CSC test 1 study guide(exam practice)
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and 100% solutions(verified by experts)
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1) What describes the ethical barrier that restricts access to non-public information
between different areas of a bank in order to avoid a conflict of interest?
a. Closed-end funds.
b. Segregated funds.
c. Firewalls.
d. Underwriting. - CORRECT ANSWER-C
2) Identify the key role that CDS Clearing and Depository Services Inc. plays in the
Canadian marketplace.
a. Approving initial public offerings (IPOs) of Canadian firms.
b. Daily netting of securities transactions.
c. Centralizing the safekeeping of financial securities.
d. Secure trading among all financial services firms. - CORRECT ANSWER-B
3) Identify the role that an investment firm most likely performs when it completes a sell
transaction from its own inventory of a security that is trading on a listed exchange.
a. Agent.
b. Broker.
c. Principal.
d. Underwriter. - CORRECT ANSWER-C
4) The Cooperative Credit Associations Act sets out guidelines and procedures that
must be adhered to by what type of financial institutions?
a. Credit card companies.
,b. Schedule II banks.
c. Schedule III banks.
d. Credit unions. - CORRECT ANSWER-D
market. What might it do to facilitate this commitment?
a. It could always act as agent in any transaction for that security.
b. It could always act as broker in any transaction for that security.
c. It could hold shares of the security in inventory so there is always some available.
d. It might promise to always buy the security at the ask price. - CORRECT ANSWER-C
6) The front office department of a securities firm most likely focuses on which of the
following aspects of its business?
a. Accounting activities.
b. Compliance activities.
c. Portfolio management activities.
d. Trade settlement activities. - CORRECT ANSWER-C
7) When acting as an agent, what is a broker's profit based on?
a. A flat fee for each transaction.
b. The commission charged for each transaction.
c. An annual fee based on the number of client transactions.
d. The spread on the purchase and eventual sale price for each transaction. -
CORRECT ANSWER-B
8) Identify the department in a large, integrated investment firm that is responsible for
compliance, accounting, audits and legalities.
a. Back office.
b. Middle office.
c. Front office.
d. Management. - CORRECT ANSWER-B
9) Shannon is interested in buying 1,000 shares of Aritzia (ATZ - TSX). The company
first issued shares 1.5 years ago at $16, and now shares are over $17. Indicate how
Shannon can purchase the shares.
a. Directly from the company.
b. From the dealer's IPO allotment.
c. On the secondary market.
d. On the primary market. - CORRECT ANSWER-C
10) Determine the economic scenario where foreign companies will be interested in
borrowing funds from Canada.
a. Canadian interest rates are expected to trend higher over the next year.
b. Access to Canadian capital is lower in cost than access to foreign capital.
c. Canadian international bond ratings are high and are expected to remain there.
d. The Canadian dollar is fluctuating and the investor can make a profit on the spread. -
CORRECT ANSWER-B
, 11) Select the 3 components that result in the effective functioning of the Canadian
securities industry.
a. Banks, pension funds and investment dealers.
b. Financial products, financial markets and financial intermediaries.
c. Banks, trust companies and insurance companies.
d. Federal, provincial and municipal regulators. - CORRECT ANSWER-B
12) The government of a developing country has just announced a new program to
nationalize all oil companies operating within their borders. Determine the likely reaction
of potential investors.
a. Capital flowing into this country will decrease as investors will be worried that other
industries will be nationalized and they will lose their capital.
b. It will likely have little impact as oil companies are most frequently foreign-owned.
c. Investors will increase the amount of capital as government controlled companies
tend to be more profitable.
d. Investors will increase the amount of capital flowing to the country as they will feel
safer due to evidence that the government is effective. - CORRECT ANSWER-A
13) A market maker buys shares of Magna International (MG - TSX), the security that
she makes the market for. Choose what increases as a result of this trade.
a. Investment capital.
b. Market maker's inventory.
c. Direct investment.
d. Number of shares on the market. - CORRECT ANSWER-B
14) Identify a characteristic of a dealer market.
a. Closed-end funds are sold exclusively through this market.
b. Volume of trading is far greater than the equities market.
c. Rights and warrants can be bought and sold through this market.
d. Buyers and sellers enter competitive bids and offers simultaneously. - CORRECT
ANSWER-B
15) Choose the transaction that would occur in a dealer market.
a. Investor purchases 100 preferred shares on the TSX.
b. Investor sells $25,000 of Government of Canada bonds.
c. Investor sells 500 units of a Canadian equity mutual fund.
d. Investor purchases 1,000 common shares on the TSX Venture Exchange. -
CORRECT ANSWER-B
16) Sabrina is offered an investment. It promises to pay $40 a year in income and she
will have her capital returned to her in ten years. This investment is not secured by
anything except the good name of the company. Determine the financial instrument she
is being offered.
a. Bonds.
b. Common shares.
latest update 2025 with 100% questions
and 100% solutions(verified by experts)
graded A+
1) What describes the ethical barrier that restricts access to non-public information
between different areas of a bank in order to avoid a conflict of interest?
a. Closed-end funds.
b. Segregated funds.
c. Firewalls.
d. Underwriting. - CORRECT ANSWER-C
2) Identify the key role that CDS Clearing and Depository Services Inc. plays in the
Canadian marketplace.
a. Approving initial public offerings (IPOs) of Canadian firms.
b. Daily netting of securities transactions.
c. Centralizing the safekeeping of financial securities.
d. Secure trading among all financial services firms. - CORRECT ANSWER-B
3) Identify the role that an investment firm most likely performs when it completes a sell
transaction from its own inventory of a security that is trading on a listed exchange.
a. Agent.
b. Broker.
c. Principal.
d. Underwriter. - CORRECT ANSWER-C
4) The Cooperative Credit Associations Act sets out guidelines and procedures that
must be adhered to by what type of financial institutions?
a. Credit card companies.
,b. Schedule II banks.
c. Schedule III banks.
d. Credit unions. - CORRECT ANSWER-D
market. What might it do to facilitate this commitment?
a. It could always act as agent in any transaction for that security.
b. It could always act as broker in any transaction for that security.
c. It could hold shares of the security in inventory so there is always some available.
d. It might promise to always buy the security at the ask price. - CORRECT ANSWER-C
6) The front office department of a securities firm most likely focuses on which of the
following aspects of its business?
a. Accounting activities.
b. Compliance activities.
c. Portfolio management activities.
d. Trade settlement activities. - CORRECT ANSWER-C
7) When acting as an agent, what is a broker's profit based on?
a. A flat fee for each transaction.
b. The commission charged for each transaction.
c. An annual fee based on the number of client transactions.
d. The spread on the purchase and eventual sale price for each transaction. -
CORRECT ANSWER-B
8) Identify the department in a large, integrated investment firm that is responsible for
compliance, accounting, audits and legalities.
a. Back office.
b. Middle office.
c. Front office.
d. Management. - CORRECT ANSWER-B
9) Shannon is interested in buying 1,000 shares of Aritzia (ATZ - TSX). The company
first issued shares 1.5 years ago at $16, and now shares are over $17. Indicate how
Shannon can purchase the shares.
a. Directly from the company.
b. From the dealer's IPO allotment.
c. On the secondary market.
d. On the primary market. - CORRECT ANSWER-C
10) Determine the economic scenario where foreign companies will be interested in
borrowing funds from Canada.
a. Canadian interest rates are expected to trend higher over the next year.
b. Access to Canadian capital is lower in cost than access to foreign capital.
c. Canadian international bond ratings are high and are expected to remain there.
d. The Canadian dollar is fluctuating and the investor can make a profit on the spread. -
CORRECT ANSWER-B
, 11) Select the 3 components that result in the effective functioning of the Canadian
securities industry.
a. Banks, pension funds and investment dealers.
b. Financial products, financial markets and financial intermediaries.
c. Banks, trust companies and insurance companies.
d. Federal, provincial and municipal regulators. - CORRECT ANSWER-B
12) The government of a developing country has just announced a new program to
nationalize all oil companies operating within their borders. Determine the likely reaction
of potential investors.
a. Capital flowing into this country will decrease as investors will be worried that other
industries will be nationalized and they will lose their capital.
b. It will likely have little impact as oil companies are most frequently foreign-owned.
c. Investors will increase the amount of capital as government controlled companies
tend to be more profitable.
d. Investors will increase the amount of capital flowing to the country as they will feel
safer due to evidence that the government is effective. - CORRECT ANSWER-A
13) A market maker buys shares of Magna International (MG - TSX), the security that
she makes the market for. Choose what increases as a result of this trade.
a. Investment capital.
b. Market maker's inventory.
c. Direct investment.
d. Number of shares on the market. - CORRECT ANSWER-B
14) Identify a characteristic of a dealer market.
a. Closed-end funds are sold exclusively through this market.
b. Volume of trading is far greater than the equities market.
c. Rights and warrants can be bought and sold through this market.
d. Buyers and sellers enter competitive bids and offers simultaneously. - CORRECT
ANSWER-B
15) Choose the transaction that would occur in a dealer market.
a. Investor purchases 100 preferred shares on the TSX.
b. Investor sells $25,000 of Government of Canada bonds.
c. Investor sells 500 units of a Canadian equity mutual fund.
d. Investor purchases 1,000 common shares on the TSX Venture Exchange. -
CORRECT ANSWER-B
16) Sabrina is offered an investment. It promises to pay $40 a year in income and she
will have her capital returned to her in ten years. This investment is not secured by
anything except the good name of the company. Determine the financial instrument she
is being offered.
a. Bonds.
b. Common shares.
