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CSI CSC2 Exam Questions
- Topic 1: The Canadian Investment Marketplace: This section of the exam measures the skills of a Securities Industry Professional and covers the structure and operation of Canada's investment marketplace. It includes the roles of investment dealers and financial intermediaries, capital market functions, financial instruments, and the complete Canadian regulatory environment with its regulatory bodies, principles of regulation, client remediation options, and ethical standards for financial services professionals.
- Topic 2: The Economy: This section of the exam measures the skills of an Economic Analyst and covers fundamental economic concepts including microeconomics and macroeconomics, economic growth measurement, business cycles, labor markets, interest rates, inflation, international trade, and both fiscal and monetary policy with emphasis on the Bank of Canada's role and government policy challenges.
- Topic 3: Investment Products: This section of the exam measures the skills of an Investment Products Analyst and covers fixed-income securities features, pricing, and trading; equity securities including common and preferred shares; derivatives including options, forwards, futures, rights and warrants; and the characteristics and uses of all these investment instruments in Canadian markets.
- Topic 4: The Corporation: This section of the exam measures the skills of a Corporate Finance Analyst and covers corporate structures, financial statements, disclosure requirements, investor rights, financing methods, capital raising processes, prospectus requirements, securities distribution, and exchange listing procedures for corporations.
- Topic 5: Investment Analysis: This section of the exam measures the skills of a Research Analyst and covers both fundamental and technical analysis methods, including macroeconomic, industry and company analysis techniques, financial statement interpretation, ratio analysis, and security valuation approaches.
- Topic 6: Portfolio Analysis: This section of the exam measures the skills of a Portfolio Manager and covers portfolio management approaches including risk and return measurement, portfolio optimization strategies, management styles, and the complete portfolio management process from objective setting to performance evaluation and rebalancing.
- Topic 7: Analysis of Managed and Structured Products: This section of the exam measures the skills of an Investment Products Specialist and covers mutual funds, exchange-traded funds, alternative investments, structured products, and other managed products including their structures, regulations, features, risks, strategies, performance measurement, and tax implications within the Canadian investment landscape.
- Topic 8: Additional Topics: This section of the exam measures the skills of a Wealth Management Professional and covers Canadian taxation systems, tax-advantaged accounts, fee-based account structures, retail client financial planning and estate planning, institutional client management, and ethical standards for financial advisors serving both individual and institutional clients.
Free CSI CSC2 Exam Actual Questions
Note: Premium Questions for CSC2 were last updated On May. 01, 2026 (see below)
Which type of ETF is also referred to as smart beta ETF?
Rules-based ETFs, also known as smart beta ETFs, use predetermined rules or algorithms to select and weight securities in their portfolios. These ETFs aim to outperform traditional market-capitalization-weighted ETFs by targeting specific factors such as value, momentum, quality, or volatility.
Characteristics of Smart Beta ETFs:
Strategic Factor Weighting: Securities are weighted based on fundamental or quantitative factors, not just market capitalization.
Higher Returns Potential: These ETFs are designed to capture excess returns (alpha) relative to a benchmark.
Lower Costs: Smart beta strategies often combine active and passive management elements at a lower cost than traditional active funds.
Explanation of Options:
A . Rules-based: Correct answer. Smart beta ETFs are built on rule-based frameworks designed to achieve specific investment objectives.
B . Standard: Refers to traditional, market-cap-weighted ETFs, not smart beta.
C . Synthetic: Refers to ETFs that use derivatives to replicate returns of an underlying index, unrelated to smart beta.
D . Index-based: Includes standard ETFs tracking an index but does not apply specifically to smart beta.
CSC Volume 2, Chapter 19: Smart Beta and Rules-Based ETFs, which describes their unique features, benefits, and strategies.
A business trust would typically purchase the underlying company assets of which type of operation?
A business trust typically acquires the operating assets of businesses such as restaurants, which generate predictable and steady cash flows. Business trusts focus on distributing income to unitholders, and restaurant operations align well with this goal due to their recurring revenue models.
Explanation of Options:
A . Senior Housing: More common for real estate investment trusts (REITs), not business trusts.
B . Restaurants: Correct. Restaurants are suitable for business trusts because of their stable cash flow potential.
C . Industrial Rentals: Typically under REITs, not business trusts.
D . Shopping Centres: Also more commonly associated with REITs.
CSC Volume 2, Chapter 22: Business trusts and the types of operations they typically invest in.
What industry stocks tend to have lower betas than the market?
Beta is a measure of a stock's volatility compared to the overall market. Stocks with lower betas tend to experience smaller price fluctuations relative to the market.
Utilities: Utility companies generally have stable and predictable revenue streams because they provide essential services like electricity, water, and gas, which are always in demand regardless of economic cycles. As a result, utility stocks have lower betas, reflecting their lower sensitivity to market movements.
Why Other Options Are Incorrect:
A . Transportation: Stocks in this sector are more sensitive to economic changes and fuel prices, leading to higher betas.
B . Capital Goods: This sector involves investments in industrial equipment and machinery, which fluctuate with economic cycles and have higher betas.
D . Automobiles and Components: This industry is cyclical and highly dependent on economic trends, leading to higher betas.
CSC Volume 2, Chapter 13: Risk and return in specific industries.
If a mutual fund is set up as a corporation, how much of income generated by the fund flows through directly to the shareholders?
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