csi CSC2 Exam Questions

Questions for the CSC2 were updated on : Nov 21 ,2025

Page 1 out of 13. Viewing questions 1-15 out of 185

Question 1

Kenji is ready to place a large trade in a European small-cap ETF, traded on the TSX. It is 10 a.m. in
Toronto, where Kenji is located. What trading tip can Kenji use to protect his trade from sudden price
movements?

  • A. Place his trade by executing it in small portions at a time.
  • B. Place his trade when a trading halt is issued for any underlying ETF holding.
  • C. Place his trade close to the end of the TSX's regular trading hours.
  • D. Place his trade by using a limit order.
Answer:

D

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Question 2

What risk exists for an investor unable to readily exit a position in an alternative investment near
current prices?

  • A. Default.
  • B. Liquidity.
  • C. Trading.
  • D. Deal breakage.
Answer:

B

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Question 3

What event would trigger an amendment of the account application while monitoring a portfolio?

  • A. When a new market cycle is formed.
  • B. When the advisor's views are influenced by a recent news headline.
  • C. When a client's job situation has changed.
  • D. The annual client meeting.
Answer:

C

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Question 4

Melanie has RRSP contribution room of $17,500 for the current tax year. Her husband, Jack, has RRSP
contribution room of $5,000. What is the maximum tax-deductible contribution Melanie can make to
her RRSP and/or a spousal RRSP?

  • A. $17,500.
  • B. $20,000.
  • C. $5,000.
  • D. $22,500.
Answer:

A

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Question 5

What document must be provided to an investor before they purchase a mutual fund?

  • A. The annual information form.
  • B. A simplified prospectus.
  • C. A Fund Facts document.
  • D. The annual audited statements.
Answer:

C

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Question 6

The following information is available for REW Co:

What is the price of REW Co. if calculated using the dividend discount model?

  • A. $13.75.
  • B. $15.71.
  • C. $12.50.
  • D. $14.29.
Answer:

D

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Question 7

Why are inverse exchange-traded funds effective in declining markets?

  • A. They use physical commodities.
  • B. They use borrowed capital.
  • C. They use active management.
  • D. They use derivatives.
Answer:

D

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Question 8

What is the bottom price of a security's trading range at which most investors would sense value and
be willing to buy it?

  • A. Reversal pattern.
  • B. Sentiment indicator.
  • C. Support level.
  • D. Moving average.
Answer:

C

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Question 9

Which fee is paid to mutual fund sales representatives by the mutual fund manager?

  • A. Redemption.
  • B. Trailer.
  • C. Operating.
  • D. Management.
Answer:

B

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Question 10

For a market capitalization-weighted ETF focused on the S&P/TSX Composite Index, what is likely the
greatest contributor to underperformance relative to the reference index?

  • A. Liquidity.
  • B. Fees.
  • C. Rebalancing.
  • D. Cash drag.
Answer:

D

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Question 11

Supriya, an advisor, receives a research service from a dealer in exchange for placing securities
transactions with that dealer. What statement best applies to this type of arrangement?

  • A. This arrangement is permissible if it benefits Supriya's firm.
  • B. This arrangement can only be used for equity transactions.
  • C. This arrangement needs to be disclosed to Supriya's clients.
  • D. This arrangement violates best execution requirements.
Answer:

C

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Question 12

An advisor wants to explain the benefits of labour sponsored funds (LSVCC) to some of his clients.
With which client should the advisor have this discussion?

  • A. Client 1.
  • B. Client 4.
  • C. Client 2.
  • D. Client 3.
Answer:

A

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Question 13

During which step of the financial planning process should an engagement be formalized with a
professional service contract?

  • A. Implement recommendations.
  • B. Establish the client-advisor relationship.
  • C. Recommend strategies to meet goals.
  • D. Collect data and information.
Answer:

B

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Question 14

For buy-side institutional investors, what is the purpose of algorithmic trading?

  • A. To consolidate a large number of individual trades into a single trade to reduce the market impact.
  • B. To optimize the order execution of small trades.
  • C. To optimize the order execution of a large block of shares by breaking it up into smaller trades.
  • D. To reduce overall trading order execution costs.
Answer:

C

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Question 15

The following table presents annual returns on TUV common stock and the S&P/TSX Composite Index
over a three-year period.

What is TUV's beta relative to the S&P/TSX Composite Index over this three-year period?

  • A. Between 0 and 1.
  • B. Greater than 1.
  • C. Exactly 1.
  • D. Less than 0.
Answer:

C

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