Canadian Securities Course (CSC) Level 1 Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Canadian Securities Course Level 1 Exam with our comprehensive study tool. Use flashcards and multiple choice questions to hone your skills. Fully understand each topic with hints and explanations. Get ready to excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is a Robo-Advisor?

A financial software that predicts market trends
An individual who gives financial advice based on experience
Provides online investment management using algorithms
Manages physical assets such as real estate holdings

The correct answer is: Provides online investment management using algorithms

A Robo-Advisor is an automated online platform that provides investment management services, primarily utilizing algorithms to assess a client's financial situation and investment goals. This technology-driven approach enables the platform to create and manage a diversified investment portfolio for clients, often at a lower cost compared to traditional financial advisors. The use of algorithms allows Robo-Advisors to analyze vast amounts of data quickly, tailor investment strategies for individual clients, and automatically reallocate assets to maintain a desired level of risk or to respond to market changes. By relying on data and technology, Robo-Advisors offer a user-friendly experience and can cater to a wider audience, particularly those seeking a straightforward, hands-off investment approach. In contrast, other options refer to different concepts: predicting market trends is more aligned with analysis and research rather than management, while an individual providing financial advice is a traditional financial advisor role. Managing physical assets, such as real estate, misses the digital and algorithmic focus of Robo-Advisors, which specifically deal with investments and asset allocation through online platforms.