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  • 6. Fixed-income Securities: Features And Types
    Learn the basic features and types of fixed-income securities in the Canadian Securities Course. Understand terminology, bond quotes, and ratings.
    • 6.1 Introduction to Fixed-Income Securities
      Discover the essentials of fixed-income securities, their significance in financial markets, and the critical terminologies involved.
    • 6.2 Fixed-income Marketplace
      An in-depth guide on the fixed-income marketplace, the rationale for issuing debt securities, different types of fixed-income securities, their characteristics, issuers, and taxation.
  • 7. Fixed-income Securities: Pricing And Trading
    Introduction to fixed-income securities focusing on bond pricing, yield calculation, term structure, and bond trading within Canadian Securities.
    • 7.1 Introduction
      Learn about the intricacies of fixed-income securities, including risks, rewards, bond yields, pricing, and their relationship with interest rates. Understand the secondary market and factors affecting bond prices.
    • 7.2 Calculating Price And Yield Of Bond
      Understand how to calculate the price and yield of a bond by using the present value method, with examples and detailed steps.
      • 7.2.1 Discount Rate
        In-depth information on the discount rate in bond valuation, its relevance, calculation, and distinction from other rates such as the yield and coupon rate.
      • 7.2.2 Calculating Fair Price Of Bond
        Learn how to calculate the fair price of a bond through present value calculations. This guide offers step-by-step instructions and formulas to determine the value of a bond's principal and coupon payments.
      • 7.2.3 Calculating Yield On Treasury Bill
        Learn how to calculate the yield on a Treasury Bill (T-bill) which trades at a discount and matures at par. This guide provides the formula, detailed explanations, and an example calculation.
      • 7.2.4 Calculating Current Yield On Bond
        Learn how to calculate the current yield on a bond using a simple formula, as well as understand its practical applications.
      • 7.2.5 Calculating Yield To Maturity On Bond
        Learn how to calculate yield to maturity on bonds, understand its significance, and explore detailed procedures with examples and formulas.
    • 7.3 Term Structure Of Interest Rates
      Understand the factors influencing the term structure of interest rates and the shape of the yield curve through market forces, theories, and key economic concepts.
      • 7.3.1 Real Rate Of Return
        Understand the components and determinants of the real rate of return, how it interacts with the nominal rate, and its implications for investors and businesses in the context of Canadian Securities Course certification.
      • 7.3.2 Yield Curve
        Understand the significance of the yield curve in bond markets, including the key theories explaining its shape: expectations theory, liquidity preference theory, and market segmentation theory.
    • 7.4 Fundamental Bond Pricing Properties
      Explore the fundamental properties of bond pricing and understand how factors like interest rates, maturity, coupon rates, and yield affect bond prices. Learn essential calculations and the use of financial calculators for accurate pricing.
      • 7.4.1 Relationship Between Bond Prices And Interest Rates
        Understand the intricate relationship between bond prices and interest rates, including how bond yields are impacted and examples with calculations. Learn to master bond investment strategies in varying interest rate environments.
      • 7.4.2 Impact Of Maturity
        Explore the impact of bond maturity on price volatility, illustrating why longer-term bonds are more volatile than shorter-term bonds. Learn with examples and detailed tables.
      • 7.4.3 Impact Of Coupon
        Explore the nuances of how coupon rates affect bond price volatility with detailed explanations, FAQs, formulas, charts, and a comprehensive glossary of terms.
      • 7.4.4 Impact Of Yield Changes
        Understand the relative impact of yield changes on bond pricing. This section details how percentage changes in yield affect bond prices more significantly when rates are lower and explains the asymmetrical effects of yield increases and decreases.
      • 7.4.5 Duration As Measure Of Bond Price Volatility
        Understand duration as a measure of bond price volatility, and how it can help investors make informed decisions. Delve into bond value changes, interest rate impacts, coupon rates, and time to maturity factors. Includes examples, table analyses, and further reading references.
    • 7.5 Bond Market Trading
      Comprehensive guide on how bond trading is conducted, detailing operations in the sell side and the buy side.
      • 7.5.1 Sell Side
        Understand the sell side of fixed-income trading, including the roles of investment bankers, traders, and sales representatives. Learn about their responsibilities and how they contribute to the financial markets.
      • 7.5.2 Buy Side
        Understanding the buy side of fixed-income trading, focusing on portfolio managers, traders, and the institutional clients they serve.
      • 7.5.3 Buying Bonds Through Investment Dealer
        Explore the intricate process of buying bonds through an investment dealer, covering both large institutional and smaller firms, role of inter-dealer brokers, and essential techniques for efficient bond trading.
      • 7.5.4 Mechanics Of Trade
        Learn the comprehensive mechanics of non-electronic securities trade, including trade tickets, clearing and settlement, calculating accrued interest, and understanding bond indexes as described in the Canadian Securities Course.
  • 8. Equity Securities: Common And Preferred Shares
    Learn about the key features, benefits, and risks associated with equity securities, including common and preferred shares. This section covers the nuances and impacts of stock processes and the relevance of various stock indexes.
    • 8.1 Introduction
      An introduction to equity securities with a focus on common shares, comparing their long-term performance against bonds and inflation.
    • 8.2 Common Shares
      Comprehensive guide to common shares, covering features, benefits, risks, stock splits, consolidations, key terms, and more for the Canadian Securities Course.
      • 8.2.1 Benefits And Risks Of Common Share Ownership
        Understanding the benefits and risks of common share ownership is crucial for investors seeking to maximize returns and minimize risks. This guide explores key aspects such as capital appreciation, voting privileges, and limited liability, alongside potential risks like market volatility and dividend uncertainty.
      • 8.2.2 Capital Appreciation
        Understand the concept of capital appreciation in the context of common shares, and how it impacts investors' decisions.
      • 8.2.3 Dividends
        Explore the essential details about dividends in equity securities, including dividend policy, payment methods, ex-dividend dates, dividend reinvestment plans, and stock dividends.
      • 8.2.4 Voting Privileges
        This guide explores the rights of shareholders in the context of voting privileges, focusing on various types of shares, including restricted shares, and their impact on shareholders' participation in corporate governance.
      • 8.2.5 Stock Splits And Consolidations
        Understand the basics and strategic importance of stock splits and reverse stock splits (consolidations) for publicly-traded companies. Learn how these actions can influence share prices and investor perception.
      • 8.2.6 Reading Stock Quotations
        Learn how to read and interpret stock quotations for listed and unlisted stocks traded on stock exchanges and over-the-counter (OTC) market.
    • 8.3 Preferred Shares
      Explore the features and benefits of preferred shares, understand different types of preferred shares, and learn how to differentiate among them.
      • 8.3.1 Preferred Shareholder’s Claim To Assets
        Understanding the preferred shareholder's claim to assets, their priority status over common shares in the event of bankruptcy, and their entitlement to fixed dividend payments.
      • 8.3.10 Other Types Of Preferred Shares
        Learn about the various less common types of preferred shares such as participating preferred shares and deferred preferred shares, including their features, advantages, and practical applications in investment strategies.
      • 8.3.2 Why Companies Issue Preferred Shares
        In-depth exploration of why companies issue preferred shares as opposed to debt or common shares, evaluating the benefits and considerations involved.
      • 8.3.3 Why Investors Buy Preferred Shares
        This section explores the reasons why investors, including both individual and institutional investors, buy preferred shares, highlighting benefits such as dividend tax credits and preferential tax treatment.
      • 8.3.4 Preferred Share Features
        Learn about the key features of preferred shares including cumulative and non-cumulative features, callable and non-callable features, voting privileges, and special funds like purchase and sinking funds.
      • 8.3.5 Straight Preferred Shares
        Learn about Straight Preferred Shares, their features, market behavior, and benefits for investors. Explore an example to understand yield dynamics.
      • 8.3.6 Convertible Preferred Shares
        An in-depth guide to understanding convertible preferred shares, their characteristics, benefits, and how they differ from straight preferred shares.
      • 8.3.7 Retractable Preferred Shares
        Learn all about Retractable Preferred Shares, their characteristics, and examples. Understand key features that affect their value and how they compare to other financial instruments in volatile market conditions.
      • 8.3.8 Floating-rate Preferred Shares
        A comprehensive guide to understanding floating-rate preferred shares, including their market conditions, examples, characteristics, and implications for buyers.
      • 8.3.9 Foreign-pay Preferred Shares
        Learn about the structure, benefits, and risks of foreign-pay preferred shares issued by Canadian companies, along with an illustrative example.
    • 8.4 Stock Indexes And Averages
      Learn about the important stock indexes and averages, their purposes, calculations, and key differences with examples.
      • 8.4.1 Canadian Market Indexes
        Comprehensive guide on Canadian Market Indexes including details on S&P/TSX Composite Index, S&P/TSX 60 Index, and S&P/TSX Venture Composite Index.
      • 8.4.2 U.S. Stock Market Indexes
        An in-depth overview of major U.S. stock market indexes, including the Dow Jones Industrial Average and the S&P 500. Detailed explanations of their composition, calculations, and their usage as market performance indicators.
      • 8.4.3 Other U.S. Stock Market Indexes
        An in-depth guide covering various significant U.S. stock market indexes including NYSE Composite, NYSE American, NASDAQ Composite Index, and Value Line Composite Index.
      • 8.4.4 International Market Indexes And Averages
        This section provides a comprehensive understanding of various international market indexes and averages, which are crucial for investors looking to diversify their portfolios globally.
    • 8.5 Summary
      An in-depth look at key concepts of common and preferred shares, including their benefits, rights, and different types.
  • 9. Equity Securities: Equity Transactions
    An introduction to equity transactions, covering the distinctions between cash accounts and margin accounts, long and short positions, margin account transactions, and trading and settlement procedures.
    • 9.1 Introduction
      Understand the mechanical processes involved in acquiring, holding, and selling investments including equity transactions such as margin trading, short selling, and the variety of buy and sell orders investors use to trade stocks.
    • 9.2 Cash Accounts And Margin Accounts
      In this section, we delve into the fundamental differences between cash accounts and margin accounts in securities transactions, clarifying how each operates and the key considerations for investors.
      • 9.2.1 Long Positions And Short Positions
        Explore the fundamental concepts of long and short positions in the stock market, including detailed examples and guidance for Canadian Securities Course exam preparation.
    • 9.3 Margin Account Transactions
      Learn about margin accounts used for long and short margin positions, how to interpret the impact of price changes, and the process involving interest calculations on margin loans.
      • 9.3.1 Long Margin Accounts
        A comprehensive guide to understanding long margin accounts, including regulations, examples, risks, and frequently asked questions as per IIROC guidelines.
      • 9.3.2 Short Margin Accounts
        Comprehensive guide to short margin accounts including definitions, examples, and margin requirements. Learn about short selling, its risks, profit calculations, and industry practices.
      • 9.3.3 Risks Of Short Selling
        Understanding the various risks associated with short selling, including borrowing shares, maintaining adequate margin, liability for dividends, buy-in requirements, volatile price action, and regulatory risk.
    • 9.4 Trading And Settlement Procedures
      Comprehensive overview of trading and settlement procedures for equity transactions, focusing on the roles of investment dealers, trade lifecycle, settlement timelines, and best practices.
      • 9.4.1 Trading Procedures
        Detailed guide covering the trading procedures within the Canadian Securities Market, including the steps involved in retail securities transactions, and settlement procedures. Discover important concepts, detailed steps, and common scenarios in trading stocks, bonds, options, and other securities.
    • 9.5 How Securities Are Bought And Sold
      Understanding how securities are bought and sold is fundamental for acting as a proficient investment advisor. This section provides a comprehensive overview of various types of buy and sell orders, price restrictions, special instructions, and the dynamics of the bid-ask spread.
      • 9.5.1 Types Of Orders
        Comprehensive guide to different types of stock orders including market, limit, day, good-through, on-stop sell, on-stop buy, and professional types.
    • 9.6 Summary
      A comprehensive summary of the key concepts covered in chapter 9.6 of the Canadian Securities Course, focusing on equity transactions, client account types, margin positions, and types of buy and sell orders.
  • 10. Derivatives
    Discover the essentials of derivatives in this Canadian Securities Course chapter. Understand the role and types of derivatives, underlying assets, and market participants.
    • 10.1 Introduction
      Explore the phenomenal growth and intricacies of various derivative instruments. Learn about the impact of market volatility, financial deregulation, and advances in technology on derivatives. Understand the role of derivatives in portfolios for institutional and retail investors.
    • 10.2 Role Of Derivatives
      Understand the significant role derivatives play in financial markets, their classification, uses, and the differences between over-the-counter and exchange-traded derivatives.
      • 10.2.1 Features Common To All Derivatives
        Explore the fundamental features common to all derivatives, including contractual agreements, pricing, expiration dates, and the zero-sum nature. Understand the essentials of forwards and options in derivative trading.
      • 10.2.2 Derivative Markets
        Learn key concepts about derivative markets including their structure, types, features, and differences between the over-the-counter (OTC) market and exchange-traded derivatives.
      • 10.2.3 Exchange-traded Versus Over-the-counter Derivatives
        Understand the key differences between exchange-traded and over-the-counter (OTC) derivatives markets, including standardization, liquidity, privacy, and default risk.
    • 10.3 Types Of Underlying Assets
      Comprehensive guide on the various types of underlying assets in derivative contracts. Learn about commodities, financial assets, and the over-the-counter (OTC) markets.
      • 10.3.1 Commodities
        An in-depth guide on commodities, their types, use in futures and options, and the factors influencing their prices. Learn more about the different categories, key terminologies, and their significance in financial markets.
      • 10.3.2 Financial Assets
        A comprehensive guide on the explosive growth of financial derivatives, driven by factors like volatile interest rates, financial deregulation, globalization, and advances in information technology. This section delves into the most commonly used financial assets, such as equities, interest rates, and currencies.
    • 10.4 Users Of Derivatives
      Learn about the various market participants who use derivatives, their roles, and how they utilize these financial instruments for speculation and risk management.
      • 10.4.1 Individual Investors
        Comprehensive guide on individual investors and their involvement with exchange-traded derivatives
      • 10.4.2 Institutional Investors
        Detailed guide on institutional investors and their use of derivatives including strategies like hedging, market entry and exit, arbitrage, and yield enhancement.
      • 10.4.3 Corporations And Businesses
        Explore how corporations and businesses utilize derivatives for hedging risks related to interest rates, currencies, and commodities.
      • 10.4.4 Derivative Dealers
        Learn about the role of derivative dealers in both exchange-traded and OTC markets in Canada, including the functions they serve and the key types of institutions involved.
    • 10.5 Options
      A comprehensive guide to understanding call and put options, their positions and strategies, and how market participants utilize options.
      • 10.5.1 Options Terminology
        Gain a thorough understanding of essential options terminology including strike price, option premium, expiration date, trading unit, and other key concepts.
      • 10.5.2 Option Exchanges
        A detailed guide on option exchanges in Canada, including explanations of key terms, examples, and the structure of equity option quotes.
      • 10.5.3 Option Strategies For Individual And Institutional Investors
        Understand the various option strategies used by individual and institutional investors, including detailed examples and calculations for trading call and put options on XYZ Inc. Learn speculative and risk management approaches, and the potential outcomes of different trading strategies.
      • 10.5.4 Option Strategies For Corporations
        Learn about different option strategies that corporations employ to manage risk related to interest rates, exchange rates, and commodity prices.
    • 10.6 Forwards And Futures
      Comprehensive guide distinguishing between forwards and futures contracts, used strategies, and categorization of underlying assets for investors preparing for the Canadian Securities Course certification exam.
      • 10.6.1 Key Terms And Definitions
        Comprehensive guide on key terms and definitions in futures contracts, including concepts of margin requirements, marking to market, and cash-settled futures within the context of the Canadian Securities Course.
      • 10.6.2 Futures Trading And Leverage
        Comprehensive guide on Futures Trading and Leverage including margin requirements, leverage effects, and safety considerations in futures trading.
      • 10.6.3 Futures Exchange
        This chapter provides a detailed overview of the Montréal Exchange, including the listing of index futures, Government of Canada bonds, bankers’ acceptances, and the 30-day overnight repo rate.
      • 10.6.4 Futures Strategies For Investors
        Explore key futures strategies for investors including speculative strategies and risk management techniques. Understand the benefits and risks associated with buying and selling futures.
      • 10.6.5 Futures Strategies For Corporations
        Understand how corporations utilize futures to manage risks, gain insights on practical examples, and discern differences and similarities between forward and futures contracts.
    • 10.7 Rights And Warrants
      Learn about rights and warrants and how they are used to raise capital in the Canadian securities market. Understand their features, benefits, and intrinsic value.
      • 10.7.1 Rights
        A comprehensive guide on rights offers, intrinsic value of rights during ex-rights and cum-rights periods, and how rights are traded on stock exchanges.
      • 10.7.2 Warrants
        Learn everything about warrants in this comprehensive guide: their characteristics, valuation, and advantages, along with essential definitions and key takeaways.
    • 10.8 Summary
      A comprehensive summary of key aspects of derivatives discussed in this chapter including types of derivative contracts, participants, and their uses.
Thursday, July 4, 2024