Use this syllabus as your case-first checklist for IMT Exam 2. Topic weightings and exam structure are from CSI’s official Exam & Credits page; chapter mapping follows the official Curriculum page.
What’s covered
Investment Policy and Understanding Risk Profile (16%)
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Chapter 1 - The Portfolio Management Process
- Given a client vignette, choose the correct next step in the portfolio management process.
- Gather required regulatory and firm information and identify what is missing before proceeding.
- Translate client statements into explicit objectives and constraints (horizon, liquidity, tax, and legal).
- Draft a concise IPS objective and constraints summary that is measurable and internally consistent.
- Select the best follow-up questions to clarify ambiguous risk/return goals in a case.
- Determine whether there is sufficient authority and documentation to proceed with a recommendation.
- Choose an appropriate benchmark and monitoring cadence that matches the client’s IPS and mandate.
- Identify when a situation requires escalation and additional documentation rather than immediate action.
- Select communication phrasing that sets realistic expectations for volatility and drawdowns.
- Justify the most defensible action when information is incomplete (pause, gather facts, document).
Chapter 2 - Understanding a Client's Risk Profile
- Diagnose behavioural biases displayed in a client case and predict likely decision errors.
- Evaluate the output of a risk questionnaire and decide how to validate it using client behaviour and discussion.
- Choose communication strategies that counter specific biases (loss aversion, overconfidence, anchoring).
- Reconcile conflicting signals between risk tolerance, risk capacity, and required return in a vignette.
- Select process guardrails (rules-based rebalancing, pre-commitments) to improve plan adherence.
- Identify recency bias in a case and choose framing that refocuses the client on long-term objectives.
- Respond to familiarity or concentration bias by proposing diversification steps that respect constraints.
- Decide whether a robo-advisor style solution is appropriate given behavioural and complexity factors.
- Adapt explanation depth and product complexity to the investor personality cues in the case.
- Document behavioural considerations and plan commitments in a way that supports consistent follow-through.
Asset Allocation and Investment Management (14%)
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Chapter 3 - Asset Allocation and Investment Strategies
- Construct a strategic asset allocation from objectives, horizon, and constraints in a vignette.
- Choose between strategic, tactical, and dynamic allocation approaches based on governance and client needs.
- Determine appropriate policy ranges and select practical rebalancing thresholds for the client.
- Apply diversification and correlation concepts to reduce concentration risk while maintaining expected return.
- Recommend an asset location approach across account types to improve after-tax results conceptually.
- Select an equity investment strategy (value, growth, dividend, index, factor) consistent with client beliefs and risk profile.
- Calculate target weights and rebalance trades from a current allocation to a target allocation.
- Evaluate trade-offs between expected return and risk when adjusting allocations in response to constraints.
- Identify when constraints require deviating from a standard model portfolio and justify the change.
- Explain the recommended allocation to a client using clear, non-technical language.
Chapter 4 - Investment Management Today
- Evaluate whether active or passive implementation fits a client’s objectives, costs, and preferences.
- Choose an appropriate benchmark for a portfolio mandate and justify it.
- Assess how fees, turnover, and taxes change expected net returns in a case scenario.
- Compare manager options using high-level due diligence factors (mandate fit, process, and consistency).
- Identify style drift in a manager description and decide whether it creates a suitability or monitoring concern.
- Select portfolio constraints and guidelines appropriate to the client’s risk profile and objectives.
- Decide when liquidity and implementation constraints suggest using pooled vehicles over direct holdings.
- Identify ethical or compliance issues in a scenario (fair dealing, conflicts, misleading claims) and choose the correct response.
- Recommend a reporting cadence and monitoring approach consistent with client complexity and needs.
- Justify a disciplined process when a client wants to chase short-term performance or headlines.
Equity Securities (14%)
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Chapter 5 - Equity Securities
- Decide between individual equities and a managed product based on diversification needs and resources in a vignette.
- Select an appropriate equity instrument (common versus preferred) given income and growth objectives.
- Interpret how a corporate action affects holdings and expected return in a scenario.
- Identify the primary risks of an equity recommendation (currency, concentration, liquidity) and address them.
- Choose a practical execution approach for an equity trade given liquidity considerations at a high level.
- Calculate a holding period return including dividends and compare it to a benchmark in a case.
- Determine whether an equity recommendation aligns with the client’s time horizon and risk capacity.
- Explain the relationship between business risk and expected equity return in client-friendly language.
- Recommend diversification steps when a client holds excessive single-name exposure.
- Select disclosures that are fair and balanced when discussing equity performance expectations.
Chapter 6 - Analysis of Equity Securities I: Economic and Industry Analysis
- Given a macro scenario, choose sectors or styles likely to be favoured or pressured conceptually.
- Interpret changes in inflation, rates, or growth indicators and relate them to equity risk in a vignette.
- Evaluate how monetary or fiscal policy changes can affect industries and valuations at a high level.
- Use industry analysis to identify competitive risks and opportunities relevant to a recommendation.
- Distinguish cyclical versus secular drivers in an industry or company vignette.
- Assess forecast uncertainty and choose appropriately conservative assumptions in client advice.
- Decide when to delay action because additional information or confirmation is required.
- Identify which metrics are most relevant to the macro narrative presented in a case.
- Choose portfolio adjustments that remain consistent with IPS constraints while reflecting the scenario.
- Justify sector or industry recommendations in plain language with balanced risk discussion.
Chapter 7 - Analysis of Equity Securities II: Company Analysis and Valuation
- Interpret financial statement clues in a vignette to assess profitability, leverage, and cash flow quality.
- Compare companies using ratios and identify which appears more attractively valued given stated assumptions.
- Choose an appropriate valuation approach (DCF, multiples, dividend model) for a company type in a scenario.
- Account for high-level accounting differences (IFRS versus GAAP) when comparing firms conceptually.
- Identify red flags in earnings quality and decide what additional checks are needed.
- Evaluate valuation sensitivity to growth and discount rate assumptions and communicate uncertainty appropriately.
- Apply resource-company considerations at a high level (commodity price sensitivity and reserves assumptions).
- Decide whether market price is justified given fundamentals and risk in a case scenario.
- Explain valuation conclusions to a client without overstating precision or certainty.
- Document the rationale for including or excluding a security based on analysis and constraints.
Chapter 8 - Technical Analysis
- Use trend and support/resistance information to choose an action consistent with policy and risk controls.
- Interpret basic indicator signals (e.g., moving averages, RSI) in a vignette and choose the most likely implication.
- Combine technical and fundamental evidence to select a higher-confidence decision in a case scenario.
- Identify when technical signals may be unreliable (illiquidity, event risk) and choose a cautious response.
- Select an appropriate risk management response to a breakout or breakdown (stops and position sizing) conceptually.
- Interpret sentiment indicators and decide whether they suggest crowded positioning in a vignette.
- Apply intermarket cues to judge the broader risk environment at a high level.
- Avoid overtrading by following a documented process and identify when the best action is to do nothing.
- Communicate technical views ethically with balanced wording and appropriate caveats.
- Evaluate whether a technical strategy remains suitable given client constraints and volatility tolerance.
Debt Securities (18%)
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Chapter 9 - Debt Securities
- Choose an appropriate bond type given client objectives and constraints in a vignette.
- Identify the risks driving a bond’s yield (credit versus interest rate) and decide if it fits the client.
- Interpret how yield changes affect bond prices and portfolio value in a scenario.
- Evaluate the trade-off between credit risk and interest rate risk when selecting fixed-income exposures.
- Consider liquidity and bid/ask spreads in a bond trade scenario at a high level.
- Calculate a simple yield measure or approximate return from basic coupon and price inputs.
- Determine how callable features affect suitability and expected performance in a case.
- Identify when a bond recommendation conflicts with horizon or liquidity needs and choose the corrective action.
- Explain accrued interest and settlement mechanics to a client in clear language.
- Document the bond recommendation rationale and key risk disclosures appropriately.
Chapter 10 - Analysis of Debt Securities I: Valuation, Term Structure and Pricing
- Apply present value reasoning to decide which bond is richer or cheaper given yields in a vignette.
- Interpret yield curve shape and select duration exposure consistent with a scenario-based outlook.
- Use spread changes to infer credit conditions and decide whether risk has increased or decreased.
- Calculate an approximate bond price from yield and coupon data using simplified assumptions.
- Choose discount rates for cash flows conceptually and recognize when spot rates matter.
- Identify how parallel and non-parallel curve shifts affect different maturities and adjust allocation accordingly.
- Distinguish clean price and dirty price when interpreting trade confirmations in a case.
- Evaluate whether pricing implies unusual assumptions (e.g., high default risk) and decide on next checks.
- Justify a valuation-driven decision while staying within client IPS constraints and risk limits.
- Communicate term-structure effects to clients using intuitive examples and balanced language.
Chapter 11 - Analysis of Debt Securities II: Price Volatility and Investment Strategies
- Estimate price impact of a yield change using duration and choose risk-control actions.
- Compare ladder, barbell, and bullet strategies in a case and select the best fit for the client.
- Adjust portfolio duration to match liabilities or investment horizon using immunization logic.
- Recognize negative convexity in bonds with embedded options and adapt the strategy accordingly.
- Balance yield enhancement against interest-rate risk reduction and justify the chosen trade-off.
- Decide when to rebalance fixed-income holdings after rate moves based on policy thresholds.
- Evaluate reinvestment risk versus price risk when selecting maturity exposures in a vignette.
- Interpret duration and convexity metrics in a report and identify the portfolio’s key exposures.
- Recommend a conceptual hedging approach for rate risk and note costs and limitations.
- Document the fixed-income strategy rationale and the monitoring triggers that would cause changes.
Managed Products (14%)
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Chapter 12 - Analyzing Conventionally Managed Products
- Select a managed product type (mutual fund, closed-end fund, wrap) appropriate to a client scenario.
- Evaluate fees and turnover and choose the option with a better expected net outcome.
- Identify when a closed-end fund premium or discount changes suitability and expected return.
- Choose due diligence questions to ask before recommending a fund (mandate, risks, liquidity, and fees).
- Recognize style drift or mandate mismatch and decide whether to replace a product.
- Incorporate tax considerations (distributions and after-tax returns) into product selection decisions.
- Recommend an overlay approach conceptually (e.g., currency hedging) when consistent with policy.
- Explain to a client how fees and turnover reduce net returns using a simple example.
- Avoid performance chasing by applying a repeatable selection process and documenting rationale.
- Set monitoring triggers for managed products (manager changes, risk drift, and persistent underperformance).
Chapter 13 - Analyzing Non-Conventional Asset Classes and Their Structures
- Determine whether alternatives are suitable given a client’s risk profile, horizon, and liquidity constraints.
- Choose an appropriate access vehicle for alternatives given transparency, liquidity, and fee trade-offs.
- Identify key risks in hedge funds, commodities, real estate, or private market exposures and decide on disclosures.
- Evaluate liquidity terms and lockups and decide whether they fit the client’s needs.
- Assess leverage and valuation risks in alternatives and decide on position sizing or avoidance.
- Recommend diversification within alternatives to reduce concentration in a case scenario.
- Recognize when digital assets introduce custody or operational risks that may be unacceptable for the client.
- Explain, in plain language, why alternatives can behave differently from traditional assets (drivers of return).
- Consider how producers’ hedging relates to commodity exposure conceptually in a vignette.
- Document due diligence, suitability rationale, and key structural risks for alternative allocations.
International Investing, Investment Risk and Impediments to Wealth Accumulation (16%)
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Chapter 14 - International Investing
- Decide whether to increase international allocation based on diversification benefit and client constraints.
- Choose appropriate region or market exposure (developed versus emerging) given risk and objective cues in a vignette.
- Assess currency risk and decide whether to hedge given horizon, volatility tolerance, and policy constraints.
- Select an appropriate vehicle for foreign exposure based on costs, liquidity, and tax considerations conceptually.
- Interpret benchmark comparisons and determine whether performance differences are driven by currency or market returns.
- Identify political or regulatory risk cues and decide whether to limit exposure or adjust position sizing.
- Evaluate whether model assumptions fit the scenario and adjust international exposure conservatively when uncertain.
- Explain international diversification benefits and risks to a client using balanced, non-promotional language.
- Recognize home bias in a case and propose a gradual diversification plan that maintains client comfort.
- Document the rationale for international exposure and monitoring triggers (currency moves and risk events).
Chapter 15 - International Taxation
- Identify when withholding tax will apply in an international investment scenario and estimate the impact.
- Choose between investment vehicles or accounts to reduce double taxation risk conceptually.
- Recognize when treaty benefits or tax credits may apply and when verification is required before advising.
- Distinguish source versus residence tax implications at a high level in a vignette.
- Explain to a client why after-tax returns differ across jurisdictions using clear language.
- Flag situations that require escalation to tax specialists rather than offering unverified tax advice.
- Evaluate whether a tax drag changes the attractiveness of an investment relative to alternatives.
- Incorporate taxation as a constraint when recommending international investments in a case scenario.
- Document tax-related assumptions and disclosures used in the recommendation.
- Avoid definitive tax promises by selecting compliant, appropriately qualified wording.
Chapter 16 - Managing Your Client's Investment Risk
- Diagnose main risk exposures in a client portfolio (market, credit, currency, liquidity, concentration) from a vignette.
- Choose risk measures to monitor that match the scenario (volatility, beta, and other metrics) at a high level.
- Recommend diversification adjustments to reduce risk while respecting constraints and required return.
- Select an appropriate hedging tool conceptually (options, futures, CFDs) and justify the choice.
- Recognize leverage and counterparty risks and decide when a hedging instrument is unsuitable.
- Estimate hedge size or exposure using simple intuition and check whether results are reasonable.
- Balance hedge cost against protection level and choose trade-offs consistent with client objectives.
- Identify when complexity exceeds client understanding and recommend simpler risk controls.
- Document risk-management rationale and the disclosures needed to support informed consent.
- Set monitoring triggers for risk management actions (expiry, margin, volatility changes).
Chapter 17 - Impediments to Wealth Accumulation
- Diagnose which impediments are most damaging in a client’s case (fees, taxes, inflation, behaviour).
- Recommend cost-reduction actions and quantify potential impact on long-term wealth using simple examples.
- Recommend tax-minimization tactics conceptually (asset location, loss realization) while staying within constraints.
- Choose tax-efficient investments appropriate to the client’s situation at a high level.
- Recommend inflation protection steps when relevant and consistent with the client’s objectives.
- Identify behavioural pitfalls in a vignette and recommend process controls (automation and rebalancing discipline).
- Explain the compounding impact of small net-return differences to a client using a simple illustration.
- Evaluate whether leverage is appropriate or too risky given risk capacity and time horizon cues.
- Prioritize an action plan that balances quick wins with long-term process improvements.
- Document changes, expected benefits, and a monitoring plan that reinforces disciplined behaviour.
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- Build a monitoring checklist for a client portfolio (drift, risk, liquidity, and suitability).
- Decide when and how to rebalance based on thresholds or schedule in a case scenario.
- Choose the appropriate return metric for a vignette (time-weighted versus money-weighted) conceptually.
- Select an appropriate benchmark and explain the choice in client-friendly terms.
- Identify whether underperformance is likely due to allocation, selection, costs, or market regime conceptually.
- Use risk-adjusted metrics at a high level to judge whether performance compensates for risk taken.
- Recognize evaluation pitfalls (short timeframes and inappropriate benchmarks) and avoid incorrect conclusions.
- Choose how to communicate performance results and next steps with balanced wording and clear actions.
- Decide whether changed circumstances require an IPS or risk-profile update in a scenario.
- Document performance review decisions and follow-up actions in a clear, regulator-friendly way.
Tip: In vignette questions, the best answer is often the one that (1) respects constraints, (2) improves documentation/process, and (3) uses the simplest tool that solves the client’s problem.
Sources: https://www.csi.ca/en/learning/courses/imt/curriculum and https://www.csi.ca/en/learning/courses/imt/exam-credits