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CIRO RSE Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Know Your Client (KYC), Know Your Product (KYP), and Suitability | 18-22% | - Client information gathering and account opening requirements - Client objectives, risk tolerance, time horizon, and financial circumstances - Suitability assessment and investment recommendations |
| Topic 2: Portfolio Construction and Investment Concepts | 10-14% | - Asset allocation and diversification principles - Portfolio risk and return concepts - Investment strategies and client portfolio management |
| Topic 3: Fixed Income Securities | 18-22% | - Fixed income investment strategies and risks - Fixed income products and market characteristics - Bond pricing, yields, duration, and interest rate risk |
| Topic 4: Structured Products | 10-14% | - Benefits, risks, and suitability considerations - Types and features of structured products |
| Topic 5: Equities | 18-22% | - Equity securities characteristics and valuation - Equity markets, trading, and investment strategies - Risks and taxation considerations of equity investments |
| Topic 6: Mutual Funds and Exchange-Traded Funds (ETFs) | 20-24% | - Mutual fund structures, features, and fees - ETF structures, trading mechanisms, and characteristics - Fund performance evaluation and suitability considerations |
CIRO Retail Securities Sample Questions:
1. A corporate bond has a coupon rate of 6% and a face value of $10,000. If interest rates in the market rise to
8%, how should an investor adjust their expectations for the bond's annual income compared to selling it today?
A) Expect $800 annually and a sale price at $10,000
B) Expect $600 annually and a sale price above $10,000
C) Expect $600 annually and a sale price below $10,000
D) Expect $800 annually and a sale price below $10,000
2. A Registered Representative (RR) is comparing two companies and correctly calculates their interest coverage ratio as below:
Company A: 1.3
Company B: 1.9
Both the companies have the same interest expense during the period. Which of the following is correct with respect to the two companies?
A) Total Assets of Company B are higher than Total Assets of Company A
B) Earnings before Interest and Tax (EBIT) of Company B is higher than the EBIT of Company A
C) Net Profit Margin % of Company B is higher than Net Profit Margin % of Company A
D) Total Debt of Company B is higher than Total Debt of Company A
3. A client sold a portfolio of stocks and realized a capital gain of $10,000 and a capital loss of $4,000. Under the Canadian capital gains tax system, what is the net taxable amount from these transactions?
A) $6,000
B) $3,000
C) $5,000
D) $10,000
4. An investor requests a portfolio that avoids companies with poor environmental practices but still aims for competitive returns. The Registered Representative (RR) identifies several high-performing companies that do not meet the investor's environmental criteria. What is the most appropriate action?
A) Suggest the investor reconsider their restrictions to allow for higher returns
B) Exclude the companies and build a portfolio that aligns with the investor's personal preference
C) Advise against the restrictions and emphasize the need to maximize portfolio performance
D) Recommend the high-performing companies based on the greater risk-reward trade-off
5. A managed fund earns a gross return of 8.4% before expenses. Its management expense ratio is 1.9%, and its trading expense ratio is 0.3%. Ignoring taxes and compounding, what approximate return remains for investors after these expenses?
A) 5.9%
B) 6.5%
C) 6.2%
D) 8.1%
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: C |


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