CSC1 Flexible Learning Mode, Reliable CSC1 Exam Test
CSC1 Flexible Learning Mode, Reliable CSC1 Exam Test
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CSI Canadian Securities Course Exam 1 Sample Questions (Q35-Q40):
NEW QUESTION # 35
What is the action that the CentralBank takes to limitthe impact of increased foreign Interestrates on Interest rates in Canada?
- A. Decrease interest rate to balance the risk of rising inflation.
- B. Add a default premium to interest rates to protect lenders.
- C. Reduce Interest rales to reduce demand for borrowing.
- D. increase short-term interest rates to maintain the value of currency.
Answer: D
Explanation:
When foreign interest rates rise, capital may flow out of Canada as investors seek higher returns abroad. To counter this, the Bank of Canada may increase short-term interest rates to make Canadian assets more attractive and maintain the value of the Canadian dollar. This helps stabilize the exchange rate and reduces the risk of imported inflation.
Such actions demonstrate the central bank's role in managing monetary policy to preserve economic stability and maintain currency confidence.
Study Document References:
* Volume 1, Chapter 5:Monetary Policy and the Role of the Bank of Canada.
NEW QUESTION # 36
What bestdescribes the liability of limited partners in a limited partnership?
- A. They are not liable for debts and losses incurred in business operations.
- B. Their liability includes personal assets.
- C. They are liable only to the extent of the daily business activities they participate in.
- D. Their liability is limited to their investment
Answer: D
Explanation:
In a limited partnership, the liability of limited partners is strictly limited to the amount of their investment in the partnership. They do not participate in the day-to-day management or operational decision-making of the partnership. This characteristic ensures that their personal assets are protected beyond their contribution to the partnership.
If limited partners were to engage in the management of the partnership, they could potentially lose their limited liability protection and be treated as general partners, exposing their personal assets to liability.
This concept is foundational in business structures like limited partnerships, allowing investors to contribute capital without risking their personal wealth beyond the agreed investment.
Study Document References:
* Volume 1, Section on Corporations and Financial Structures:This section discusses different forms of business organizations, including partnerships, and highlights the limited liability of investors in structures like limited partnerships.
NEW QUESTION # 37
What is a characteristic of the FTSE Canada Universe Bond Index?
- A. It represents a full cross-section of government and corporate bonds.
- B. It Includes Canadian investment-grade bonds with a term to maturity of one year or less.
- C. It measures the total price return on bonds including realized and unrealized gains
- D. It is an equal-weighted bond Index with each bond representing the same weight within the index.
Answer: A
Explanation:
The FTSE Canada Universe Bond Index represents a comprehensive cross-section of investment-grade government and corporate bonds denominated in Canadian dollars. It includes bonds with a term to maturity of one year or more and excludes high-yield (non-investment-grade) bonds.
* A. It measures the total price return on bonds including realized and unrealized gains: The index does not account for realized gains; it tracks price movements and interest income.
* C. It includes Canadian investment-grade bonds with a term to maturity of one year or less: Bonds in this index must have a term to maturity of at least one year, not less.
* D. It is an equal-weighted bond index with each bond representing the same weight within the index:
The FTSE Canada Universe Bond Index is capitalization-weighted, not equal-weighted.
NEW QUESTION # 38
The Bank of Canada uses anoperating band to help manage the oversight rate. Howwide is the operating Band?
- A. 50 basis points
- B. 25 basis points
- C. 100 basis points.
- D. 75 basis points
Answer: A
Explanation:
The Bank of Canada uses anoperating band of 50 basis pointsto manage the overnight rate. The top of the band is theBank Rate, and the bottom is the rate the Bank pays on settlement balances. The overnight rate typically operates within this band.
* A. 25 basis points: This is too narrow to accommodate monetary operations.
* B. 75 basis points: This is wider than the standard operating band.
* D. 100 basis points: This is incorrect; the operating band is 50 basis points.
NEW QUESTION # 39
What is one key feature of futures?
- A. Both parties to me contract must participate in The future Trade.
- B. Can trade on an exchange or over-the-counter market.
- C. The buyer must pay theseller a feewhen the contract is entered Into.
- D. Parties are unable to offset the contract prior to expiration.
Answer: B
Explanation:
Futures contracts are standardized agreements to buy or sell an asset at a predetermined price on a future date.
They are unique because they can be traded on regulated exchanges, such as the Chicago Mercantile Exchange (CME), or over-the-counter (OTC), where counterparties negotiate terms directly.
This dual trading mechanism ensures flexibility and accessibility for market participants, differentiating futures from other derivatives like forwards, which are typically OTC-only.
Study Document References:
* Volume 1, Chapter 10:Derivatives and Features of Futures, including how they are traded.
NEW QUESTION # 40
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