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Last Updated: Aug 18, 2026
No. of Questions: 122 Questions & Answers with Testing Engine
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| Section | Weight | Objectives |
|---|---|---|
| Equities | 18-22% | - Equity markets, trading, and investment strategies - Equity securities characteristics and valuation - Risks and taxation considerations of equity investments |
| 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 |
| Fixed Income Securities | 18-22% | - Bond pricing, yields, duration, and interest rate risk - Fixed income investment strategies and risks - Fixed income products and market characteristics |
| Mutual Funds and Exchange-Traded Funds (ETFs) | 20-24% | - ETF structures, trading mechanisms, and characteristics - Mutual fund structures, features, and fees - Fund performance evaluation and suitability considerations |
| Structured Products | 10-14% | - Types and features of structured products - Benefits, risks, and suitability considerations |
| Portfolio Construction and Investment Concepts | 10-14% | - Investment strategies and client portfolio management - Asset allocation and diversification principles - Portfolio risk and return concepts |
1. A company repurchases and cancels 10% of its outstanding common shares. If total net income remains unchanged, what is the most likely immediate mathematical effect?
A) Total corporate earnings automatically increase by 10%
B) Each remaining shareholder's proportional ownership decreases
C) Earnings per share decreases
D) Earnings per share increases
2. A retail client is 25-year-old with a stable income, a high risk profile and has a good understanding of the securities and the securities market. They wish to open an account that allows them to take responsibility for their own investment decisions and allow them to seek growth opportunities in the securities markets. Under account appropriateness rules, which seems most appropriate?
A) A balanced mutual fund account composed of a mix of equities and bonds
B) Direct electronic access (DEA) account
C) An aggressive growth mutual fund to maximize potential returns
D) Order execution only (OEO) account
3. A company is expected to pay a dividend of $2.40 per share next year. Dividends are expected to grow indefinitely at 3% annually, and the investor's required return is 9%. Using the constant-growth dividend discount model, what is the estimated share value?
A) $24
B) $40
C) $30
D) $80
4. 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) 12%
B) 15%
C) 10%
D) 20%
5. A client asks a Registered Representative (RR) to invest the client's money in a private company in which the Representative has an ownership interest. What is the most appropriate action for the Representative to take?
A) Recommend the investment only if it aligns with the client's investment objectives and risk profile
B) Disclose the conflict and seek Investment Dealer approval before proceeding
C) Proceed with the investment with the client's written consent if the client is aware of the RR's ownership interest
D) Decline the transaction and close the client's account
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: B |
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