Last Updated: Aug 13, 2026
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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Equities | Approximately 10% | - Common and preferred shares - Valuation concepts - Equity markets |
| Topic 2: Investment Recommendations | Approximately 11.7% | - Product selection - Recommendation development - Client communication |
| Topic 3: Fixed Income | Approximately 8.3% | - Credit risk - Government and corporate bonds - Yield and pricing - Interest rate risk |
| Topic 4: Portfolio Construction | Approximately 10.8% | - Asset allocation - Diversification - Portfolio risk management |
| Topic 5: Execution and Market Integrity | Approximately 5.8% | - Order handling - Market integrity rules - Best execution |
| Topic 6: Managed Products and Other Investments | Approximately 13.3% | - Alternative investments - Structured products - Exchange-traded funds (ETFs) - Mutual funds |
| Topic 7: Know-Your-Client (KYC) and Suitability | Approximately 22.5% | - Know-Your-Product (KYP) - Suitability assessment - Regulatory obligations - Client profile collection and maintenance - Investment objectives and risk tolerance |
| Topic 8: Monitoring, Reporting and Maintaining Client Relationships | Approximately 5.8% | - Account monitoring - Ongoing suitability review - Performance reporting - Client relationship management |
| Topic 9: Securities Analysis | Approximately 11.7% | - Financial statement interpretation - Technical analysis - Fundamental analysis |
1. How does asset class selection for an investment portfolio affect liquidity risk?
A) A diversified portfolio with a mix of liquid and illiquid assets helps improve returns while reducing liquidity risk
B) Liquidity risk is specific to fixed-income securities and has little impact on equity investments
C) To avoid liquidity risk, all assets in a portfolio should be short-term and traded on a secondary market
D) Investing in private securities generally provides more liquidity than investing in publicly traded stocks
2. What is the main driver of the intraday price of an exchange-traded fund (ETF)?
A) Liquidity from institutional investors
B) Supply-demand changes on the exchange
C) Daily valuation of assets under management
D) Fund manager's portfolio rebalancing
3. What is the expected return of a portfolio of investments if the risk-free rate is 5%, beta is 2.0, portfolio variance is 15% and market rate of return is 10%?
A) 20%
B) 15%
C) 12%
D) 10%
4. An investor nearing retirement is building a portfolio focused on generating predictable income with lower exposure to market fluctuations. They are considering allocating a portion of their funds to preferred shares.
Based on the investor's objectives, what is the primary advantage of including preferred shares in their portfolio?
A) Preferred shares generally pay fixed dividends, offering more predictable income
B) Preferred shares provide guaranteed returns backed by the issuing company
C) Preferred shares typically offer higher long-term capital gains than common shares
D) Preferred shares give their owners priority in voting decisions, influencing company policy
5. A Registered Representative (RR) meets with an investor seeking a low-risk option for retirement savings.
The Representative considers recommending a bond fund. Which step best ensures compliance with know- your-product (KYP) regarding the bond fund's suitability?
A) Comparing the fund's diversification with similar products in the market
B) Evaluating the fund's marketing materials for clarity on investment objectives
C) Assessing the fund's exposure to interest rate fluctuations and credit risks
D) Reviewing the fund's historical returns to confirm steady performance
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: A | Question # 5 Answer: C |
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