Canadian Securities Course (CSC) Level 2 Practice Exam

Which type of clients are primarily serviced by the buy side according to the provided text?

1. Institutional clients

2. Individual clients

3. Corporate clients

4. Retail clients

The correct answer is: Institutional clients

The correct choice highlights that the buy side primarily services institutional clients. These clients include entities like pension funds, mutual funds, hedge funds, and insurance companies that make large-scale investments in various securities. The buy side focuses on asset management and investment strategies aimed at achieving higher returns for their clients. Institutional clients are characterized by their significant capital and long-term investment goals, which aligns well with the services provided by the buy side. They require specialized services and advice, which the buy side firms are equipped to deliver. While individual, corporate, and retail clients may interact with financial markets, they typically do not represent the primary focus of the buy side's investment activities. Individual and retail clients tend to deal more with the sell side of the market, accessing products and information, whereas the buy side is centered around managing large portfolios for institutions.