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Study guide · Last updated October 2026

CSC Exam 2 Exam Study Guide (2026)

Everything the Canadian Securities Course (CSC) Exam 2 tests, topic by topic: what each section covers, the facts that come up most, and how to study it. Pair it with the free 15-question practice test.

The exam at a glance

Questions100 multiple-choice questions
Time2 hours
Passing score60%
FormatClosed book, computer-based
Certifying bodyCanadian Securities Institute (CSI)
Test providerRemote proctoring or an in-person test centre, booked through CSI

Mind map: the whole exam on one screen

CSC Exam 2
Fundamental and Technical Analysis
P/E ratioDividend yieldTop-down analysisTechnical analysis
The Portfolio Approach
Beta of 1.0Standard deviationSystematic riskStrategic allocation
Mutual Funds
NAVPSForward pricingFund FactsMER
Exchange-Traded Funds
5 key facts
Alternative, Managed and Structured Products
5 key facts
Canadian Taxation
5 key facts
Fee-Based Accounts and Retail Clients
5 key facts
Working with the Institutional Client
5 key facts
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Read the complete CSC Exam 2 study notes for “Fundamental and Technical Analysis”

Our first full set of comprehensive notes, about 10 minutes of reading: Fundamental analysis: top down · Ratios you must know · Technical analysis · Efficient markets, a worked exam example, the traps examiners use and a one-minute recap. Create a free account to read it and see how premium notes work before you decide.

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1. Fundamental and Technical Analysis

Valuing companies from their numbers, and reading price charts.

Key facts

  • Fundamental analysis looks at the economy, industry and company.
  • P/E = price ÷ earnings per share; dividend yield = dividend ÷ price.
  • Debt-to-equity measures financial leverage.
  • Technical analysis studies price and volume patterns, trends and moving averages.
  • The efficient market hypothesis says prices already reflect available information.

Flashcards

P/E ratioPrice ÷ earnings per share.
Dividend yieldAnnual dividend ÷ share price.
Top-down analysisEconomy, then industry, then company.
Technical analysisPrice and volume patterns.

Exam tip: If the data in the question is a chart or volume, it's technical; if it's earnings or ratios, it's fundamental.

2. The Portfolio Approach

Risk, return and how portfolios are built for a client.

Key facts

  • Standard deviation measures total volatility; beta measures market (systematic) risk.
  • Diversification reduces non-systematic risk only.
  • Asset allocation is the biggest driver of long-run portfolio results.
  • Strategic allocation sets long-term targets; tactical allocation makes short-term shifts.
  • The investment policy statement records the client's objectives and constraints.

Flashcards

Beta of 1.0Moves in line with the market.
Standard deviationTotal volatility of returns.
Systematic riskMarket risk; can't be diversified away.
Strategic allocationLong-term target mix.

Exam tip: Match risk measures: beta for market risk, standard deviation for total risk.

3. Mutual Funds

How mutual funds are structured, priced and sold in Canada.

Key facts

  • NAVPS = (assets − liabilities) ÷ units outstanding.
  • Funds use forward pricing at the next NAVPS after the order.
  • The Fund Facts document must be delivered to buyers.
  • Right of withdrawal: within 2 business days after receiving the Fund Facts.
  • The MER reduces returns every year.

Flashcards

NAVPSNet assets ÷ units outstanding.
Forward pricingNext NAVPS after the order is received.
Fund FactsShort plain-language summary delivered to buyers.
MERAnnual fund costs as % of average net assets.

Exam tip: A fund's price is never 'the price right now' during the day. That's the ETF.

Test yourself on these topics

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4. Exchange-Traded Funds

ETF structure, trading and uses.

Key facts

  • ETFs trade on exchanges throughout the day.
  • Most ETFs track an index and have low MERs.
3 more key facts, 8 key notes, 100 flashcards and 375 practice questions for this topic are in premium.

Flashcards

ETF tradingIntraday on an exchange at market prices.

Exam tip: Leveraged/inverse ETFs held for months can drift far from the expected multiple. That's the usual trap.

5. Alternative, Managed and Structured Products

Segregated funds, hedge funds, liquid alts, PPNs and managed accounts.

Key facts

  • Segregated funds are insurance contracts with 75% to 100% maturity and death benefit guarantees.
  • Hedge funds use leverage, short selling and derivatives, usually sold in the exempt market.
3 more key facts, 7 key notes, 100 flashcards and 375 practice questions for this topic are in premium.

Flashcards

Segregated fund guarantee75% to 100% of deposits at maturity or death.

Exam tip: Guarantees on segregated funds come from the insurer, so they're only as good as the insurer.

6. Canadian Taxation

How investment income is taxed and the registered plans that shelter it.

Key facts

  • Interest is fully taxable; eligible dividends get the dividend tax credit; 50% of capital gains is taxable.
  • Capital losses offset capital gains; unused losses carry back 3 years or forward indefinitely.
3 more key facts, 7 key notes, 100 flashcards and 375 practice questions for this topic are in premium.

Flashcards

Capital gains inclusion rate50%.

Exam tip: Rank after-tax income: capital gains and eligible dividends are taxed less than interest at most income levels.

7. Fee-Based Accounts and Retail Clients

Account and fee structures, and serving retail clients.

Key facts

  • Fee-based accounts charge an asset-based fee instead of commissions.
  • Commission-based accounts may suit infrequent traders.
3 more key facts, 7 key notes, 100 flashcards and 375 practice questions for this topic are in premium.

Flashcards

Fee-based accountAsset-based annual fee instead of commissions.

Exam tip: Fee-based isn't always better: for a client who rarely trades, commissions may cost less.

8. Working with the Institutional Client

How the institutional side of a dealer works.

Key facts

  • Institutional clients include pension funds, insurers, mutual funds and governments.
  • They trade large blocks through institutional sales and trading desks.
3 more key facts, 7 key notes, 100 flashcards and 375 practice questions for this topic are in premium.

Flashcards

Institutional client examplesPension funds, insurers, mutual funds, governments.

Exam tip: Sell side = dealers selling services; buy side = institutions doing the buying.

How to pass

  • Investment analysis and the portfolio approach are 36% of the exam together. Know the ratios (P/E, dividend yield, debt-to-equity) and what beta and standard deviation measure.
  • Tax questions are only about 6% but are easy points: RRSP vs TFSA vs RESP vs FHSA, capital gains inclusion, the dividend tax credit, attribution rules.
  • You need 60% to pass, with up to three attempts within your enrolment period.
  • Learn the difference between a mutual fund trust and a mutual fund corporation, and between NAVPS pricing and ETF market pricing.

Frequently asked questions

How long should I study for the CSC Exam 2 exam?

Most working candidates need 4 to 8 weeks at 45 to 60 minutes a day. Book your exam once your Readiness Score has stayed at 80 or higher for about a week.

Can I take the CSC Exam 2 exam online?

Yes. CSC Exam 2 can be written remotely with a proctor or in person at a test centre. Format: closed book, computer-based. Check the current exam guide for the rules.

What score do I need to pass the CSC Exam 2 exam?

60%. The exam has 100 multiple-choice questions and a time limit of 2 hours.

What are the most tested topics?

The outline covers fundamental and technical analysis, the portfolio approach, mutual funds, exchange-traded funds, alternative, managed and structured products, canadian taxation, fee-based accounts and retail clients, working with the institutional client. Use the free practice test to see which ones you need most.

The premium CSC Exam 2 study path

Premium CSC Exam 2 prep is studied one topic at a time. Each step starts with that topic's key notes and flashcard deck, then its own question sets of 25, so you master one topic before you move to the next. When every topic is strong, the 6 full mock exams show you're ready.

3,000practice questions, every answer explained
6full-length mock exams, 100 questions each, timed
800flashcards with spaced repetition, sorted by topic
60comprehensive key notes across 8 topics

Your step-by-step study path

  1. 1
    Fundamental and Technical Analysis8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Notes free with an account
  2. 2
    The Portfolio Approach8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  3. 3
    Mutual Funds8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  4. 4
    Exchange-Traded Funds8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  5. 5
    Alternative, Managed and Structured Products7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  6. 6
    Canadian Taxation7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  7. 7
    Fee-Based Accounts and Retail Clients7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  8. 8
    Working with the Institutional Client7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
    Premium
  9. Final step: 6 full mock exams100 questions each, timed like test day. Pass them, then book your exam.
    Premium

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