Canadian Securities (CSC) Test #1 Latest Update 2024-2025 150 Questions and 100% Verified Correct Answers Guaranteed A+ "Know your client" rule - CORRECT ANSWER: salespersons must use diligence to learn essential facts about the client (including every account and order) before entering into the relationship, in order to make appropriate decisions for the client.
Accrued interest - CORRECT ANSWER: Interest that has built up but has not yet been paid. Pay both the stated asking price for the bond + Interest from the previous period.
Stated asking price x [Coupon rate x (term/365)]
After-market stabilization - CORRECT ANSWER: a type of arrangement where the
dealer supports the offer price of a newly issued stock once it begins trading in the secondary market.
Auction market - CORRECT ANSWER: market in which securities are bought and sold
by brokers acting as agents for their clients (stock exchanges).
Authorized shares - CORRECT ANSWER: the maximum number of shares a
corporation may issue as indicated in the corporate charter.
Back office - CORRECT ANSWER: in charge of settlements and clearing.
Bank rate - CORRECT ANSWER: the upper limit of the overnight operating interest rate band.
Banker's Acceptance - CORRECT ANSWER: a short-term commercial draft sold at a
discount (similar to a T-bill).
Bond selling at a discount - CORRECT ANSWER: If bond price is less than $1000.
YTM > Coupon Rate
Bond selling at a premium - CORRECT ANSWER: If bond price is greater than $1000.YTM < Coupon Rate
Bought deal - CORRECT ANSWER: when one dealer buys the entire issue and acts as
a principal. Can take a lower spread (between the dealer's cost and the final selling price).
Bourse de Montreal (Montreal Exchange) - CORRECT ANSWER: where all options and
futures in Canada are traded.
- / 2
Buy-in - CORRECT ANSWER: the obligation to buy back the stock after selling it short.Becomes effective if adequate margin cannot be maintained.
Canada Savings Bonds (CSBs) - CORRECT ANSWER: a type of savings product that
pays a competitive rate of interest and that is guaranteed for one or more years. They may be cashed at any time and, after the first three months, pay interest up to the end of the month prior to being cashed.
Capital and financial account - CORRECT ANSWER: includes the financial flows
between Canadians and foreigners (selling assets or borrowing funds to deal with surplus/deficit).
Capitalization - CORRECT ANSWER: recording an expenditure as an asset rather than an expense so that it can be spread over more than 1 accounting period (placed on the B/S)
CDIC (Canadian Deposit Insurance Corporation) - CORRECT ANSWER: a federal
Crown Corporation providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails.
CIPF (Canadian Investor Protection Fund) - CORRECT ANSWER: a fund that protects
eligible customers in the event of the insolvency of an IIROC dealer member.General acct. = $1M total Separate acct. = $1M each
Coincident indicators - CORRECT ANSWER: change at the same time as the market -
GDP.
Commercial Paper - CORRECT ANSWER: a short-term corporate money market
security.
Common share advantages - CORRECT ANSWER: - Potential for capital appreciation
- Dividends
- Favourable tax rate
- Voting rights
- Limited liability
- Marketability
Competitive bidding - CORRECT ANSWER: a selection process in which suppliers
submit bids to win the buyer's business. The submitted bids are accepted in rising order of yield until the full amount has been allocated.
Competitive tender - CORRECT ANSWER: a distribution method used in particular by the Bank of Canada in distributing new issues of government marketable bonds. Bids are requested from primary distributors and the higher bids are awarded the securities for distribution.
- / 2