CANADIAN SECURITIES COURSE EXAM QUESTIONS
| TESTED AND PROVEN ANSWERS | LATEST
UPDATE 2024/2025 100% (GRADE A+)
What does an Investment Dealer do?
Ans>> Acts as intermediaries between investors and users of capital.
When a Investment Dealer is acting as Primary, what are they doing?
Ans>> Selling securities from their own inventory. Make money via spread/underwriting.
When an investment dealer is acting as agents, what are they doing?
Ans>> Facilitating a trade between a buyer and seller, without owning the security. They
make money via commissions.
What are the three types of Investment dealers?
Ans>> Retail firms, Institutional firms, and Integrated firms.
Give a brief description of retail firms.
Ans>> Includes full service investment dealers and self directed brokers.
1
,Give a brief description of Institutional firms.
Ans>> They serve institutional clients and organizations that trade large volumes like
pension funds.
Give a brief description of Integrated firms.
Ans>> Offer products and services that participate in both retail and institutional
markets. Most firms underwrite debt and equity issues and are active in the secondary
markets.
What are the roles of front, middle, and back offices of an investment dealer firm?
Ans>> Front Office: Portfolio management, Trading, Sales, Marketing.
Middle Office: Compliance, Accounting, Audits, Legal
Back Office: Trade settlement.
What services do investment dealers provide?
2
,Ans>> They provide advice about new issues, They act as market makers, They buy stocks
as principal becoming more competitive in serving their institutional clients, They add
liquidity to secondary markets which enhances the primary markets.
What is a Market Maker
Ans>> A trader that maintains liquidity in securities markets by taking large positions to
enhance liquidity and sooth out price distortions.
What does the Clearing and Depository Services (CDS) do?
Ans>> It clears security transactions daily using a process called netting to establish and
confirm a credit or debit position.
What are the three types of chartered banks?
Ans>> Schedule I,II, & III banks
Describe Schedule I Banks
Ans>> Banks such as TD, RBC. They offer loans, savings and deposits from businesses and
consumers. They also sell mutual funds and other investment options, and mortgages.
3
, Describe Schedule II Banks
Ans>> Such as Citi Canada, AMEX Canada. Are foreign bank subsidiaries, They do
everything schedule I banks do plus commercial loans to business, issue financial paper in
money markets, take deposits for businesses and sell mutual funds and other investments.
Describe Schedule III Banks
Ans>> Such as Deutsche, Comerica. Most are full service foreign bank branches of foreign
banks and accept deposits, not usually lending.
What type of bank has strict ownership rules?
Ans>> Schedule I banks ( a single shareholder cannot own more than 20%).
What is a credit union?
Ans>> They often cater to member-savers from common interest groups and provide
deposit taking services, lending, mortgages, insurance, mutual funds, debt and credit cards.
What role do insurance companies play in the financial markets?
4
| TESTED AND PROVEN ANSWERS | LATEST
UPDATE 2024/2025 100% (GRADE A+)
What does an Investment Dealer do?
Ans>> Acts as intermediaries between investors and users of capital.
When a Investment Dealer is acting as Primary, what are they doing?
Ans>> Selling securities from their own inventory. Make money via spread/underwriting.
When an investment dealer is acting as agents, what are they doing?
Ans>> Facilitating a trade between a buyer and seller, without owning the security. They
make money via commissions.
What are the three types of Investment dealers?
Ans>> Retail firms, Institutional firms, and Integrated firms.
Give a brief description of retail firms.
Ans>> Includes full service investment dealers and self directed brokers.
1
,Give a brief description of Institutional firms.
Ans>> They serve institutional clients and organizations that trade large volumes like
pension funds.
Give a brief description of Integrated firms.
Ans>> Offer products and services that participate in both retail and institutional
markets. Most firms underwrite debt and equity issues and are active in the secondary
markets.
What are the roles of front, middle, and back offices of an investment dealer firm?
Ans>> Front Office: Portfolio management, Trading, Sales, Marketing.
Middle Office: Compliance, Accounting, Audits, Legal
Back Office: Trade settlement.
What services do investment dealers provide?
2
,Ans>> They provide advice about new issues, They act as market makers, They buy stocks
as principal becoming more competitive in serving their institutional clients, They add
liquidity to secondary markets which enhances the primary markets.
What is a Market Maker
Ans>> A trader that maintains liquidity in securities markets by taking large positions to
enhance liquidity and sooth out price distortions.
What does the Clearing and Depository Services (CDS) do?
Ans>> It clears security transactions daily using a process called netting to establish and
confirm a credit or debit position.
What are the three types of chartered banks?
Ans>> Schedule I,II, & III banks
Describe Schedule I Banks
Ans>> Banks such as TD, RBC. They offer loans, savings and deposits from businesses and
consumers. They also sell mutual funds and other investment options, and mortgages.
3
, Describe Schedule II Banks
Ans>> Such as Citi Canada, AMEX Canada. Are foreign bank subsidiaries, They do
everything schedule I banks do plus commercial loans to business, issue financial paper in
money markets, take deposits for businesses and sell mutual funds and other investments.
Describe Schedule III Banks
Ans>> Such as Deutsche, Comerica. Most are full service foreign bank branches of foreign
banks and accept deposits, not usually lending.
What type of bank has strict ownership rules?
Ans>> Schedule I banks ( a single shareholder cannot own more than 20%).
What is a credit union?
Ans>> They often cater to member-savers from common interest groups and provide
deposit taking services, lending, mortgages, insurance, mutual funds, debt and credit cards.
What role do insurance companies play in the financial markets?
4
