Online Access Free CIRE Practice Test

A trader expects the price of a stock to rise and wants to use a bullish strategy in options trading.
Which of the following strategies should the trader use?

• A.Buying a put option
• B.Selling a put option
• C.Buying a call option
• D.Selling a call option

An investment advisor for a discretionary account purchased a stock then realized it was not aligned with the client's know-your-client (KYC) documentation. The stock is sold for a small gain. What should the advisor do?

• A.Notify the client and document the error as per firm policy
• B.Reinvest the proceeds in a stock that does align to offset the issue
• C.The incident is reasonable practice with no further action needed
• D.Conceal the error to avoid any reputational damage

Which of the following best defines a retail client under CIRO rules?

• A.An entity that requires full compliance with suitability and disclosure obligations
• B.A government-regulated institution with waived know-your-client (KYC) requirements
• C.A client that must meet strict regulatory criteria to qualify as an investor
• D.An entity registered under securities law as a regulated dealer

A Registered Representative (RR) has delegated the collection of know-your-client (KYC) information to an Investment Representative (IR), who updates it every 12 months. Why does this process fail to meet the RR's regulatory obligations?

• A.The RR should not delegate the collection of KYC information
• B.The RR is not permitted to give investment advice
• C.The IR should update the information every six months
• D.The IR is not permitted to communicate with clients

Hedge fund is required to disclose certain information to investors. What is a key feature of these disclosure requirements in most jurisdictions?

• A.Disclosure of detailed investment strategies to all potential investors
• B.Immediate reporting of daily performance to regulatory bodies
• C.Limited disclosure aimed at accredited or institutional investors
• D.Full public transparency of portfolio holdings