CIRO CIRE Dumps Questions Answers

The correct answer is A . Preferred shares generally provide investors with regular or fixed-rate dividend income and rank ahead of common shares for dividend payments and claims on residual corporate assets upon liquidation. CIRO's investment glossary describes a preferred share as providing a fixed dividend payable before dividends to common shareholders, together with a preferred claim on assets if the company is liquidated.

Ontario Securities Commission investor education similarly states that preferred stock generally offers regular income through fixed dividends, that preferred dividends are paid before common-share dividends, and that preferred shareholders have priority over common shareholders if the company is liquidated. This relative priority and greater income orientation may appeal to comparatively risk-averse equity investors.

However, preferred shares are not risk-free . Dividends may be suspended depending on the issuer and share terms, and preferred shareholders rank behind creditors and bondholders in insolvency. Therefore D is incorrect. B is incorrect because preferred shares normally carry limited or no voting rights. C is incorrect because preferred shares generally offer less capital-growth potential than common shares.

The CIRE syllabus specifically requires candidates to understand the features, risks and returns of common and preferred shares .

Study Guide Reference: CIRE Element 7.2 — Equities: common shares and preferred shares; Element 7.3 — advantages and disadvantages of share ownership.

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The correct answer is B . Purchasing a put option is a fundamental bearish options strategy. A put gives its holder the right, but not the obligation, to sell the underlying asset at a specified exercise or strike price during or at the applicable exercise period. CIRO expressly defines a put in these terms and confirms that the underlying asset can include a commodity.

If the commodity price declines materially below the strike price, the put generally increases in economic value because its holder retains the contractual right to sell at the higher strike price. For a purchaser, the maximum direct loss is generally limited to the premium paid, while profit potential increases as the underlying price falls, subject to the strike price, premium, contract specifications and expiry.

A is incorrect because selling a put is normally a bullish-to-neutral strategy: the writer benefits if the underlying remains above the strike price and the option expires worthless. C is also bullish because a long futures position profits from an increase in the underlying futures price and loses when it declines. D, purchasing a call, is a conventional bullish strategy because a call provides the right to buy and generally benefits from increasing underlying prices.

The CIRE syllabus explicitly requires knowledge of puts and calls and of bullish, bearish, neutral, income-producing, spread and volatility strategies.

Study Guide Reference: CIRE Elements 8.1 and 8.6 — Put and Call Options; Bearish Derivative Strategies.

The correct answer is D . A Trusted Contact Person (TCP) is a protective mechanism designed to help an Investment Dealer respond to specified concerns involving a client, particularly possible financial exploitation or concerns about the client's mental capacity to make financial decisions. Current IDPC Rule 3202 requires the Dealer to take reasonable steps to obtain the TCP's name and contact information and the client's written consent permitting contact for prescribed purposes. These include concerns about possible financial exploitation , mental capacity, the identity of a legal representative and the client's current contact information.

CIRO emphasizes that naming a TCP does not transfer authority over the account . The TCP cannot make transactions, make investment decisions or automatically access confidential account information. Instead, the TCP provides a person whom the Dealer is authorized to contact when specified protective concerns arise.

A is therefore incorrect because the TCP does not override the client's decision-making authority. B confuses a TCP with a legal representative or attorney under a power of attorney. C is incorrect because the Dealer does not obtain investment recommendations from the TCP; suitability and investment decisions remain governed by the client relationship and applicable Dealer obligations.

The TCP requirement forms part of CIRO's broader KYC and vulnerable-client protection framework.

Study Guide Reference: CIRE Elements 2.6–2.7 — KYC, third parties and trusted contact persons; IDPC Rule 3202(4).

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