1
Investment Funds in Canada Questions
and Correct Answers
Mutual Fund
Ans✅✅: pool of funds from investors into a variety of securities
What happens when someone invests in a mutual fund?
Ans✅✅: Investor becomes a unit holder and shares in the impact from
gains, losses, expenses etc.
Three Pillars of Registrant Expectations
Ans✅✅: 1. Suitability
2. KYC
3. KYP
Know your client entails:
Ans✅✅: 1. Personal circumstances
2. Financial circumstances
3. investment needs and objectives
4. investment knowledge
5. risk profile
6. time horizon
Types of responsibility
Ans✅✅: - legal
- ethical
- professional
Legal responsibility
Pretest - Stuvia US
,2
Ans✅✅:
Ethical responsibility
Ans✅✅: Investment done in the best interest of the client, putting
the clients needs before my own
Professional responsibility
Ans✅✅: I must provide the best client service possible
Compliance
Ans✅✅: Following the rules, whether that me legal or dealer
Ethical conduct
Ans✅✅:
Ethical responsibility
Ans✅✅:
Legal responsibility
Ans✅✅: Any investment for a client must be suitable client based on
KYC
Source of capital
Ans✅✅: Savings
Equity instruments
Ans✅✅: Buying shares in a company
Auction market
Ans✅✅: Buyers and sellers bidding for shares
Pretest - Stuvia US
,3
Bid price
Ans✅✅: The highest price a buyer is willing to pay
Ask price
Ans✅✅: The minimum a seller is willing to sell at
Dealer market
Ans✅✅: OTC, dealers match trades
Self Regulatory Organization
Ans✅✅: Private industry, regulates own members
What is economics?
Ans✅✅: Understanding the production, distribution and consumption of
goods and services
The Decision Makers of the Economy
Ans✅✅: Consumers
Firms
Government
Market equilibrium
Ans✅✅: The meeting point of a price a buyer is willing to buy at
meets the price a seller is willing to sell at
GDP
Ans✅✅: Total amount of domestic final goods and services produced
Three ways to measure GDP
Pretest - Stuvia US
, 4
Ans✅✅: Expenditure approach
income approach
production approach
Growth in GDP results from:
Ans✅✅: Increase in population
increase in capital stock
improvements in technology
Phases of the business cycle
Ans✅✅: Expansion
Peak
Contraction
Trough
Recovery
Economic Indicators
Ans✅✅: Lead
Lag
Coincidence
Soft landing
Ans✅✅: Growth slows sharply but doesn't become negative
CPI
Ans✅✅: Measure of inflation
Disinflation
Ans✅✅: Decline in the rise of the inflation rate
Sacrifice Ratio
Pretest - Stuvia US
Investment Funds in Canada Questions
and Correct Answers
Mutual Fund
Ans✅✅: pool of funds from investors into a variety of securities
What happens when someone invests in a mutual fund?
Ans✅✅: Investor becomes a unit holder and shares in the impact from
gains, losses, expenses etc.
Three Pillars of Registrant Expectations
Ans✅✅: 1. Suitability
2. KYC
3. KYP
Know your client entails:
Ans✅✅: 1. Personal circumstances
2. Financial circumstances
3. investment needs and objectives
4. investment knowledge
5. risk profile
6. time horizon
Types of responsibility
Ans✅✅: - legal
- ethical
- professional
Legal responsibility
Pretest - Stuvia US
,2
Ans✅✅:
Ethical responsibility
Ans✅✅: Investment done in the best interest of the client, putting
the clients needs before my own
Professional responsibility
Ans✅✅: I must provide the best client service possible
Compliance
Ans✅✅: Following the rules, whether that me legal or dealer
Ethical conduct
Ans✅✅:
Ethical responsibility
Ans✅✅:
Legal responsibility
Ans✅✅: Any investment for a client must be suitable client based on
KYC
Source of capital
Ans✅✅: Savings
Equity instruments
Ans✅✅: Buying shares in a company
Auction market
Ans✅✅: Buyers and sellers bidding for shares
Pretest - Stuvia US
,3
Bid price
Ans✅✅: The highest price a buyer is willing to pay
Ask price
Ans✅✅: The minimum a seller is willing to sell at
Dealer market
Ans✅✅: OTC, dealers match trades
Self Regulatory Organization
Ans✅✅: Private industry, regulates own members
What is economics?
Ans✅✅: Understanding the production, distribution and consumption of
goods and services
The Decision Makers of the Economy
Ans✅✅: Consumers
Firms
Government
Market equilibrium
Ans✅✅: The meeting point of a price a buyer is willing to buy at
meets the price a seller is willing to sell at
GDP
Ans✅✅: Total amount of domestic final goods and services produced
Three ways to measure GDP
Pretest - Stuvia US
, 4
Ans✅✅: Expenditure approach
income approach
production approach
Growth in GDP results from:
Ans✅✅: Increase in population
increase in capital stock
improvements in technology
Phases of the business cycle
Ans✅✅: Expansion
Peak
Contraction
Trough
Recovery
Economic Indicators
Ans✅✅: Lead
Lag
Coincidence
Soft landing
Ans✅✅: Growth slows sharply but doesn't become negative
CPI
Ans✅✅: Measure of inflation
Disinflation
Ans✅✅: Decline in the rise of the inflation rate
Sacrifice Ratio
Pretest - Stuvia US
