Canadian Securities Course CSC PART 1 Exam Preparation

Explore microeconomics and macroeconomics, the three key decision makers, and the law of demand and supply to illustrate market equilibrium. Assess GDP trends as an indicator of overall economic activity.

Explain GDP measurement in Canada through expenditure and income approaches, including exports, imports, nominal versus real GDP, and growth factors of population, education, and technology.

Explore the Canadian business cycle from expansion to trough and recovery, and analyze leading indicators like the stock market and housing starts alongside lagging indicators such as unemployment.

Identify recessions by depth, diffusion, and duration, including GDP declines, and interpret Canada's labor market indicators such as participation rate, unemployment rate, and the four types of unemployment.

Explore factors affecting interest rates, including capital demand and supply, default risk, central bank credibility, inflation, and exchange rates. See how higher rates curb borrowing, investment, and mortgage costs.

Inflation drives up prices, boosting business profits while eroding consumers' purchasing power. The CPI tracks Canada's inflation, and higher inflation can raise interest rates and slow GDP.

Learn about the different types of inflation, including demand-pull inflation and cost-push inflation, and how disinflation and deflation differ. Explore the sacrifice ratio—the output needed to reduce unemployment.

Explore the balance of payments, focusing on the current account and the capital and financial accounts, and how exports, imports, exchange rates, and currency appreciation shape the economy.

Analyze how the federal budget signals economy through deficits and surpluses, debt-to-GDP effects, and automatic stabilizers, and outline Bank of Canada's roles: monetary policy, financial system, currency, and funds management.

Understand monetary policy tools like money supply management and the bank rate to influence inflation toward 1–3% CPI and GDP, guide savings, fiscal policy through taxes and covid-related spending.

Discover how the Bank of Canada keeps the overnight rate within a 50 basis point band, using open market operations to buy or sell securities and adjust money supply.

Explore fiscal policy, focusing on government spending and taxes managed through the federal budget to stimulate growth and achieve full employment, with Covid responses as context.

Explore cash management operations that influence the target interest rate by adjusting the money supply through drawdown and redeposit with the large value transfer system and the Canadian Payments Association.

Learn how bonds function as fixed income securities—par value, coupons, maturity, and the bond trust deed—and why governments and corporations issue secured or debenture bonds to finance growth and leverage.

Learn how bonds pay coupon income in fixed, floating, step-up, and zero-coupon forms, and how pricing, yields, maturity, denomination, and convertible features affect value.

Explore sinking funds and purchase funds, extendible and retractable bonds, and government, provincial, and municipal bonds, including t-bills and the tax treatment of interest versus capital gains.

Explore corporate bond types—mortgage, collateral trust, floating-rate, equipment trust certificates, subordinated debentures, high-yield, and zero-coupon bonds—and compare domestic, foreign, and euro bonds as fixed income options.

Learn how to read fixed income quotes, including coupon, maturity, par value, bid/ask, and yield to maturity. Assess credit quality using major ratings to choose bonds wisely.

Explore how fixed income securities generate income through semiannual interest and capital gains, and compare prices, yields, and maturities under changing market rates. Consider par, premium, and discount in pricing.

Determine the present value of a 10,000 par value bond with an 8% coupon and a 6% discount rate; discount two semiannual 400 payments plus 10,000 maturity to about 10,191.

Learn to compute present value and future value with a financial calculator, using PV, PMT, FV, and I/Y, including semiannual compounding for bonds and T-bills.

Learn how T-bills are bought at a discount and how to calculate yield using profit over price times 365 days, with 181-day and 90-day examples.

Learn how current yield measures a bond's annual interest relative to its current price, showing how price changes affect yield versus the fixed coupon and aiding comparisons with short-term investments.

Learn how average approximate yield to maturity (atm) adjusts a bond's return when held to maturity, using discount and premium cases to show its relation to current yield and coupon.

Assess reinvestment risk and duration to gauge bond price sensitivity. Learn to use yield, tax brackets, credit, and diversification for strategic switches in fixed income.

Explains bond settlement and accrued interest for semiannual payments. Discusses the yield curve, nominal versus real rates, and theories—expectation, liquidity preference, segmentation—along with buy-sell side roles and markets.

Explore bond pricing principles, including how bond prices move opposite to yields, how longer maturities and lower coupons increase price volatility, and how higher coupons damp price movement.

Explore how common shares offer potential capital appreciation, dividend rights, voting privileges, limited liability, marketability, and favorable tax treatment for dividends and capital gains.

Explore equity securities by examining common and preferred shares, ownership stakes, majority stake concepts, and how share prices rise with company performance, while noting higher risk than fixed-income bonds.

Understand dividends on common and preferred shares, including record and ex-dividend dates, regular and stock dividends, and the dividend reinvestment plan with dollar-cost averaging.

Examine restricted shares and related voting rights, including non-voting and subordinate voting, and learn how stock splits and consolidations affect price, shares, and value.

Explore stock quotes, tickers, daily high/low, close, and volume, and how dividends per share are paid; compare common and preferred shares and the order of payments.

Explore the diverse types of preferred shares, including cumulative, redeemable, retractable, convertible, floating, foreign currency, and straight variants, and understand dividends, tax implications, par value, and market risks.

Explore convertible and other preferred share features, including fixed dividends, higher yields, price volatility tied to common stock, attractable dates, and foreign exchange considerations.

Explore stock indexes like the TSX composite, TSX venture, and TSX 60, and how they track market moves. Understand stock averages versus indexes, and learn market capitalization and float definitions.

Examine long and short stock strategies, including cash buying, buying on margin, and short selling on margin, along with order types. Demonstrate how margin can boost returns, while increasing risk.

Explore how margin accounts pair investor equity with company loans, navigate loan ratios (50/50, 40/60, reduced 70/30) and understand price-based down payments.

Explore the long margin strategy in a margin account, showing initial 50 percent loan, price declines triggering a 40 percent loan, and margin calls to cover shortfalls.

Master short sale mechanics and margin requirements, including loan amounts, minimum credit balances, reduced margins, and margin calls through practical examples.

Explore types of equity orders, including market and limit orders, with duration options like one day, gtc, and date orders, plus all-or-none and stop orders for long and short positions.

Explore derivatives linked to underlying assets, including options (calls and puts), forwards, and futures, and how investors hedge or speculate on price movements.

Explore how derivatives reduce risk through hedging and insurance-like protection, and how call and put options enable holders to buy or sell at fixed prices.

Understand how call and put options work, with holders betting price moves, writers collecting premiums, and terms like strike price, expiration, exercise, assignment, American, European, and leaps.

Learn how call and put options work, including exchange issuance, exercising and offsetting, premium use, and intrinsic and time value, plus in-the-money and out-of-the-money concepts.

Explore how investors use derivatives for market entry and exit, arbitrage, and yield enhancement, using calls and puts to hedge, profit, or generate income.

Learn to write calls and puts, comparing covered, cash-secured, and naked strategies, including obligation to buy or sell at the strike price and the risks involved.

Explore forwards and futures, comparing obligations to deliver with option rights, and learn how delivery, daily marking to market, and margins drive gains and losses for long and short positions.

Explain initial and maintenance margins, margin calls, and how long and short futures positions profit from price movements, or hedge by locking future prices.

Explore warrants versus rights, and learn to calculate intrinsic value and time value for warrant pricing using practical ABC company examples and payoff scenarios.

Explore rights and warrants as equity derivatives, including subscription and discount prices, expiration, intrinsic value calculations, and a practical rights trading example.

Learn how corporate financial statements report a company's health, profitability, ongoing concern status, and future prospects, guiding security selection by analyzing industry trends and economic context.

Learn about the four financial statements, focusing on the statement of financial position, which shows assets, liabilities, and equity on a date and highlights current assets and liquidity.

Fixed assets are non resale items reused in business, such as property and machinery, carried at cost less amortization; assets include inventory valued at cost or market value with FIFO.

Explore FIFO and weighted average inventory costing through an example of hard drives, showing how valuations and ending inventory affect financial reporting.

Examine miscellaneous assets including universal life investments, then apply amortization and depreciation methods—straight-line and declining balance—through fixed assets like machinery, tracking carrying amounts.

Capitalize assets to record expenditures as balance-sheet assets and amortize them over their useful life, covering deferred charges, prepaid versus deferred costs, and intangibles like goodwill.

The lecture explains liabilities, including current and long-term debts, taxes, and payables, and outlines shareholder equity components like share capital and retained earnings.

Explore the comprehensive income statement, tracing revenue, costs, operating and non-operating items, taxes, and net income available to common shareholders, via an ABC year-end example.

Differentiate cash and non-cash items on the statement of comprehensive income and align them with the cash flow outlook, covering net sales, depreciation, and non-operating income.

Match ownership to reporting: less than 20 percent uses cost method, 20–50 percent uses equity, over 50 percent uses consolidation. Includes dividends, equity income, minority interest, and non-cash impacts.

Explore earnings statement components, extraordinary items, and the changes in equity, then analyze cash flow from operating, investing, and financing to assess a company’s liquidity and retained earnings.

Study a sample consolidated balance sheet for a retail store at year-end, detailing assets, equity, and liabilities including property, plant and equipment, inventories, and long-term and current debts.

Explore the consultative statement of comprehensive income at year end, changes in equity, and cash flows to see how revenue, costs, other income, and dividends affect a company's financial position.

Identify the three business structures—sole proprietorship, partnership, and corporations—and explain how they impact liability, management, taxation, and access to capitalization, including underwriting and listing requirements.

Learn how financing and underwriting raise debt or equity through IPOs and government issues, brought to market via competitive tenders, noncompetitive bids, and fiscal agents.

The investment dealer may act as agent or principal, earning commission or spread; private placements use offering memoranda, public offerings use prospectuses, and underwriting involves a lead underwriter and syndicate.

Learn how aftermarket stabilization uses over-allotment and the green shoe option, short selling, penalties for flipping, stabilizing bids, plus listing pros and cons and common trade interruptions.