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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Trade Execution and Market Integrity | 8–12% | - Prohibited practices and compliance - Order routing and best execution |
| Topic 2: Mutual Funds and ETFs | 20–24% | - Suitability and sales obligations - Fund structures and disclosure documents |
| Topic 3: Equities | 18–22% | - Trading mechanics and market structure - Equity product features and risks |
| Topic 4: Client Monitoring and Relationship Management | 8–12% | - Complaint handling procedures - Performance reporting and CRM2 |
| Topic 5: Portfolio Construction and Managed Accounts | 10–14% | - Registered account types - Asset allocation and risk metrics |
| Topic 6: Fixed Income | 18–22% | - Bond characteristics and pricing - GICs and other retail fixed-income products |
| Topic 7: KYC and Suitability | 20–24% | - Suitability determination and documentation - Client information collection and updates |
| Topic 8: Structured Products | 10–14% | - Product types and risk profiles - Applicable regulatory rules |
1. An institutional-sized client order contains 100,000 shares, but the client wants only 5,000 shares displayed publicly at any time to reduce the order's visible market impact. Which order type is most appropriate?
A) Market-on-open order
B) Iceberg order
C) Fill-or-kill order
D) Sell on-stop order
2. What is the main driver of the intraday price of an exchange-traded fund (ETF)?
A) Fund manager's portfolio rebalancing
B) Liquidity from institutional investors
C) Supply-demand changes on the exchange
D) Daily valuation of assets under management
3. Which of the following best describes the type of market data typically provided by an equity exchange such as the Toronto Stock Exchange (TSX)?
A) Only historical pricing data from the previous month
B) Regulatory filings and continuous disclosure reports
C) Only end-of-day summary prices and trading volumes
D) Real-time trade prices, bid-ask spreads and trading volumes
4. A professional holds separate accounts for safe and risky investments and thinks they need to make the risky account less risky, without considering that the safe account is already doing so. Which bias is this?
A) Overconfidence
B) Loss aversion
C) Mental accounting
D) Herd mentality
5. What primary advantage do participating preferred shares provide over straight preferred shares in terms of potential returns?
A) They provide additional dividends when company profits exceed a set threshold, increasing investor returns
B) They offer more predictable dividend payments than common shares, reducing income uncertainty
C) They provide voting rights in corporate decisions, allowing shareholders more influence over management
D) They have the highest claim on assets in case of liquidation, ensuring stronger financial protection
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: A |
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