference index?
A. Active ETF.
B. Inverse ETF.
C. Rules-based ETF.
Good choice! D. Standard ETF.
Feedback: Standard ETFs can either replicate an index in full or use sampling to construct an index. Rules-based ETFs do not follow an
index. Active ETF investments vary according to the management style, trading when market conditions and opportunities permit, unlike a
standard ETF that passively follows an index. Inverse ETFs rely on derivatives to achieve the inverse effects they seek.
Reference | Chapter 19: Exchange-Traded Funds
Learning Domain | Exchange-Traded Funds
6. Jeanne has decided to spend three weeks away from her residence in Calgary on a trip to South America. Which type of account should
she consider?
A. A robo-advisor service account.
B. A mutual fund wrap account.
C. A managed account.
Good choice! D. A discretionary account.
Feedback: Discretionary accounts are usually opened for a short period as a matter of convenience for clients who are unwilling or unable to
attend to their own accounts; for example, through illness or absence from the country.
Reference | Chapter 25: Fee-Based Accounts
Learning Domain | Fee-Based Accounts and Working with the Retail Client
7. Which ratio best determines a company’s ability to repay funds it has borrowed?
You chose: A. Interest coverage ratio.
The correct answer is: B. Cash flow-to-total debt outstanding ratio.
C. Working capital ratio.
D. Debt-to-equity ratio.
Feedback: The cash flow-to-total debt outstanding ratio gauges a company’s ability to repay the funds it has borrowed.
Reference | Chapter 14: Company Analysis
Learning Domain | Investment Analysis
https://training.csi.ca/webapps/scor-scormengine-BB644a9e7813968/defaultui/player/modern.html?configuration=ContentId%7C_104469_1%21Cour… 4/32
