Exam Code: RSE
Exam Name: Retail Securities Exam
Updated: Aug 06, 2026
Q & A: 122 Questions and Answers
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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Equities | Approximately 10% | - Common and preferred shares - Valuation concepts - Equity markets |
| Topic 2: Investment Recommendations | Approximately 11.7% | - Product selection - Recommendation development - Client communication |
| Topic 3: Execution and Market Integrity | Approximately 5.8% | - Best execution - Order handling - Market integrity rules |
| Topic 4: Know-Your-Client (KYC) and Suitability | Approximately 22.5% | - Investment objectives and risk tolerance - Regulatory obligations - Know-Your-Product (KYP) - Client profile collection and maintenance - Suitability assessment |
| Topic 5: Securities Analysis | Approximately 11.7% | - Fundamental analysis - Financial statement interpretation - Technical analysis |
| Topic 6: Managed Products and Other Investments | Approximately 13.3% | - Alternative investments - Exchange-traded funds (ETFs) - Mutual funds - Structured products |
| Topic 7: Fixed Income | Approximately 8.3% | - Government and corporate bonds - Interest rate risk - Yield and pricing - Credit risk |
| Topic 8: Portfolio Construction | Approximately 10.8% | - Asset allocation - Portfolio risk management - Diversification |
| Topic 9: Monitoring, Reporting and Maintaining Client Relationships | Approximately 5.8% | - Ongoing suitability review - Account monitoring - Performance reporting - Client relationship management |
1. When can a temporary hold be placed on a client's account?
A) When a client fails to attend an annual review meeting
B) When a client delays responding to a trade clarification request
C) When the client moves new funds into high-risk products
D) When the client's behaviour indicates exploitation or capacity
2. A company repurchases and cancels 10% of its outstanding common shares. If total net income remains unchanged, what is the most likely immediate mathematical effect?
A) Total corporate earnings automatically increase by 10%
B) Each remaining shareholder's proportional ownership decreases
C) Earnings per share decreases
D) Earnings per share increases
3. A client wants to buy a recreational vehicle costing $25,000 in 3 years. They plan to make deposits of $630 at the start of each month into an investment account. What approximate annualised return is required to achieve their goal?
A) 4%
B) 10%
C) 6%
D) 8%
4. A Registered Representative (RR) is invited to an investment seminar on methods of investment strategy used by the sponsoring fund provider. What is the appropriate action for the RR?
A) Decline the invitation and report the fund provider for inappropriately influencing RRs
B) Decline the invitation because they are marketing activities by asset managers to RRs
C) Accept the invitation since it is industry practice to attend sponsored educational events
D) Accept the invitation and disclose any potential conflicts of interest to the Investment Dealer
5. What primary advantage do participating preferred shares provide over straight preferred shares in terms of potential returns?
A) They offer more predictable dividend payments than common shares, reducing income uncertainty
B) They provide voting rights in corporate decisions, allowing shareholders more influence over management
C) They provide additional dividends when company profits exceed a set threshold, increasing investor returns
D) They have the highest claim on assets in case of liquidation, ensuring stronger financial protection
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: D | Question # 5 Answer: C |
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