CSC2 Exam Dumps - CSI Canadian Securities Course Questions and Answers

Investment advisors (IAs) are required to record the names and addresses of all individuals who have requested and received a preliminary prospectus. This ensures compliance with securities regulations and provides a record for follow-ups and potential disclosures related to the offering.

A. The IA must ensure a proxy is mailed: Proxy voting is related to shareholder meetings, not the prospectus distribution.

B. The IA must provide a greensheet: A greensheet is used internally by investment firms, not distributed to clients.

C. The IA must make a tombstone advertisement: Tombstone advertisements are created by the issuer, not the IA.

Standard deviation measures the dispersion or variability of returns around the mean of a portfolio or security ' s historical performance. It is a widely used statistical metric in finance to assess risk, as it captures the degree to which returns can deviate from their expected value. A high standard deviation indicates higher risk, reflecting greater volatility in returns, while a low standard deviation suggests more stable performance.

Beta measures market risk relative to a benchmark, correlation measures the relationship between securities, and alpha represents excess return above a benchmark. However, standard deviation is the most common measure of total risk applicable to portfolios and individual securities.

The approximate price change of a bond due to a change in interest rates can be estimated using the formula:

Price Change (%)=−Duration×ΔInterest Rate\text{Price Change (\%)} = - \text{Duration} \times \Delta \text{Interest Rate} Price Change (%) = −Duration × ΔInterest Rate

Given:

Duration = 5

Current Price = $103

Change in Interest Rate ( Δ\Delta Δ ) = 2% or 0.02

Price Change (%)=−5×0.02=−0.10 (−10%)\text{Price Change (\%)} = -5 \times 0.02 = -0.10 \, (-10\%) Price Change (%) = −5 × 0.02 = −0.10 ( −10% )

The new price is calculated as:

New Price=Current Price×(1+Price Change)=103×(1−0.10)=103×0.90=97.85\text{New Price} = \text{Current Price} \times (1 + \text{Price Change}) = 103 \times (1 - 0.10) = 103 \times 0.90 = 97.85 New Price = Current Price × ( 1 + Price Change ) = 103 × ( 1 − 0.10 ) = 103 × 0.90 = 97.85

A. $108.15 and B. $113.30: These represent price increases, which are incorrect for rising interest rates.

D. $92.70: This reflects a greater-than-actual price drop, which is inconsistent with the duration-based calculation.

Dividends are taxed at a preferential rate in Canada due to the dividend tax credit, which reduces the effective tax rate on dividend income. This is intended to prevent double taxation because corporations have already paid taxes on their profits before distributing dividends to shareholders.

B. Dividends from preferred shares are ineligible for the dividend tax credit: This is incorrect; dividends from both common and preferred shares are eligible for the dividend tax credit.

C. Stock dividends are treated differently than regular cash dividends for tax purposes: Stock dividends are generally taxed similarly to cash dividends.

D. Reinvested dividends are non-taxable to the shareholders: Reinvested dividends are taxable in the year they are earned, even if reinvested.

The price level is one of the most critical factors influencing how much of a product people buy or sell in a marketplace. According to the laws of supply and demand, changes in the price of a product directly affect consumer behavior, where higher prices typically reduce demand, and lower prices increase it.

A business trust typically acquires the operating assets of businesses such as restaurants , which generate predictable and steady cash flows. Business trusts focus on distributing income to unitholders, and restaurant operations align well with this goal due to their recurring revenue models.

Explanation of Options :

A. Senior Housing : More common for real estate investment trusts (REITs), not business trusts.

B. Restaurants : Correct. Restaurants are suitable for business trusts because of their stable cash flow potential.

C. Industrial Rentals : Typically under REITs, not business trusts.

D. Shopping Centres : Also more commonly associated with REITs.