CIRO · Securities Study Guide · Part 2 · Chapters 4–7

Element 2: Fixed income +3CIRO · Securities · English

59 topics · Updated 2026-09-17

4.Element 2: Fixed income

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Regulatory requirements for debt markets

regenv

Covers requirements to promote fair and efficient debt markets.

Key Rules
  • General requirements to promote fair and efficient debt markets
  • Policies and procedures – the requirement and content
  • Prohibited practices – obligations on the Investment Dealer and Approved Person
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Types and features of fixed-income products

products

Covers types and features of various fixed-income products.

Key Rules
  • Government of Canada Securities
  • Provincial and municipal government securities
  • Corporate securities
  • Guaranteed income certificates (GIC)
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Terminology of fixed-income products

products

Covers application of fixed-income terminology to specific situations.

Key Rules
  • Par value
  • Coupon rate
  • Maturity date
  • Term to maturity
  • Bond price
  • Yield to maturity
  • Settlement
  • Covenants
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Characteristics of fixed-income products

products

Covers analysis of fixed-income product characteristics for investors and issuers.

Key Rules
  • Advantages and disadvantages to the investor
  • Advantages and disadvantages to the issuer
  • Sources of risks and potential returns
  • Impact of costs associated with acquiring and holding fixed-income products
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Instrument characteristics affecting risk-return profile

products

Covers characteristics and conditions affecting the risk-return profile of fixed-income instruments.

Key Rules
  • Strips
  • Floating rate
  • Callable/puttable
  • Convertible
  • Extendable
  • Sinking/purchase funds
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Standard calculations to bond yields

products

Covers application of standard yield calculations to bonds.

Key Rules
  • Income (or current) yield
  • (Approximate) yield to maturity
  • Yield on a zero-coupon instrument
  • Yield curves
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Relationships between bond variables

products

Covers relationships among coupon, yield, maturity, price and duration in specific situations.

Key Rules
  • Coupon, yield, term-to-maturity and price volatility
  • Macaulay duration, modified duration and price sensitivity
  • Changes in economic factors and price of fixed-income products
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Modified duration calculation

products

Covers applying modified duration to assess a bond's price change for a given yield change.

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Time value of money in investment calculations

products

Covers applying time value of money to fixed-income calculations.

Key Rules
  • Calculation of present value of a fixed-income security given par value, coupon rate, term to maturity and discount rate
  • Calculation of any missing variable in a time value of money calculation
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Instruments affecting the risk–return profile

products

Covers characteristics of instruments and conditions affecting risk-return profiles.

Key Rules
  • Strips
  • Floating rate
  • Callable/puttable
  • Convertible
  • Extendable
  • Sinking/purchase funds
📊

Relationships between bond factors

products

Applies the relationships between coupon, yield, term, price volatility and duration.

Key Rules
  • Coupon, yield, term-to-maturity and price volatility
  • Macaulay duration, modified duration and price sensitivity
  • Changes in economic factors and price of fixed-income products
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Time value of money to investment calculations

products

Applies time value of money to fixed-income calculations.

Key Rules
  • Calculation of present value given par value, coupon rate, term to maturity and discount rate
  • Calculation of any missing variable in a time value of money calculation

5.If I use a preparatory provider, what does a good one look like?

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Key factors when selecting a prep provider

regenv

The blueprint lists factors to consider when evaluating whether a preparatory provider is a good fit for exam preparation.

Key Rules
  • Reputation and reviews
  • Accreditation and credentials
  • Comprehensive study materials
  • Structured study plan
  • Flexibility and accessibility
  • Practice exams and assessments
  • Student support
  • Cost and value
  • Trial options
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Reputation and reviews

regenv

Assessing a prep provider's standing in the investment industry through reputation and independent reviews.

Key Rules
  • Look for a solid reputation in the investment industry
  • Check reviews and testimonials on independent websites
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Accreditation and credentials

regenv

Verifying whether the provider is accredited and confirming the qualifications of its instructors.

Key Rules
  • Check accreditation by relevant bodies
  • Verify instructor qualifications and experience
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Comprehensive study materials

regenv

Ensuring the provider offers current materials covering all exam learning outcomes with varied resource types.

Key Rules
  • Comprehensive up-to-date materials covering all learning outcomes
  • Variety such as textbooks, online modules, practice exams and interactive tools
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Structured study plan

regenv

Looking for a structured plan aligned to your exam schedule with guidance on using materials and managing time.

Key Rules
  • Structured plan aligned with exam schedule
  • Guidance on using materials and managing study time
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Flexibility and accessibility

regenv

Considering flexible delivery options, platform usability, device and mobile access, and access duration to materials.

Key Rules
  • Flexible options like online courses, live webinars and on-demand videos
  • User-friendly platform accessible on various devices
  • Mobile app access
  • Consider length of access to study materials against your timeline
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Practice exams and assessments

regenv

Ensuring ample practice exams that mimic the actual format with detailed feedback on mistakes.

Key Rules
  • Ample practice exams mimicking the actual format
  • Detailed feedback and explanations for practice questions
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Student support

regenv

Checking availability of support services and quality of customer support for interacting with instructors and peers.

Key Rules
  • Support services such as tutoring, study groups, help desks or forums
  • Quality customer support for technical or administrative issues
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Cost and value

regenv

Comparing costs and package inclusions to evaluate the overall value relative to materials, support and success rates.

Key Rules
  • Compare cost and package inclusions across providers
  • Evaluate value including materials, support and success rates
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Trial options

regenv

Taking advantage of free trials or sample materials to assess quality, variety and suitability.

Key Rules
  • Use free trials or sample materials to assess quality and suitability

6.Element 3: Equities

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Prospectus requirements and exemptions

regenv

Covers the requirement and purpose of a prospectus and when exemptions apply under national instruments.

Key Rules
  • Application to primary and secondary distributions
  • Application to takeovers
  • Comprehensive disclosure
  • Advertising and marketing
  • Timely disclosure requirements
  • Exempt market securities
  • Private placements
  • Accredited investor
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Types and key features of common shares

products

Covers classes and features of common shares.

Key Rules
  • Dividend rights
  • Voting rights
  • Rights to surplus on dissolution
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Canadian depositary receipts (CDRs)

products

Covers the types and key features of Canadian depositary receipts.

Key Rules
  • Rights to holder
  • CDR ratio
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Characteristics of common shares and depositary receipts

products

Covers analysis of investing in different classes of common shares and depositary receipts.

Key Rules
  • Source of risks and potential returns
  • Impact of costs associated with acquiring and holding common shares and depositary receipts
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Features of common share ownership

products

Covers analysis of the advantages and disadvantages of common share ownership.

Key Rules
  • Advantages and disadvantages of common share ownership
  • Advantages and disadvantages to the issuer of common shares
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Corporate actions affecting the shareholder

products

Covers how corporate actions can affect a shareholder's position.

Key Rules
  • How dividends are declared, claimed and taxed
  • The impact of stock splits and consolidations
  • Share buyback
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Types and key features of preferred shares

products

Covers classes and features of preferred shares.

Key Rules
  • Dividend rights
  • Voting rights
  • Rights on dissolution
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Characteristics of preferred shares

products

Covers analysis of investing in different classes of preferred shares.

Key Rules
  • Source of risks and potential returns
  • Impact of costs associated with acquiring and holding preferred shares
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Common vs. preferred share ownership

products

Covers applying the distinction between common and preferred share ownership.

Key Rules
  • Advantages and disadvantages to the owners of preferred shares
  • Advantages and disadvantages to the issuer of preferred shares
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Time value of money for equity calculations

products

Covers applying time value of money to equity valuation.

Key Rules
  • Calculation of present value of an equity security using discounted cash flow and price–earnings growth models
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Requirement and purpose of a prospectus

regenv

Covers prospectus requirements and exemptions under National Instruments 41-101 and 45-106.

Key Rules
  • Application to primary and secondary distributions
  • Application to takeovers
  • Comprehensive disclosure
  • Advertising and marketing
  • Timely disclosure requirements
  • Exempt market securities
  • Private placements
  • Accredited investor
📊

Types and key features of Canadian depositary receipts

products

Covers CDRs and their holder rights.

Key Rules
  • Rights to holder
  • CDR ratio
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How corporate actions affect the shareholder

products

Covers the effect of corporate actions on a shareholder's position.

Key Rules
  • How dividends are declared, claimed and taxed
  • The impact of stock splits and consolidations
  • Share buyback
📊

Common share vs. preferred share ownership

products

Applies the distinction between common and preferred share ownership.

Key Rules
  • Advantages and disadvantages to the owners of preferred shares
  • Advantages and disadvantages to the issuer of preferred shares

7.Element 4: Securities analysis

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Factors in performing company analysis

markets

Covers analysis of factors to determine whether a company is a good investment.

Key Rules
  • All relevant documents and sources of information
  • Clear explanations of company analysis to retail clients when requested
  • Collaboration and consultation with internal and external subject matter experts
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Statement of financial position

markets

Covers the purpose and content of a company's statement of financial position.

Key Rules
  • Format and items included and how they are classified
  • Purpose of the statement of changes in equity and its relation to the balance sheet and earnings statement
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Statement of comprehensive income

markets

Covers the purpose and content of the statement of comprehensive income, including sources of income.

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Statement of cash flows

markets

Covers the purpose and content of the statement of cash flows.

Key Rules
  • Cash flow from operating activities
  • Cash flow from investing activities
  • Cash flow from financing activities
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Other factors regarding financial statements

markets

Covers additional factors relating to company financial statements.

Key Rules
  • Note for the financial statements
  • Auditor's report
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Analyzing financial statements with ratios

markets

Covers analysis of basic financial statements to give meaningful responses, including ratio calculations.

Key Rules
  • Liquidity ratios (current, quick, cash)
  • Risk analysis ratios (debt to equity, debt to assets, interest coverage)
  • Profitability ratios (profit margins, return on assets, return on invested capital)
  • Efficiency ratios (fixed asset, inventory, receivables, payables, working capital turnover)
  • Equity ratios (dividend payout, retention rate, earnings per share, book value per share, free cash flow to equity)
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Analyzing financial statements for investment value

markets

Covers analysis of financial statements to respond on the investment in question.

Key Rules
  • Value ratios (EPS, price to earnings, dividend yield, dividend cover, dividend payout, equity to common share)
  • The use of trend analysis and external comparisons
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Information from exchanges and regulators

markets

Covers types and uses of equity and fixed-income information provided by exchanges and regulators.

Key Rules
  • Price, volumes, yields and market capitalization
  • Restrictions including cease trade orders (CTOs)
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Purpose and uses of market indices

markets

Covers the purpose, construction and uses of market indices.

Key Rules
  • How index values are constructed
  • Index vs. average vs. multi-factor
  • Market-value-weighted vs. price-weighted vs. equal-weighted
  • Price return vs. total return
  • Asset class, sector, country, international
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Use of indices

markets

Covers applying indices to market summaries and benchmark performance.

Key Rules
  • Providing a market summary
  • Calculating performance versus a benchmark
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Methods of assessing stock market behaviour

markets

Covers analysis of methods used to assess stock market behaviour.

Key Rules
  • Importance of using different sources of company analysis and information
  • Fundamental analysis
  • Quantitative analysis
  • Technical/statistical analysis
  • The assumptions and valuation approaches which may be used
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Classifying industries into sectors

markets

Covers how industries are classified into sectors and interpreted in stock valuation.

Key Rules
  • Consumer products
  • Manufacturing industries
  • Service industries
  • Technologies
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Macroeconomic factors on securities prices

markets

Covers applying macroeconomic factors to investor expectations and market movements.

Key Rules
  • Interest rates
  • Inflation
  • Employment
  • Productivity
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Factors impacting performance expectations

markets

Covers analysis of other factors impacting performance expectations over various time horizons.

Key Rules
  • Asset class
  • Volatility
  • Market sector
  • Economic cycle
  • Benchmarks
📌

Factors involved in performing company analysis

markets

Analyzes the factors in company analysis to determine if a company is a good investment.

Key Rules
  • All relevant documents and sources of information
  • Clear explanations of company analysis to retail clients when requested
  • Collaboration and consultation with internal and external subject matter experts
📌

Purpose and content of the statement of financial position

markets

Covers the format and classification of the statement of financial position.

Key Rules
  • Format and items included and how they are classified
  • Purpose of the statement of changes in equity and its relation to the balance sheet and earnings statement
📌

Purpose and content of statement of comprehensive income

markets

Covers the statement of comprehensive income and sources of income.

📌

Purpose and content of the statement of cash flows

markets

Covers the components of the statement of cash flows.

Key Rules
  • Cash flow from operating activities
  • Cash flow from investing activities
  • Cash flow from financing activities
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Other factors regarding company financial statements

markets

Covers supplementary elements of financial statements.

Key Rules
  • Note for the financial statements
  • Auditor's report
📌

Analyzing financial statements on the company

markets

Analyzes financial statements to give meaningful responses on a company, involving ratio calculations.

Key Rules
  • Liquidity ratios – current, quick and cash ratios
  • Risk analysis ratios – debt to equity, debt to assets, interest coverage
  • Profitability ratios – profit margins, return on assets, return on invested capital
  • Efficiency ratios – fixed asset, inventory, receivables, payables, working capital turnover
  • Equity ratios – dividend payout, retention rate, earnings per share, book value per share, free cash flow to equity
📌

Analyzing financial statements on the investment

markets

Analyzes financial statements to give responses on the investment, involving value ratios and trends.

Key Rules
  • Value ratios – EPS, price to earnings, dividend yield, dividend cover, dividend payout, equity to common share
  • The use of trend analysis and external comparisons
📌

Information provided by exchanges and regulators

markets

Covers types and uses of information for equities and fixed income from exchanges and regulators.

Key Rules
  • Price, volumes, yields and market capitalization
  • Restrictions including cease trade orders (CTOs)
📌

Other factors impacting performance expectations

markets

Analyzes factors affecting performance over various time horizons.

Key Rules
  • Asset class
  • Volatility
  • Market sector
  • Economic cycle
  • Benchmarks

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← Back to the CIRO study guide 1. Element 1: Know-Your-Client (KYC) & suitability +23. Should I use a preparatory provider or self-study? +34. Academic or topical learning programs +3

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