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CIRO RSE Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Equities | 18-22% | - Equity securities characteristics and valuation - Equity markets, trading, and investment strategies - Risks and taxation considerations of equity investments |
| Structured Products | 10-14% | - Benefits, risks, and suitability considerations - Types and features of structured products |
| Fixed Income Securities | 18-22% | - Fixed income investment strategies and risks - Bond pricing, yields, duration, and interest rate risk - Fixed income products and market characteristics |
| Mutual Funds and Exchange-Traded Funds (ETFs) | 20-24% | - ETF structures, trading mechanisms, and characteristics - Fund performance evaluation and suitability considerations - Mutual fund structures, features, and fees |
| Portfolio Construction and Investment Concepts | 10-14% | - Investment strategies and client portfolio management - Portfolio risk and return concepts - Asset allocation and diversification principles |
| Know Your Client (KYC), Know Your Product (KYP), and Suitability | 18-22% | - Suitability assessment and investment recommendations - Client objectives, risk tolerance, time horizon, and financial circumstances - Client information gathering and account opening requirements |
CIRO Retail Securities Sample Questions:
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. An aggressive growth mutual fund to maximize potential returns
- B. A balanced mutual fund account composed of a mix of equities and bonds
- C. Order execution only (OEO) account
- D. Direct electronic access (DEA) account
Correct Answer: C 🗳️
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Which of the following is a requirement under securities regulations for debt issuers in Canadian debt markets?
- A. Debt issuers must file audited annual financial statements
- B. Debt issuers must maintain capital to at least the value of debt in issue
- C. Debt issuers must include a detailed risk disclosure in their offering documents
- D. Debt issuers must provide timely disclosure of material changes
Correct Answer: D 🗳️
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A client's strategic asset allocation is 60% equities and 40% fixed income. Following a strong equity market, the portfolio becomes 72% equities and 28% fixed income. What action best represents strategic rebalancing?
- A. Leave the portfolio unchanged because rebalancing eliminates growth potential
- B. Purchase additional equities because they have recently performed well
- C. Replace all fixed-income investments with cash
- D. Sell part of the equity allocation and purchase fixed-income investments
Correct Answer: D 🗳️
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A managed fund earns a gross return of 8.4% before expenses. Its management expense ratio is 1.9%, and its trading expense ratio is 0.3%. Ignoring taxes and compounding, what approximate return remains for investors after these expenses?
- A. 6.5%
- B. 8.1%
- C. 5.9%
- D. 6.2%
Correct Answer: D 🗳️
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Which characteristic most clearly distinguishes a conventional closed-end fund from an open-end mutual fund?
- A. Closed-end funds are required to redeem investor units daily at net asset value
- B. Closed-end funds have no management fees or operating expenses
- C. Closed-end funds cannot invest in diversified portfolios
- D. Closed-end fund shares can trade on an exchange at a premium or discount to net asset value
Correct Answer: D 🗳️
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