CSC CX Selection key terms

A person or entity allowed to buy exempt securities without a prospectus, generally because of income, assets, or net worth thresholds set by securities law.

A legal carve-out letting an issuer distribute securities without a full prospectus, subject to conditions such as investor eligibility, disclosure documents, and resale restrictions.

A disclosure document used in some exempt distributions that describes the issuer, its business, the risks, and the terms of the securities being sold.

A body such as a stock exchange or dealer association that writes and enforces rules for its members under authority delegated by securities regulators.

The licensing status a firm or individual must hold to trade securities or give advice, granted after meeting proficiency, capital, and conduct requirements.

The duty to gather and keep current facts about a client's finances, objectives, time horizon, risk tolerance, and knowledge before recommending any investment.

The requirement that a recommendation fit the client's documented circumstances and objectives, and that the rationale be defensible at the time it was made.

A client's willingness and financial ability to accept losses or volatility in pursuit of higher expected returns, usually assessed separately from raw risk capacity.

A legal standard requiring someone to act in another party's best interest, placing the client's interests ahead of the adviser's own.

A situation where an adviser's or firm's own gain, such as a commission or incentive, could improperly influence advice given to a client.

An ongoing commission paid to a dealer or adviser out of a fund's management fee for as long as the client holds the fund.

The annual cost of running a fund, expressed as a percentage of average net assets, including management fees, operating costs, and taxes.

A pooled investment vehicle that sells units to investors and uses the proceeds to buy a diversified portfolio managed according to a stated mandate.

The total value of a fund's assets minus its liabilities, divided by units outstanding to give a per-unit price used for purchases and redemptions.

A fund that raises a fixed amount of capital through an initial offering and then trades on an exchange, often at a premium or discount to net asset value.

A pooled fund whose units trade intraday on an exchange, typically tracking an index and creating or redeeming units to keep price near net asset value.

A lightly regulated pooled vehicle open mainly to eligible investors, using leverage, short selling, and derivatives in pursuit of absolute returns.

Dividing a portfolio among asset classes such as cash, bonds, and equities to balance expected return against risk for a given objective.

Spreading money across investments whose returns do not move in lockstep, reducing the impact of any single holding on total portfolio results.

A measure from -1 to +1 of how closely two investments' returns move together, used to judge how much diversification a combination provides.

A statistical measure of how widely returns vary around their average, commonly used as a gauge of an investment's total volatility.

A measure of how much a security's price tends to move relative to the overall market, where a value above one implies greater sensitivity.

Market-wide risk such as interest rate or recession exposure that cannot be removed by holding more securities, only managed through allocation.

A measure of a bond's price sensitivity to interest rate changes, expressed roughly in years and weighted by the timing of cash flows.

The annualized return an investor earns by holding a bond to maturity, assuming all coupons are reinvested at that same rate.

The fixed percentage of a bond's face value that the issuer promises to pay holders each year as interest until maturity.

An agency's opinion, expressed as a letter grade, of an issuer's ability and willingness to meet its debt obligations on time.

The extra yield a bond offers over a comparable government bond, reflecting the market's view of the issuer's default and liquidity risk.

The chance that a bond or bond portfolio loses value when market interest rates rise, hitting longer-duration securities hardest.

A short-term, highly liquid debt security maturing in one year or less, such as a treasury bill or commercial paper.

A contract giving the buyer the right, but not the obligation, to buy an underlying asset at a set price before a stated expiry date.

A contract giving the buyer the right, but not the obligation, to sell an underlying asset at a set price before a stated expiry date.

The price a buyer pays and a seller receives for an option contract, made up of intrinsic value plus time value.

The amount an option would be worth if exercised immediately, equal to the gap between the strike price and market price when favourable.

The fixed price at which an option holder may buy or sell the underlying asset if the option is exercised.

Using borrowed money or derivatives to control a position larger than the capital committed, which magnifies both gains and losses.

Collateral a client must deposit with a dealer when borrowing to buy securities or when writing options, subject to maintenance requirements.

Selling borrowed securities in the hope of buying them back later at a lower price, profiting from a decline but risking unlimited loss.

An instruction to buy or sell immediately at the best price available, guaranteeing execution but not the price received.

An instruction to trade only at a specified price or better, guaranteeing price if filled but not guaranteeing that a fill occurs.

The gap between the highest price buyers will pay and the lowest price sellers will accept, a key measure of trading liquidity and cost.

An equity security carrying voting rights and a residual claim on earnings and assets after all other obligations are paid.

An equity security that usually pays a fixed dividend and ranks ahead of common shares for dividends and on liquidation, often without voting rights.

A distribution of a company's profits to shareholders, commonly paid in cash and typically declared quarterly for common shares.

The profit realized when an investment is sold for more than its adjusted cost base, taxed differently from interest or dividend income.

The total cost of an investment including purchase price and allowable expenses, used to calculate the capital gain or loss on disposal.

A financial statement listing what a company owns, what it owes, and the owners' residual interest at a single point in time.

A financial statement showing revenues, expenses, and profit or loss over a period, ending with net earnings available to shareholders.

A stock's price divided by its earnings per share, showing how much investors pay for each dollar of profit.

A valuation method that estimates an asset's worth by projecting future cash flows and converting them to present value at a required rate.

The difference between the present value of an investment's expected cash inflows and the cost of making the investment.

The process a company uses to decide which long-term projects or asset purchases to fund, comparing expected returns with cost of capital.

The blended rate a company must earn to satisfy its lenders and shareholders, used as the discount rate in project and valuation analysis.

The recurring pattern of expansion and contraction in economic activity, affecting employment, inflation, interest rates, and asset prices.

A sustained rise in the general level of prices, which erodes purchasing power and influences central bank interest rate decisions.

Actions by a central bank to influence money supply and interest rates, typically aiming to control inflation and support stable economic growth.

Government decisions on taxation and spending that affect total demand, economic growth, and the level of public borrowing.

A graph plotting yields of similar bonds against their maturities, whose shape signals market expectations about rates and growth.

The market where securities are first sold by an issuer to investors, raising new capital through offerings rather than resales.

The market where investors trade securities among themselves after issuance, providing liquidity without raising new money for the issuer.