CSC

CSC practice questions, page 3 of 4, with answer review and explanations.

Question 11

What happens if a company’s dividend payout ratio exceeds 100%?

  1. Profits will be reduced.
  2. The company will be unable to repay its debts.
  3. Shareholders’ equity will be eroded.
  4. The share price will increase.

Question 12

Which is a key area of focus when monitoring a client’s portfolio?

  1. Updating the investor’s goals, finances, and preferences.
  2. Setting performance measures.
  3. Implementing the portfolio’s asset mix.
  4. Rebalancing assets back to their target weights.

Question 13

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

  1. The annual client meeting.
  2. When a new market cycle is formed.
  3. When the advisor’s views are influenced by a recent news headline.
  4. When a client’s job situation has changed.

Question 14

How can an investor significantly reduce the non-systematic risk of an equity portfolio?

  1. Invest in securities with a correlation of +1.
  2. Invest in a portfolio with a high standard deviation.
  3. Buy ETF based on the S&P/TSX Composite Index.
  4. Diversify across multiple stocks within a sector.

Question 15

Which macroeconomic factors would have a positive impact on investor expectations and the price of securities?

  1. Targeting certain sectors of the economy with monetary policy measures and tax breaks.
  2. Increased taxes on corporations with the goal of lower government debt.
  3. A decrease in government spending with corresponding tax cuts to individuals.
  4. Low levels of government debt and consumer indebtedness.