CSC1 Exam Dumps : Canadian Securities Course Exam 1

Defined contribution (DC) plans have driven the demand for cost-effective, diversified, and easily tradeable investment products like exchange-traded funds (ETFs). Unlike defined benefit plans, where the employer guarantees payouts, DC plans place the responsibility for investment decisions and risks on individuals, who increasingly opt for ETFs for their low costs and broad market exposure.

A. The rise of financial technology companies: While fintech has contributed to the growth of investment products, it is not a primary driver of ETF usage.

C. The emergence of cryptocurrency: Cryptocurrencies are separate financial products and are not directly tied to the use of ETFs.

D. The popularity of robo-advisors: Robo-advisors use ETFs extensively, but this is a result of their popularity rather than a cause of ETF growth.

When a dealer member fills a client’s order for an unlisted security from its own inventory, the dealer is acting as aprincipal.

A (Alternative trading system)refers to electronic platforms for trading securities.

B (Clearing agent)involves post-trade settlement activities.

C (Over-the-counter agent)is incorrect since the dealer is transacting directly.

References:Volume 1, Chapter 9 ("Principal and Agency Transactions")​.

Aninterest rate forward agreement (FRA)is anover-the-counter (OTC)derivative contract. Unlike exchange-traded derivatives, OTC contracts are not centrally cleared, meaning there is no intermediary to guarantee performance. This increases counterparty (default) risk, making FRAs inherently riskier than exchange-traded contracts.

A. Individual investor buying shares on an exchange during the ex-rights period: This is a standard transaction involving equity securities, not derivatives, and carries no default risk.

C. Exchange-traded equity option contract between an individual investor and a dealer: Exchange-traded derivatives are backed by a clearinghouse, which mitigates default risk.

D. Individual investor entering a futures contract with an institutional investor: Futures contracts are also exchange-traded and centrally cleared, reducing default risk.