CANADIAN SECURITIES COURSE VOLUME 1 TEST # 1B CHAPTERS 1 – 7 2025 NEWEST VERSION

1. When stock trading takes place on the secondary market… a) an investor is buying shares from the issuing company. b) the issuing company is buying shares from an investor. c) an investor is buying shares from another investor. d) trading in stocks does not take place on the secondary market. 2. Almost all bonds and debentures are sold through… a) auction markets. b) dealer markets. c) Bonds are sold through dealer markets. Debentures are sold through auction markets. d) Bonds are sold through auction markets. Debentures are sold through dealer markets. 3. CDIC insures eligible deposits up to per deposit in each member institution. a) $ 50,000 b) $ 100,000 c) $ 150,000 d) $ 1,000,000 4. What occurs when the Government of Canada’s revenues fail to meet expenditures? a) The Government runs a deficit and it must spend money. b) The Government runs a deficit and it must borrow money. c) The Government runs a surplus and it must raise taxes. d) The Government runs a surplus and it must cut spending. 5. The value of all goods and services produced in a country in a year is known as… a) Net National Product b) Net Domestic Product c) Gross Domestic Product d) Gross National Product 6. “Inflation is stable… Corporate profits are rising and new business start-ups outnumber bankruptcies”… describes which phase of the business cycle? a) peak b) expansion c) contraction d) trough 7. All of the following are major functions of the Bank of Canada except… a) to prepare balanced federal budgets. b) to conduct monetary policy. c) to issue and remove bank notes. d) to act as the government’s fiscal agent. 8. The overnight rate operates within a band of basis points. a) 50 b) 75 c) 100 d) 200 9. A popular definition of a recession is at least… a) two declining quarters of nominal GDP. b) two declining quarters of real GDP. c) four declining quarters of real GDP. d) the same as the Statistics Canada definition: The depth, duration and diffusion of the decline in business activity. 10. In the United States, the Federal Reserve Board is raising interest rates. In order for Fiscal Policy to be consistent with this action, the American government should… a) cut income taxes. b) spend more on higher education. c) spend less on the military and Medicare d) reduce tariffs on Chinese imports. 11. If the yield of a bond is greater than its coupon rate... a) it is trading at a premium. b) it is trading at a discount. c) the investor is losing money. d) the investor is making money.