PracticeQs_FIN4024_Week#3_RegulatoryEnvironment_STUDENT

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George Brown College Canada *

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2102

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Finance

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Feb 20, 2024

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Winter 2024 Week #3: Chapter 3 Canadian Regulatory Environment Q #1: What is front running? Options: 1. What Donald Trump is doing to Nikki Haley. 2. The dangerous act of running in front of a streetcar. 3. Allocating more shares of a hot new issue to your most profitable customer. 4. Trading one’s own account before effecting the same trade for a client. Q #2: Which of the following organizations plays a key role in co- ordinating and harmonizing regulation of Canadian capital markets. Options: 1. Canadian Dealing Network (CDN). 2. Canadian Securities Administrators (CSA). 3. Securities and Exchange Commission (SEC). 4. Securities Industry Association (SIA). Q #3: Laila has a $150,000 3-year, term deposit with Lincoln Trust and a $75,000 1-year, term deposit at RHW Trust. Both trust companies 1

are member institutions of Canada Deposit Insurance Corporation (CDIC). If both companies become insolvent, what maximum coverage under CDIC rules is Laila entitled to? Options: 1. $225,000. 2. $75,000. 3. $175,000. 4. $100,000. Q #4: Graciela has an account with an investment dealer that has a cash balance of $45,000 and also $1,250,000 in a margin account. The dealer becomes insolvent and declares bankruptcy. Under Canadian Investor Protection Fund (CIPF) guidelines, how much compensation is available to Graciela? Options: 1. $1,000,000. 2. $45,000. 3. $129,000. 4. $1,045,000. Q #5: According to the National Do Not Call List (DNCL) rules, an advisor is prohibited from “cold calling” anyone who has been registered on the DNCL database for longer than how many days? Options: 1. 31 days. 2. 7 days. 3. 60 days. 4. 45 days. Q #6: Which of the following organizations has the primary responsibility for enacting legislation and regulations to control the securities industry? 2

Options: 1. Canadian Investor Protection Fund. 2. Federal Government. 3. Provincial regulators. 4. Office of the Superintendent of Financial Institutions. Q #7: Michel is an investment advisor living and working in Ottawa, Ontario who is about to become licensed. He was recently approached by people living across the Ottawa River in Gatineau, Quebec who would like to become clients. What is Michel required to do if he wants to serve clients in Quebec as well as Ontario? Options: 1. File separate electronic registration forms, through the NRD, for Ontario and Quebec. 2. File a single electronic registration form, through the NRD, for both provinces. 3. File a single registration form, through IIROC, for both provinces. 4. File separate paper-copy registration forms in both Ontario and Quebec. Q #8: Which of the following organizations is responsible for regulating and supervising banks, insurance, trust and loan companies at the national level? Options: 1. The Bank of Canada. 2. The Office of the Inspector General of Canada. 3. The Office of the Superintendent of Financial Institutions. 4. The Treasury Board of Canada. Q #9: Which of the following parties play the role of “gatekeepers” in the securities industry? Options: 1. Dealers. 2. Investors. 3

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3. Reporting Issuers. 4. Front-line employees of dealers. Options: 1. 1. + 4. 2. 1. + 2. 3. 2. + 3. 4. 3. + 4. Q #10: The Self-Regulatory Organizations (SROs) require member firms and their investment advisors to comply with a number of rules. Which of the following are part of these sets of rules? Options: 1. Ensure that a client’s net worth will increase annually. 2. Ensure that orders are placed within the bounds of good business practice. 3. Follow the “suitability principle” for any recommendations they provide to clients. 4. Learn the essential facts relative only to their most valuable clients. Options: 1. 2. + 3. 2. 1. + 2. 3. 1. + 4. 4. 3. + 4. 4

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