CSI Updated IFC Exam Questions and Answers by safaa

According to the MFDA Rules, a Dealing Representative must not accept any purchase orders from a client until the Branch Manager or other designated person has reviewed and approved the New Client Application Form (NCAF) for the client. This is to ensure that the Dealing Representative has obtained and verified all the necessary information about the client, such as identity, investment objectives, risk tolerance, financial situation, and suitability of investments. The review and approval of the NCAF must be completed before any trades are executed for the client, unless there are exceptional circumstances that justify a delay. In this case, Quintin should have waited for Lupita’s approval of the NCAF before placing the purchase order for Reginald.

 1: MFDA Rules as at December 31, 2021 - MFDA 2 (Rule 2.2.4)

The Corporation Group needs 5-year financing, without pledging assets (so not secured bonds).

Debentures are unsecured debt backed only by the issuer’s credit rating , meeting the requirement of not pledging assets.

They also want flexibility to repay early. Only callable debentures provide this feature since they allow the issuer to repay before maturity .

Convertible bonds (B) would dilute equity (which they want to avoid).

Commercial paper (C) and Treasury bills (D) are short-term instruments (under 1 year) , not suitable for 5-year financing.

✅ Therefore, the ideal choice is Callable Debentures.

Technical analysis is the method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. Xian-Li is using technical analysis to evaluate the companies in her portfolio.