Free CSC2 Questions for CSI CSC2 Exam

Question #1

A portfolio manager is reviewing the current asset mix of a portfolio. Some securities have done really well, while others have experienced poor returns. How can the portfolio manager rebalance the portfolio to ensure it remains aligned with the client's long-term goals?

A. Reallocate assets back to their target weights by selling securities that have performed well and buying securities that have done poorly.

B. Create cash reserves for future potential investment opportunities by selling securities that have done poorly.

C. Create cash reserves for future potential investment opportunities by selling securities that have performed well.

D. Reallocate assets back to their target weights by buying securities that have performed well and selling securities that have done poorly.

Discussion 0

Correct Answer: A Vote an answer

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Question #2

An investor wants to gain exposure to the Canadian stock market with minimal risk exposure. What is the test financial instrument for this investor?

A. Call option.

B. Index-linked guaranteed investment certificate.

C. Canadian bank preferred shares.

D. Index exchange-trace fund.

Discussion 0

Correct Answer: B Vote an answer

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Question #3

What is a characteristic of a company in a growth industry?

A. Sales and earnings closely match the overall rate of economic growth.

B. Exhibits lower costs of production with increased competition.

C. Generates large cash flows that are paid out in dividends.

D. Has low price-to-earnings ratio and high dividend yield.

Discussion 0

Correct Answer: B Vote an answer

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Question #4

All things being equal and assuming a stable economy, which factor most likely limits the effectiveness of fiscal policy?

A. Level of tax rates.

B. Level of inflation.

C. Level of short-term interest rates.

D. Time required to approve tax legislation.

Discussion 0

Correct Answer: D Vote an answer

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Question #5

Where would the description d a company ' s fixed assets normally be found?

A. In the auditor report

B. In the statement of financial position.

C. In the annual report

D. In the notes to the financial statements

Discussion 0

Correct Answer: D Vote an answer

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Question #6

What is the reason for an individual to use an estate freeze?

A. Reduces asset price volatility

B. Transfer control of the assets.

C. Limit the tax liability for future growth

D. Eliminate probate fees

Discussion 0

Correct Answer: C Vote an answer

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Question #7

Ella has invested her RRSP in a mutual fund where the distributions are automatically reinvested in the same fund. What will be the consequences of these distributions?

A. Ella will be sent a T5 form reporting the types of income distributed that year.

B. Ella will be sent a T3 form reporting the types of income distributed that year.

C. Ella will have more mutual fund units worth less each.

D. Ella's income from distributions will be taxed at her personal rate in the year received.

Discussion 0

Correct Answer: C Vote an answer

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Question #8

What is margin in an equity transaction?

A. interest paid by the client to borrows securities.

B. Good-faith deposit to ensure the client will make future financial obligations

C. Amount paid by a client when he uses credit to buy securities

D. Loan that a dealer extends to a client to buy securities.

Discussion 0

Correct Answer: D Vote an answer

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Question #9

Which ratio gauges a company's ability to repay its debts using funds generated from operating activities?

A. Asset coverage.

B. Debt-to-equity

C. Interest coverage.

D. Cash flow-to-total debt

Discussion 0

Correct Answer: D Vote an answer

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Question #10

For institutional investors, what occurs during the clearing process?

A. Irrevocable exchange of securities and cash.

B. Trade orders are filled at the exchange.

C. Confirming and matching trade details.

D. Matching a buyer with a seller.

Discussion 0

Correct Answer: C Vote an answer

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Question #11

What is the primary difference between industry standards and industry ratios?

A. Industry standards are presented as specific numbers, while industry ratios are presented as a range.

B. Industry standards provide a consistent benchmark over time, while industry ratios change each year.

C. Comparing against industry standards provides more fair and thorough analysis results rather than comparing against the average of the industry.

D. Industry standards change each year, while industry ratios remain relatively static.

Discussion 0

Correct Answer: A Vote an answer

Question #12

Which investor right must be disclosed in a Fund Fact document?

A. Investors have the right to rescind the purchase if these is misrepresentation in the document.

B. Investors have a right to withdrawal from their purchase within 24 hours after confirmation of the purchase is received.

C. Investors have the right to act or claim damages without any limitation.

D. Investors can request a paper copy of the simplified prospectus for a small charge.

Discussion 0

Correct Answer: A Vote an answer

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Question #13

Which individual is most likely to have income as an investment objective?

A. Andrew, who is retired and needs to supplement his retirement pension.

B. Elaine, who is contributing to an RRSP with a plan to use the funds for the Lifelong Learning Plan in seven years.

C. Hira, who is investing in her RRSP in anticipation of retirement in 15 years.

D. Naveed, who plans to use his investments to buy a house in five years.

Discussion 0

Correct Answer: A Vote an answer

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Question #14

Which statutory right allows a purchaser to caned their order if a prospectus has a misrepresentation?

A. Right of withdrawal.

B. Right of amended prospectus delivery

C. Right of rescission.

D. Right of action for damages

Discussion 0

Correct Answer: C Vote an answer

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Free CSC2 Questions for CSI Canadian Securities Course Exam2 CSC2 Exam as PDF & Practice Test Engine

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