Question 1

Which newspaper article would be likely to result in foreign capital moving out of a country?

Options :

A : Corporate Taxes Reduced

B : New Taxes on Foreign Direct Investment

C : Government Re-elected for a Fourth Consecutive Term

D : International Ranking of Domestic Level of Education Rises Significantly

Answer: B

Question 2

Why is it important to include ethical decision-making as a Standard of Conduct?

Options :

A : Ensures conformity with externally established standards.

B : Enables CIRO to regulate the actions and behaviours of registered individuals.

C : Provides flexibility so registrants can use their own judgement.

D : Allows the security industry to operate with the trust and confidence of the public.

Answer: D

Question 3

Recently interest rates have gone up. Your customer, Mr. Corelli, has asked you how this will affect the valueof his mortgage fund. What is the best response to give to Mr. Corelli?

Options :

A : The mortgage fund will not be affected because the rise in interest rates will affect only new mortgages

B : The value of the mortgage fund will go down because new mortgages will pay higher interest thanthose in the fund

C : The mortgage fund will not be affected because mortgages do not react to changes in interest rates theway bonds do

D : The value of the mortgage fund should go up because mortgages will now be earning higher interest

Answer: B

Question 4

When selecting an investment to add to a portfolio, what feature would reduce the overall risk?

Options :

A : High standard deviation

B : High beta

C : Low variance

D : Low alpha

Answer: C

Question 5

You are collecting know your client (KYC) information for your new client, Yael. She has recently acceptedan early retirement package from her employer and has $100,000 to invest. She is looking for an investmentthat will provide income to help pay her ongoing monthly expenses. Without this extra income, she wouldhave trouble paying her bills. From your discussions, Yael understands that markets fluctuate and says she iscomfortable with high risk. Which of the following would be a suitable investment?

Options :

A : global equity fund

B : money market fund

C : mortgage fund

D : Canadian equity index fund

Answer: C

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