1. If inflation is much lower than anticipated, which monetary policy options should the Bank of Canada choose to increase inflation expectations?

2. At a price of $115, an investor purchases $1,000 par-value worth of a 10-year bond with a 10% annual coupon rate exactly three years after its issue. What is the bond’s yield to maturity?

3. What can cause a corporation’s retained earnings to decrease in future years?

4. On January 1st the management of ZZZ Corp announced the payment of a dividend to all shareholders of record as of Thursday January 21st, payable on January 31st. On what date will the shares begin to trade ex-dividend?

5. Nigel owns shares in a non-registered trading account. If he decides to sell the stock after the value of his shares have gone up, Nigel would:

6. A large agriculture firm is concerned that the price of their main crop, soybeans, will decline before the harvest in the fall. To manage this exposure, what should the firm do?

7. Margin accounts are used by several market participants. Select the 2 best options from the list below that represents characteristics of margin accounts?

1. 1. 1. Interest must be paid by the borrower to the dealer
      2. Dealer can only sell the securities on margin with the client’s approval
      3. Margin calls must be covered immediately
      4. Margin reduces market risk for the client

8. Which theory describes the shape of the yield curve by assuming that various market participants have unique preferences when making buying or selling bonds?

9. Which of the following groups act as intermediaries by matching investors with the users of capital?

10. Each of the following assets decreases in value over time after purchase by a company, except: