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CIRO RSE Exam Syllabus Topics:

SectionWeightObjectives
Structured Products10–14%- Applicable regulatory rules
- Product types and risk profiles
Mutual Funds and ETFs20–24%- Suitability and sales obligations
- Fund structures and disclosure documents
Equities18–22%- Trading mechanics and market structure
- Equity product features and risks
Trade Execution and Market Integrity8–12%- Order routing and best execution
- Prohibited practices and compliance
Fixed Income18–22%- Bond characteristics and pricing
- GICs and other retail fixed-income products
KYC and Suitability20–24%- Client information collection and updates
- Suitability determination and documentation
Portfolio Construction and Managed Accounts10–14%- Registered account types
- Asset allocation and risk metrics
Client Monitoring and Relationship Management8–12%- Performance reporting and CRM2
- Complaint handling procedures

CIRO Retail Securities Sample Questions:

1. A professional holds separate accounts for safe and risky investments and thinks they need to make the risky account less risky, without considering that the safe account is already doing so. Which bias is this?

A) Loss aversion
B) Mental accounting
C) Overconfidence
D) Herd mentality


2. 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) $30
C) $80
D) $40


3. A leveraged ETF seeks to provide twice the daily return of an equity index. The index rises and falls sharply over several trading days but finishes the period near its starting value. Which statement is most accurate?

A) The ETF must also finish near its starting value
B) The ETF eliminates market risk through leverage
C) The ETF must earn exactly twice the index's total multi-day return
D) Daily compounding may cause the ETF's multi-day return to differ substantially from twice the index return


4. In the context of investment services, what does the concept of agency refer to?

A) The automatic execution of transactions without the client's approval
B) The requirement for clients to follow investment advice provided by their Investment Dealer
C) The legal obligation of an Investment Dealer to act on behalf of a client when executing trades
D) The ability of an Investment Dealer to change a client's risk profile based on market conditions


5. Which managed product allows investors to gain intraday diversified exposure with active or passive management?

A) Exchange-traded funds (ETFs)
B) Income trusts
C) Pooled funds
D) Mutual funds


Solutions:

Question # 1
Answer: B
Question # 2
Answer: D
Question # 3
Answer: D
Question # 4
Answer: C
Question # 5
Answer: A

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