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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Equities | Approximately 10% | - Valuation concepts - Equity markets - Common and preferred shares |
| Topic 2: Investment Recommendations | Approximately 11.7% | - Recommendation development - Product selection - Client communication |
| Topic 3: Fixed Income | Approximately 8.3% | - Yield and pricing - Interest rate risk - Government and corporate bonds - Credit risk |
| Topic 4: Managed Products and Other Investments | Approximately 13.3% | - Alternative investments - Mutual funds - Exchange-traded funds (ETFs) - Structured products |
| Topic 5: Portfolio Construction | Approximately 10.8% | - Asset allocation - Portfolio risk management - Diversification |
| Topic 6: Execution and Market Integrity | Approximately 5.8% | - Order handling - Best execution - Market integrity rules |
| Topic 7: Securities Analysis | Approximately 11.7% | - Fundamental analysis - Financial statement interpretation - Technical analysis |
| Topic 8: Know-Your-Client (KYC) and Suitability | Approximately 22.5% | - Regulatory obligations - Know-Your-Product (KYP) - Suitability assessment - Client profile collection and maintenance - Investment objectives and risk tolerance |
| Topic 9: Monitoring, Reporting and Maintaining Client Relationships | Approximately 5.8% | - Client relationship management - Account monitoring - Ongoing suitability review - Performance reporting |
1. A portfolio earns 11%. The risk-free rate is 3%, the market return is 8%, and the portfolio beta is 1.2. What is the portfolio's Jensen alpha?
A) 0%
B) 2%
C) #2%
D) 5%
2. What must be calculated when any portion of the money balance in a cash account is overdue by less than 6 business days?
A) The equity deficiency; net weighted security value minus net cash
B) The total trading volume of all securities in the account
C) The gross amount of all securities in the account
D) The total cash balance available in the account
3. Which of the following principles is essential for effective portfolio construction?
A) Allocating funds to investments with highest returns
B) Avoiding an asset allocation strategy to maintain flexibility
C) Diversifying across different asset classes to reduce risk
D) Concentrating investments in a single asset to maximize returns
4. A company had a 9% return on its equity and a net profit margin of 5% for this year. If the company had shareholder equity of $5,000,000, what is the company's total revenue for this year?
A) $10,000,000
B) $11,000,000
C) $9,000,000
D) $7,000,000
5. A Portfolio Manager evaluates a global equity fund focused on large-cap tech stocks in North America, Europe, and Asia, using a broad global bond index as the benchmark. The fund outperformed the benchmark by 4% over the past year. Which statement best reflects the suitability of this benchmark?
A) It is inappropriate because it does not match the fund's investment universe and asset class
B) It is appropriate although it underperformed the fund, since the goal is to beat any market index
C) It should only include North American equities, since most tech companies are based there
D) It is inappropriate because a market risk-free rate should be used instead
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: C | Question # 5 Answer: A |
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