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Free CIRE Practice Questions (2026): 10 Questions with Answers
Want to see where you stand on the CIRE? Below are 10 free practice questions spread across the CIRE syllabus — know-your-client rules, conflicts of interest, ethics, financial statements, investment products, economics and market mechanics. Pick an answer, then tap "Show answer" for the correct choice and the explanation.
These questions are taken word-for-word from the SmartExam CIRE practice bank. They are written for study and are not actual CIRO exam questions.
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Question 1 — Know your client
According to the 'Know Your Client' (KYC) rule, when is an investment dealer required to update client information?
- A) Within a reasonable time after becoming aware of a material change in the client's circumstances.
- B) Only when the client requests a trade.
- C) Every 5 years regardless of changes.
- D) Only if the client's portfolio loses value.
Show answer
Correct answer: A — Within a reasonable time after becoming aware of a material change in the client's circumstances.
Dealers must take reasonable steps to keep KYC information current. If they become aware of a material change (e.g., marriage, job loss), they must update the file within a reasonable time.
Question 2 — Conflicts of interest
A Registered Representative is compensated more for selling the firm's in-house mutual funds than third-party funds. Under CIRO's conflict-of-interest rules, how must this conflict be addressed?
- A) It may be ignored because compensation arrangements are an internal firm matter
- B) It must be resolved by always recommending the in-house fund to the client
- C) It must be addressed in the best interest of the client, and material conflicts must be disclosed or avoided
- D) It only needs to be disclosed if the client specifically asks about compensation
Show answer
Correct answer: C — It must be addressed in the best interest of the client, and material conflicts must be disclosed or avoided
CIRO rules require that material conflicts of interest be addressed in the best interest of the client—avoided where they cannot otherwise be managed, and otherwise disclosed clearly and in a timely way. Steering clients to higher-paying products is prohibited.
Question 3 — Ethics and market integrity
What does 'front running' refer to in the context of unethical practices?
- A) An advisor executing trades for themselves ahead of client orders
- B) A dealer delaying trades to manipulate prices
- C) An investor buying and selling the same security multiple times
- D) A firm publicizing false information about a security
Show answer
Correct answer: A — An advisor executing trades for themselves ahead of client orders
Front running is an unethical practice where a trader executes orders on a security for their own account while taking advantage of advance knowledge of pending orders from their clients.
Question 4 — Company analysis
In a company's 'Auditor's Report', what does an 'unqualified opinion' indicate?
- A) The financial statements contain material misstatements.
- B) The company is in financial distress.
- C) The auditor was unable to verify the financial statements.
- D) The financial statements present the company's financial position fairly.
Show answer
Correct answer: D — The financial statements present the company's financial position fairly.
An unqualified opinion (often called a 'clean' opinion) means the auditor believes the financial statements fairly represent the company's financial position in accordance with accounting standards.
Question 5 — Mutual funds
What is the primary advantage of an 'Index Fund' compared to an actively managed fund?
- A) Lower management expense ratio (MER).
- B) Higher potential for outperforming the market.
- C) Guaranteed principal protection.
- D) Ability to use complex hedging strategies.
Show answer
Correct answer: A — Lower management expense ratio (MER).
Index funds follow a passive strategy, replicating a benchmark. Because they do not require expensive research teams or frequent trading, their management fees (MERs) are typically much lower.
Question 6 — Alternative strategies
Which type of hedge fund strategy attempts to profit from unique events such as mergers, acquisitions, or stock splits?
- A) Relative value strategy
- B) Event-driven strategy
- C) Short selling strategy
- D) Directional strategy
Show answer
Correct answer: B — Event-driven strategy
Event-driven strategies seek to profit from unique events such as mergers, acquisitions, stock splits, and buybacks. These funds typically have medium exposure to the underlying market direction.
Question 7 — Economic policy
Which macroeconomic theory advocates that the government should use fiscal policy (spending and taxation) to stimulate the economy during a recession?
- A) Monetarism
- B) Rational Expectations Theory
- C) Keynesian Economics
- D) Supply-Side Economics
Show answer
Correct answer: C — Keynesian Economics
Keynesian economics suggests that active government intervention through fiscal policy (increasing spending or cutting taxes) is necessary to stimulate aggregate demand and pull an economy out of a recession.
Question 8 — Registered accounts
What happens to the contribution room in a TFSA if a withdrawal is made?
- A) The contribution room is lost forever.
- B) The amount withdrawn can be re-contributed immediately.
- C) A penalty is charged.
- D) The amount withdrawn is added back to the contribution room in the following calendar year.
Show answer
Correct answer: D — The amount withdrawn is added back to the contribution room in the following calendar year.
Withdrawals from a TFSA increase the available contribution room, but the room is only added back at the beginning of the following calendar year.
Question 9 — Corporate actions
What typically happens when a company undergoes a reverse stock split?
- A) The total value of investments increases
- B) Share prices decrease
- C) Dividends are increased
- D) The number of shares decreases
Show answer
Correct answer: D — The number of shares decreases
In a reverse stock split, the company reduces the number of outstanding shares, which can raise the market price per share.
Question 10 — Economics — balance of payments
What component of the balance of payments records the import and export of goods and services?
- A) Current account
- B) Capital account
- C) Deficit account
- D) Financial account
Show answer
Correct answer: A — Current account
The current account records the import and export of goods and services between Canadians and foreigners.
How did you do?
If you missed more than two or three, note the topics — those are likely your weak sections, and they're where focused practice pays off fastest.
Where these topics sit on the real exam
The real CIRE is 110 multiple-choice questions in 2 hours. CIRO's syllabus gives indicative question counts by element. Conduct-heavy areas carry a lot of weight: scope of client relationship (17) and conflicts of interest and ethics (16), while securities, managed products and mutual funds is the largest single element (21). Questions 1–3 above fall in those conduct areas; don't neglect them because they "feel like common sense" — the exam tests the specific rules.
Use CIRO's official practice exam too
CIRO publishes a free, full-length CIRE practice exam (110 questions) with an answer key. Its study guide says the practice exam was designed to be a real representation of the type and breadth of questions you'll see. The key gives the correct letter but no explanations, so it works best as a timed dress rehearsal near the end of your preparation. Our CIRE self-study guide explains how to fit it into a plan.
Keep practising with SmartExam
Ten questions are a start; the real exam is 110. The SmartExam CIRE bank has about 1,000 questions.
Every answer has an explanation, a topic-by-topic report after each session shows where you lost marks, sessions come in 20, 50 or 100 questions, and it all works offline. One All Access subscription — CA$15.99/month, 7-day free trial — unlocks all 12 banks.
👉 Download SmartExam on the App Store and keep practising. See all features.
Frequently asked questions
Are these real CIRE exam questions?
No. They come from SmartExam's own CIRE practice bank and are written for study. They are not actual CIRO exam questions.
Is there an official free CIRE practice exam?
Yes. CIRO publishes a 110-question CIRE practice exam with an answer key on ciro.ca. It shows the correct letter for each question but no explanations.
How many questions are on the real CIRE?
110 multiple-choice questions in 2 hours, according to CIRO's syllabus.
How many CIRE practice questions does SmartExam have?
The SmartExam CIRE bank has about 1,000 questions, each with an explanation.
Sources
- CIRO — CIRE Exam Syllabus (PDF): ciro.ca/media/12246
- CIRO — CIRE Practice Exam (PDF): ciro.ca/media/13821
- CIRO — CIRE Guide for Studying (PDF): ciro.ca/media/12251
Information checked October 13, 2026. Answers follow the course material; where rules may have changed, confirm with CIRO.
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