Primary market. This is the market where a company issues new shares to raise capital, such as through an IPO. The company receives the proceeds from the sale, with underwriters helping set the price and allocate shares. Once issued, those shares move into the secondary market, where existing shares are traded among investors. The open-end fund is a mutual fund product, not a company issuing its own shares, and the over-the-counter market refers to trading that often occurs outside formal exchanges and is still generally secondary market activity. So issuing new shares to raise capital for the first time happens in the primary market.

Fund prospectuses must provide a complete, clear overview of the investment to help investors assess suitability. The most important elements are the fund’s objectives and strategies, so you know what the fund aims to achieve and how it plans to pursue it. It must also lay out the risks, so you can understand the potential downsides and how volatile or uncertain returns could be. Performance data allows you to gauge historical results, while fees and expenses reveal the cost of investing and how it can erode returns. Identifying the fund manager and related parties is essential for accountability and transparency. In addition, other material disclosures cover information regulators require to understand the fund’s operations, liquidity, taxation implications, voting rights, conflicts of interest, and any policies or practices relevant to investors. These components together form the comprehensive picture investors rely on when deciding whether to invest. Marketing materials are separate from the prospectus and can be promotional in nature, not a substitute for the full disclosure. A dividend distribution policy alone does not provide the wide-ranging information needed to assess the investment.

Currency risk in global funds comes from the fact that assets held outside Canada are priced in foreign currencies. When those currencies move relative to the Canadian dollar, the value of the fund’s non-CAD assets in CAD terms changes, affecting returns. This risk is present even if a fund is global, because foreign currency fluctuations can add or subtract from performance measured in CAD. Hedging is the tool used to control this risk. It can reduce uncertainty by locking in exchange rates, but it also adds costs and can cause tracking error if the hedge doesn’t perfectly match the fund’s exposure. So currency risk exists and hedging can either mitigate it or introduce additional costs. The other statements aren’t correct because currency risk is not limited to domestic funds, it does matter for global funds, and currency movements do not guarantee higher returns—there can be losses if movements go the wrong way or if hedging costs erode gains.

Leading indicators are measures that tend to move before the overall economy changes, signaling where the business cycle is headed next. They provide forward-looking signals about expansion or contraction. Stock prices, money supply, housing starts, and new orders fit this role well because they reflect anticipation of future demand: rising stock prices and a growing money supply suggest stronger spending ahead; more housing starts point to upcoming construction activity; rising new orders indicate forthcoming production. In contrast, coincident indicators move with the current level of economic activity, and lagging indicators confirm trends after they’ve begun. Monetary policy isn’t an indicator itself; it’s tools and actions that influence the economy rather than precede it. So the term that best fits a predictive economic indicator is leading indicators.