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CIRO RSE Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Know Your Client (KYC), Know Your Product (KYP), and Suitability | 18-22% | - Client information gathering and account opening requirements - Suitability assessment and investment recommendations - Client objectives, risk tolerance, time horizon, and financial circumstances |
| Equities | 18-22% | - Equity markets, trading, and investment strategies - Risks and taxation considerations of equity investments - Equity securities characteristics and valuation |
| Fixed Income Securities | 18-22% | - Bond pricing, yields, duration, and interest rate risk - Fixed income investment strategies and risks - Fixed income products and market characteristics |
| Mutual Funds and Exchange-Traded Funds (ETFs) | 20-24% | - Fund performance evaluation and suitability considerations - Mutual fund structures, features, and fees - ETF structures, trading mechanisms, and characteristics |
| Portfolio Construction and Investment Concepts | 10-14% | - Portfolio risk and return concepts - Asset allocation and diversification principles - Investment strategies and client portfolio management |
| Structured Products | 10-14% | - Types and features of structured products - Benefits, risks, and suitability considerations |
CIRO Retail Securities Sample Questions:
What is a principal purpose of the Black-Litterman model in portfolio construction?
- A. To guarantee that a portfolio will outperform its benchmark
- B. To replace diversification with concentrated stock selection
- C. To calculate a bond's current yield from its coupon and price
- D. To combine market-implied equilibrium returns with the manager's investment views
Correct Answer: D 🗳️
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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. $80
- B. $24
- C. $30
- D. $40
Correct Answer: D 🗳️
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A bond has a face value of $1,000, an annual coupon rate of 5.5% and a current market price of $925. What is the bond's current yield?
- A. 9.25%
- B. 5.50%
- C. 5.95%
- D. 6.49%
Correct Answer: C 🗳️
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A manufacturing company reports annual cost of goods sold of $2,400,000. Its average inventory during the year was $400,000. What is the company's inventory turnover ratio?
- A. 5.0 times
- B. 6.0 times
- C. 4.0 times
- D. 8.0 times
Correct Answer: B 🗳️
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An investor insists on excluding companies with low diversity and inclusion scores from their portfolio. The Registered Representative (RR) identifies that this restriction significantly reduces the number of available investments in the investor's preferred sector. What is the most appropriate action?
- A. Respect the restriction and construct a portfolio with reduced diversification
- B. Override the restriction to ensure adequate diversification and risk management
- C. Exclude the restriction but compensate by increasing exposure to other sectors
- D. Recommend the investor abandon the restriction to access a broader range of investments
Correct Answer: A 🗳️
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