Fixed income

Chapter 3 follows the official CIRO Institutional Securities Exam syllabus element Fixed income. This domain carries 12 questions (~12%), so your study depth should reflect both its weighting and how often it drives scenario-based judgment on this exam.

The strongest exam answers in this chapter usually do two things well: they classify the situation correctly before choosing an action, and they connect the rule to the actual business, client, market, finance, or supervisory consequence. That is usually where weaker answers lose precision.

Section Map

• 3.1 Structure of the Canadian fixed-income markets
• 3.2 Regulatory requirements for debt markets
• 3.3 Types and features of fixed-income products
• 3.4 Terminology of fixed-income products
• 3.5 Characteristics of fixed-income products
• 3.6 Characteristics of the following products and the conditions that affect the risk-return profile
• 3.7 Standard calculations to bond yields
• 3.8 Relationship between coupon, yield, duration, price sensitivity, and economic factors
• 3.9 Modified duration calculations to assess bond price change
• 3.10 Time value of money for fixed-income calculations

Study Priority

• Official weighting: 12 questions (~12%)
• Learn the rule language, but spend most of your time on scenario translation: what changes in practice, what must be documented, what must be recalculated, and what must be escalated.

In this section

• Structure of the Canadian fixed-income markets
  Understand the structure of Canadian fixed-income markets, including market size, access, delivery, settlement, and the role of credit-rating agencies.
• Regulatory requirements for debt markets
  Understand debt-market regulatory requirements, dealer and Approved Person obligations, policies and procedures, and prohibited practices.
• Types and features of fixed-income products
  Understand the types and features of Government of Canada, provincial or municipal, and corporate fixed-income securities.
• Terminology of fixed-income products
  Apply par value, coupon rate, maturity date, term to maturity, bond price, yield to maturity, and settlement terminology to realistic institutional-client, dealer, trading, issuer, or market scenarios.
• Characteristics of fixed-income products
  Analyze the investor and issuer advantages, disadvantages, risks, returns, and holding costs of fixed-income products in an institutional-securities context.
• Characteristics of the following products and the conditions that affect the risk-return profile
  Understand strips, floating-rate, callable or puttable, convertible, real return, extendable, and sinking or purchase-fund products and the conditions affecting their risk-return profile.
• Standard calculations to bond yields
  Apply standard bond-yield calculations including income yield, approximate yield to maturity, zero-coupon yield, and yield-curve interpretation to realistic institutional-client, dealer, trading, issuer, or market scenarios.
• Relationship between coupon, yield, duration, price sensitivity, and economic factors
  Apply the relationship between coupon, yield, term to maturity, Macaulay duration, modified duration, price sensitivity, and economic-factor changes to realistic institutional-client, dealer, trading, issuer, or market scenarios.
• Modified duration calculations to assess bond price change
  Apply modified-duration calculations to assess the change in a bond price for a given change in yields to realistic institutional-client, dealer, trading, issuer, or market scenarios.
• Time value of money for fixed-income calculations
  Apply time value of money for fixed-income securities, present value, discount rate, and missing-variable calculations to realistic institutional-client, dealer, trading, issuer, or market scenarios.