2003 Knowledge test

Questions from 2003:Review

1. Which of the following is not a free research service provided to all TD Waterhouse WebBroker clients?

a) Analysts' choice Funds
b) Briefing.com
c) Reuters News & Statistics
d) Zacks Signature Series
e) S&P MarketScope

2. Which combination of characteristics is most correct, in reference to a typical referral client of TD Waterhouse Financial Planning?

1) Clients in the wealth accumulation stage of their life.

2) Clients who have experienced a "life event". (e.g. a Divorce or paid off their mortgage, etc..)

3) Clients with $50,000 with TDBFG and investable assets elsewhere of $50,000 to $300,000 and recognize the need for a financial plan, to guide them to achieve their financial goals..

4) Clients who wish to place a portion of their investment assets with a discretionary manager.

a) 1 & 2 & 3
b) 1 & 3 & 4
c) 2 & 3 & 4
d) All of the choices are applicable.

3. A client calls in complaining that he can't place an order through on WebBroker. Upon investigation, you notice on ISM that he is a US resident.
What is the next step that you take in dealing with the client?

a) Transfer the call to the EBS Helpdesk, as is stated within the CPR procedures.
b) Give the Client the EBS discount, as it's possible an outage had occurred.
c) Tell the client that all EBS products will have the order entry feature disabled, when a TD Waterhouse DB Canada client meets the criteria for being a US resident.
d) All of the Above

4. On Monday, April 1st, a client purchases a 10-year Government Of Canada Bond. Accrued interest would be calculated up until which date?

a) Thursday April 4th
b) Tuesday April 2
c) Monday April 1
d) Friday March 29

5. Which combination of characteristics is most correct, in reference to a typical referral client to the Private Investment Council group?

1) Clients who want to work along with their Portfolio Manager to develop and maintain an investment strategy, but who do not want to be burdened with the day to day investment decisions.

2) Clients with investable assets of over $300,000.

3) Clients who own their own locally run business.

4) Clients who place a portion of their core investment assets with a discretionary manager.

a) 1 & 2 & 4
b) 1 & 2 & 3
c) 2 & 3 & 4
d) 1 & 2 & 3 & 4

6. For a client to be considered a snowbird, what is the maximum amount of time the client is permitted to spend outside of Canada?

a) 184 days
b) 182 days
c) 181 days
d) 183 days

7. A client opens a new margin account, and as his first transaction deposits $1,000,000 CDN (cleared funds) into the account.

How many shares of TD can the client purchase at $37.00 CAD. This stock is eligible for reduced margin.

(Do NOT include the commission)

a) 19,300 shares
b) 38,600 shares
c) 90,090 shares
d) 40,540 shares

8. When a client would like to short sell a US stock but the Loan Post representative says "NO" (uncovered position) to the request, you should:

a) Place this short sell order and put "uncover" on CE line
b) Still place the short sell order
c) The short sale cannot be accepted for the US security
d) None of the Above

9. You hold a stock SHORT and the stock has a margin requirement of 30% and trades over $5.

For each $1 the stock drops how much will the available margin increase by?

a) $0.70
b) $1.30
c) $0.30
d) $1.70

10. Which combination of characteristics is most correct, in reference to a typical referral client of TD Waterhouse Investment Advice?

1) Clients who want a portion of their assets with a discretionary manager.

2) Clients with investable assets of over $300,000.

3) Clients are often Business owners.

4) Clients who want help managing a high net worth portfolio but still want to be involved in the decision making process.

a) 1 & 3 & 4
b) 1 & 3 only
c) 2 & 4 only
d) 2 & 3 & 4

11. Marcella Schwartz has placed a call into TD Waterhouse Discount Brokerage to redeem all of her Fidelity Bond Fund, a No Transaction Fee fund. She just purchased the fund 32 days ago but needs the money for a Home Buyers Plan Withdrawal. Ms Swartz claims that Fidelity has informed her there will not be an early redemption charge.

You inform Ms Schwartz that:

a) TD Waterhouse will not charge early redemption as long as the proceeds are used for a Home Buyers Plan.
b) Fidelity always charges regardless of the information she had been given.
c) TD Waterhouse always enforces a 90 day early redemption charge on all funds except money market
d) She will not be charged an early redemption fee if she places the order through WebBroker.

12. A client is in a $15,000 CDN margin call. How many shares of TD Bank would she have to sell on the NYSE at $22.50 USD to cover the margin call. Assume a USD buy rate of 1.48 and a USD sell rate of 1.46

(Do not include the commission)

a) 1502 shares
b) 1523 shares
c) 2223 shares
d) None of the above

13. Mrs. Johnstone has called you to transfer her remaining cash balance from her account 123457A to 234546E. Account 234546E is in the name of Mr. Clive Bakett.

According to the Client Authentication Process, which one of the following questions would be considered irrelevant?

a) "Mrs. Johnstone, what is the equity balance in your account 123457S?"
b) "Could you please verify the SIN number attached to account 123457A?"
c) "Could you kindly tell me the last transaction to occur in account 123457A?"
d) "Mrs. Johnstone, do you have a cash balance in account 123457A?"

14. What option trades cannot be placed through WebBroker?

a) Open Buys
b) Closing Buys
c) Closing Sells
d) Open Sells uncovered

15. Which of the following statements must be taken into consideration when accepting a buy order in a RRIF account?

a) Is there sufficient cash or near cash investments available to satisfy the annual RRIF payouts?
b) Is the investment the client is buying considered liquid?
c) Does the investment satisfy the client's risk tolerance?
d) All of the above.

16. Does an IR have to be licensed in the province of the client's residence in order to accept Re-Org instructions?

a) No
b) Yes
c) Yes - But only for Quebec Clients

17. What is not a feature of Moneylink?

a) Cheques that are provided can be drawn on trading accounts.
b) Unlimited free withdrawal privileges.
c) Cash card for withdrawals (all cash or up to 90% of available margin-10K max).
d) Branch withdrawals (all cash or up to 90% of available margin-10K max).

18. Bob Miscalina calls into TD Waterhouse Discount Brokerage and would like to place two trades in his RSP account. The first order is to sell 2000 shares of Rochefort Industries, totaling $61,300 USD. The second order is a buy of 3000 shares of Computronix Inc. totaling $64,300 USD.
Which statement below most accurately answers the following question:

How would you handle the FX on this transaction?

a) Since the difference is less than $60K and Sell amount is smaller, CFO both orders with the Sell rate from the FX page and send a FYI wire to FX.
b) Since the difference is less than $60K and Buy amount is larger, CFO both orders with the Sell rate from the FX page and send a FYI wire to FX.
c) Since each order is greater than $60K, you should call FX to book a rate.
d) Since the difference is less than $60K and the Buy amount is larger, CFO both orders with the Buy rate from the FX page and send a FYI wire to the FX Dept.

19. What is the monetary threshold, either imported or exported from other countries, that must be reported to Canada Customs?

a) $10 000 USD
b) $25 000 CAD
c) $50 000 USD
d) $10 000 CAD

20. A client would like to place a trade on a security with a Cease Trade Order in effect for their province of residence.
Of the stipulations below, which would NOT force a provincial regulating body (e.g the OSC) to designate a company with a Cease Trade Order?

a) The stock's price had increased dramatically due to an unexpected move in an underlying commodity price, which they have a greater then 51% market share.
b) The company has not filed their documents with that Provincial Regulator.
c) The company has reported a Material Change but not to the satisfaction of the regulator.
d) A Material Change occured within the firm but has not yet been reported.

21. Of the answers below, Which money market product would not have to be entered through the Money Market Desk? (Assume today is November 12, 2003)

a) $50 000 Province of BC 20-Feb-04 US$ T-BILL
b) $50 000 TD Bank BDN
c) $100 000 Province of Quebec 20-Feb-04 Promissory notes
d) $100 000 GMAC 20-Feb-04 Commercial Paper

22. Which answer most accurately fits the below statement?

It is 3:59 PM EST. A client placed a Buy order for ROX on the TSX at Market. The order was placed through an IR, with the intention of forcing the closing price higher.

a) This is called "McGuffing the Pro"
b) This is called High-Closing.
c) This is called "Selling on the Ask"
d) None of the above answers are accurate.

23. FundBeat is a monthly newsletter that outlines a specific Mutual Fund or Mutual Fund Program.

a) True
b) False

24. What are the benefits of a TD MAP portfolio over individual mutual funds?

1)Ongoing rebalancing so that the portfolio does not drift from the portfolio's set of objectives and risk tolerance
2)Semi-annual performance reports
3)Professional management

a) 1 & 2 & 3
b) 1 & 3 only
c) 2 & 3 only
d) 1 only

25. Mr. Smith is a TDW Discount Brokerage client with account number 324324T. Currently, his only holding is $100,000 in cash.

If Mr. Smith were to invest the entire cash amount into a combination of the following securities, which combination wouldn't be ideal for account 324324T?

1) T-Bills

2) Labour Sponsored Funds

3) Third Party GIC's.

a) 2 & 3
b) 1 & 2
c) 1 & 3
d) 1 & 2 & 3

26. Which group would be responsible for the re-registration of a Provincial Bond Certificate?

a) Receives/Counter and Vault/Depositories Group
b) Voluntary/Mandatory Re-org Group
c) The Re-Registration/Messenger Group
d) The Safekeeping/Special Processing Group

27. Who do we contact to buy/sell State of Israel bonds?

a) Canada-Israel Securities
b) Bond Desk
c) Fixed Income Desk
d) State of Israel Securities

28. Using the Conveyed Industry Knowledge behaviour within the Triple 'S' program, which of the following answers would NOT exceed expectations?

a) Explaining the possible dangers of placing a market order before the market opens.
b) Saying "That trust unit has the potential of continuing on its recent rise for months."
c) Saying "This stock is very thinly traded, it may be challenging to get filled on your remaining odd lot."
d) Explaining settlement dates during exchange holidays.

29. A client is interested in having a private placement or SBIT held in their TD Waterhouse Discount Brokerage account. Of the answers below, whose approval is must be obtained before this request is granted?

a) Senior VP/Retail sales
b) CSM
c) Regional New Issues Coordinator
d) The Manager of the RSP Department

30. Can a client change an Expression of Interest?

a) Yes - but only if it's a Secondary Offering
b) Yes - If the books are open
c) No

31. If Interest rates decreased as a result of government policy, ______________________________.

Using the answers below, which answer would be most correct in completing the above statement.

a) There's no relationship between interest rates and bond prices
b) Bond prices will fall
c) Bond prices will rise
d) Bond prices will remain unchanged

32. How Many Portfolios can a client setup on WebBroker?

a) 5
b) 3
c) 10
d) None of the Above

33. A non-TD client wishes to attend the next seminar on Options presented by guest speaker Mr. John Smith, President of the NYSE Options Exchange. What procedure must an IR follow?

a) Place contact info on RSVP form
b) Advise caller of the $10 guest speaker fee
c) Ask client to open a TDW Discount Brokerage account first
d) Refer him to a BDM

34. A security that is restricted from transfer (i.e. being withdrawn, becoming re-registered, or from being sold) is defined as a Restricted Security.

a) True
b) False

35. WebBroker Select is the name of the service that allows clients to obtain NASDAQ Level 2 quotes.

a) True
b) False

36. You are asked to CFO an order with an "Insider" or "Significant Shareholder" status on it.

Which of the following statements is the correct answer to the above situation?

a) CFO the order as requested and send an 'FYI' wire to Trade Management.
b) Remind the client that it is subject to prior fill.
c) Remind the client that they cannot place an order for that particular security due to their "Insider" status without the consent of their compliance department.
d) Do not CFO the order. Cancel the order and enter a new one.

37. Of the following answers, which is not one of the account threshold limits for orders to be processed via RMA?

a) Buys up to 50k
b) Sells up to 100k,
c) 5 Buy orders and 5 Sell orders
d) 5 Orders total

38. Juliette Forchini has a statement on her SPAD which reads 'NO Caution' on all three of her TD Waterhouse Discount Brokerage accounts.
Ms Forchini has the following recently cleared-fund balances within her three accounts: $7500CDN, $8001CDN, and $9300CDN, respectively. All of her accounts name her as the Beneficial Owner.

For each account, she would like you to place a Buy order for EuroGold Resources, a junior mining company, that trades on the Venture Exchange.

A quick glance at her transaction history, on all three of her accounts, reveals she has made similar trades with recently cleared funds in the last month.

What should be your next course of action?

a) Take the steps needed to fulfill Ms Forchini's request and then immediately inform your Team Manager of the suspicious transactions, after the call.
b) Ask if Ms Forchini would mind being put on hold, then immediately inform your Team Manager of the suspicious transaction before fulfilling Ms Forchini's request.
c) Immediately inform Ms Forchini that her request is considered suspicious and you require your Team Manager's approval prior to fulfilling her request.
d) Put Ms Forchini on hold as you fill out the Unusual Transaction Report Form.

39. Of the following answers, which option would not be available to a client who has not elected either RMA or PS?

a) The ability to Transfer Out
b) To place a trade with a Partner Services Representative
c) Must make an election between RMA or PS
d) Liquidation Trades

40. A President's Account client become eligible for free level 1 and 2 real time market data, when they reach what status?

a) Only Diamond
b) Only Platinum
c) Both Platinum and Diamond level
d) All Levels receive the service for free.

41. Of the following statements, which one is most correct?

a) A RSP plan holder, who is a resident of Manitoba, will receive a RSP Contribution Receipt for contributing 300 shares of MPH on the TSX.
b) A RSP plan holder, who is a resident of Manitoba, will receive a T2ETC tax slip for contributing 300 shares of JZZ.A on the TSX Venture Exchange.
c) A RSP plan holder, who is a resident of Manitoba, will receive a T4RSP tax slip for contributing 300 shares of MPH on the TSX.
d) A RSP plan holder, who is a resident of Manitoba, will receive a T4A tax slip for contributing 300 shares of JZZ.A on the TSX Venture Exchange.

42. Which of the following correctly describes a secondary offering?

a) The public sale of large blocks of previously owned shares via an underwriting syndicate.
b) The company itself selling additional shares of a security that has already been issued to raise capital.
c) An issuance of shares of an existing class of security from the company's treasury to raise capital.
d) When a company goes public for the first time and offers investors participation in the company through share offering.

43. How much commission must a client generate within the previous 12 month period in order to qualify for the Platinum President's Account status and what is the appropriate rebate level they will then receive?

a) $15,000 - $49,999 and 15%
b) $15,000 - $49,999 and 20%
c) $50,000 + and 15%
d) $50,000 + and 20%

44. Which asset listed below, is not eligible to be transferred via the ATON system?

a) Cash
b) Td mutual funds
c) Book based securities trading in Canada
d) Third Party Mutual Funds

45. A client would like to know which funds have made the Analyst's Choice. Where can an IR find that information?

a) Market & Research section on WebBroker
b) Monthly newsletter
c) FundSmart Representative only
d) All of the Above

46. What are the main reason(s) that clients invest in labor-sponsored funds?

a) Governments may offer tax credits for investors who purchase LSVCCs
b) To encourage and support investment in Canadian venture capital companies
c) Increases Foreign Content within an RSP
d) All of the Above

47. You are about to place a switch order from a $CDN Mutual Fund to a $US Mutual Fund, where the amount is greater than $60K US.

What is the procedure you should follow when entering the FX rate?

a) Call down to the FX dept. for a better rate, since the amount is over 60K.
b) Leave the field blank, as the rate will be based on the next business days BUY rate.
c) Not enough information, as it depends on the other transactions that occurred in the account that day.
d) Leave the FX field blank because the rate is auto-assigned

48. How often are Direct Trading clients identified for upgrade to President's account status

a) Annually
b) Only Once.
c) Monthly
d) Quarterly

49. When is a client's 'expression of interest' confirmed filled?

a) Upon placing the Expression of Interest
b) When the status indicates it has been "Allocated" on the New Issues System.
c) When it appears on the Security Positions by Account Screen on or after the settlement date
d) None of the above

50. A non-PA client wants to withdraw $350 US from his US TD Waterhouse Discount Brokerage account and have it picked up at a TD Bank Branch 1928.

What is the amount you should enter on the Cheque Request Form?

a) $345.75
b) $346.75
c) $343.00
d) $343.25
e) $350.00

51. Do you need to be licensed in the appropriate province if you are completing a DRIP for a client?

a) No
b) Yes
c) Yes - But only for Quebec Clients

52. Which of the following is NOT a benefit of eServices?

a) Monthly statements are received by the 1st or 2nd of every month
b) Access to last month's account statement
c) Automatic e-mail notification of trade confirmations
d) E-mail notification of IPOs

53. If the market price of a security opens below the price of an OnStop SELL order, when will the order be executed?

a) The order will be not be executed, as the market price opened below the Onstop price.
b) The order will be executed only if the market price does not rise above the OnStop price before being executed.
c) The order will be executed immediately, as a best efforts market order.
d) The order will be executed only if the stock is trading above $5 and is option eligible.

54. A client holds $185,000 in a portfolio that consists of mutual funds, bonds and some stocks. He and his wife are looking for guidance with regards to future investments. Using the URP, what TD Wealth Management business should you refer this client to?

a) PIC
b) IA
c) PS
d) FP

55. The Settlement symbol, on Starquote, for the NASDAQ 100 options is:

a) NAS on O
b) NDX on O
c) QQQ on A
d) NDS on O

56. Which department in TD Waterhouse works closely with the Corporate Marketing Group to ensure that the CSI survey yields relevant, actionable results.

a) Development & Communications
b) Customer Support Group (CSG)
c) Client Services
d) Customer Satisfaction

57. For the IEX schedule adherence, the target phone time is?

a) 95%
b) 65%
c) 75%
d) 87%
e) 60%

58. Which answer listed below is not considered one of the four stages in the Customer Experience Model?

a) Receiving
b) Escalation
c) Understanding
d) Keeping

59. A client would like to close out 15 contracts, from the above position. What is his change in margin if he requests to close the 15 contracts at the natural?

Starquote has the BMO Oct 42.50 Calls currently at a bid/ask of 4.00 to 4.30.

Starquote has the BMO Sept 42 Puts at 0.05 to 0.15. Both options quotes are obtained from the Montreal exchange.

BMO is trading at $46.30 on the TSX. Use the given quotes in your calculations. Include the commission in your calculation.

a) $17060.00
b) $16665.00
c) $16562.50
d) $17162.50

60. The final step in the cross-selling sales cycle is to 'Ask for the Business'.

a) True
b) False

61. Which office handles ESOP trades for Yahoo inc.?

a) Markham Tower 1
b) Edmonton
c) Montreal
d) Markham Tower 5

62. What is the multiplier for Government of Canada Bond Options?

a) 100
b) 250
c) 200
d) None of the Above

63. A client calls in to place an order but voices his concern over the high cost of commission and is threatening to move his business elsewhere. What alternatives can you offer the client?

I -Inform him about the cheaper EBS commissions
II -Inform the client that there's no commission on New Issues
III - Offer to place the order without commission as a service gesture

a) I, II, III
b) I & III
c) I & II
d) II & III

64. Helmut Schuster, owner of the Golden Wing Diner in Bedford, Ontario, currently has $500 000 in assets with RBC Dominion. After speaking with Mr. Schuster, you get the feeling he may possess very little knowledge of trading, but has expressed the need for someone to help him execute his rigid portfolio goals.

What scenario would best fit Mr. Schusters' investment needs?

a) Explain some basic trading procedures to Mr. Schuster.
b) Use the URP to refer Mr. Schuster to TD Waterhouse Investment Advice.
c) Use the URP to refer Mr. Schuster to TD Waterhouse Financial Planning.
d) Inform Mr. Schuster of our free seminars and information that is available on the TDCT Website, under the 'Investing' Tab.

65. What is the significance of the "E" as the fifth letter in a NASDAQ symbol? (E.g. WCOME)

a) The issue has not met SEC regulations
b) The issue is trading under $0.01
c) The issue trades in the Euro denomination.
d) The issue is 60 days in arrears of paying NASDAQ fee