IFSE Institute CIFC Exam With Confidence Using Practice Dumps

Bonds and debentures are both types of debt instruments that can be issued by corporations or governments to raise capital. However, they differ in the way they are secured. Bonds are backed by the specific assets of the issuer, such as property, equipment, or inventory. This means that if the issuer defaults on the bond payments, the bondholders have a claim on those assets and can sell them to recover their money. Debentures, on the other hand, are not secured by any real assets or collateral. They are only backed by the general creditworthiness and reputation of the issuer. This means that if the issuer defaults on the debenture payments, the debenture holders have no recourse to any specific assets and have to rely on the issuer’s ability to pay from its future earnings or liquidation proceeds.

References: Canadian Investment Funds Course, Unit 5, Section 5.1

 Dollar-cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of a security. This strategy can reduce the overall impact of price volatility and lower the average cost per share. By buying regularly in up and down markets, investors buy more shares at lower prices and fewer shares at higher prices. Dollar-cost averaging aims to prevent a poorly timed lump sum investment at a potentially higher price. References: What Is Dollar-Cost Averaging? - Investopedia

Beta is a relative measure that compares how an investment reacts to movements in a specific index. A beta of 1 means that the investment moves in sync with the index. A beta greater than 1 means that the investment is more volatile than the index. A beta less than 1 means that the investment is less volatile than the index. References: Investment Funds in Canada (IFC) | Canadian Securities Institute