Question 1

As per CIRO policy, what is a required step after receiving an emailed client complaint regardingdissatisfaction with a product?

Options :

A : Acknowledge the complaint in writing

B : Make contact to collect additional information

C : Notify senior management

D : Send a copy of the complaint to CIRO

Answer: A

Question 2

Which of the followings describes segregated funds?

Options :

A : Segregated funds have high returns, high management fees, and cannot be redeemed until the maturitydate of the contract.

B : Segregated funds flow through capital losses to investors because the investors are the owners of theunderlying fund.

C : Segregated funds offer some protection of the capital invested but there is an added cost for theprotection.

D : Segregated funds are subject to securities regulation because they are distributed by mutual funddealing representatives.

Answer: C

Question 3

Ian is 25, employed, and has no dependents. He has no current financial or family obligations. He has askedfor your recommendation for investing a $50,000 inheritance. What asset allocation would typically suit aninvestor with Ian’s characteristics?

Options :

A : 10% in a bond fund, 80% in equity funds, 10% in a money market fund

B : 10% in equity funds, 70% in a bond fund, 20% in a money market fund

C : 35% in equity, 25% in a money market fund, 60% in a bond fund

D : 50% in equity funds, 20% in a bond fund, and 30% in a money market fund

Answer: A

Question 4

Last year, the return on YXY fund was 10.5%. It reported a standard deviation and beta of 6.5% and 1.9,respectively. Over the same period, Treasury bills and 15-year government bonds yielded 2.2% and 4.3%,respectively. What is the fund's Sharpe ratio?

Options :

A : 3.26

B : 0.95

C : 1.28

D : 4.37

Answer: C

Question 5

Your client, Rinaldo, wants to know more about the fees associated with his mutual funds. What can you tellhim about a mutual fund’s management expense ratio (MER)?

Options :

A : Mutual funds are required to calculate the MER on a daily basis.

B : Trailer and brokerage fees are charged separately from the MER.

C : The MER reflects the percentage of each dollar of fund assets that is used to pay for managementservices.

D : Mutual fund performance is not impacted by the MER since rates of return are published net of fees.

Answer: C

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