Canadian Securities Course (CSC) Practice Exam

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What do Interest-rate linked GICs offer?

Coupon rate linked interest
Minimum contributions made regularly
Return of the initial investment at expiry
Interest rates linked to other rates

The correct answer is: Interest rates linked to other rates

Interest-rate linked GICs offer a variable interest rate that is tied to other rates such as the prime rate or Treasury bill rates. This means that the return on the GIC can fluctuate based on changes in these linked rates. Option A is incorrect because "coupon rate" refers to the interest rate on a fixed-income security, not a variable rate. Option B is incorrect because regular contributions are not a feature of GICs, which are typically purchased with a lump sum. Option C is incorrect because all GICs offer a return of the initial investment at expiry, regardless of the interest rate structure.