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CIFC Sample Questions Answers

Questions 4

Josephine is a Dealing Representative with Sunshine Mutual Funds Inc. for over 10 years. Her brother Jonathan has an account with Sunshine Mutual Funds Inc., too. Jonathan wants Josephine to manage his

portfolio and make investment decisions on his behalf. Jonathan trusts his sister to make better investment choices than he can. He also wants to give Power of Attorney (POA) to Josephine so she can have full authority over his account.

How can Josephine respond to her brother's request?

Options:

A.

Josephine can accept a limited POA.

B.

Josephine cannot accept the POA as she is not the immediate family.

C.

Josephine can accept the POA as it is an exception that is permitted under the MFDA rules.

D.

Josephine should accept the POA after making a full disclosure to her dealer about the POA.

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Questions 5

Your clients, Jessica and Ken, want to buy a house next year. You recommend a money market fund. How do you think a money market fund will help Jessica and Ken reach their goal?

Options:

A.

Money market funds are safe investments because their net asset value per unit does not usually fluctuate.

B.

Money market funds provide high returns without risking the capital invested.

C.

Money market funds pay income weekly which can be automatically reinvested.

D.

Money market funds provide investors a guaranteed fixed rate of return.

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Questions 6

Exchange traded funds (ETFs) that track an index and index mutual funds have many similarities. However, what is a major difference between these two products?

Options:

A.

While ETFs are prone to tracking errors, index funds are perfectly aligned with their underlying index.

B.

ETFs can be purchased continuously throughout the trading day while index funds can only be bought or sold at the end of the day.

C.

The market price of ETFs always matches the underlying basket of securities while there can be a discrepancy in pricing index funds.

D.

ETFs do not have management fees since they are exchange traded while index funds do incur such fees.

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Questions 7

Which information is typically included in the Letter of Engagement?

Options:

A.

Client's responsibilities

B.

Process for complaints

C.

Investment Objective

D.

Payee for deposits

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Questions 8

Marta is turning 71 years old this year. She will have to convert her registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF). Which of the following statements is TRUE?

Options:

A.

She will be able to continue contributing to her RRIF and be subject to the same annual limits as her RRSP.

B.

When she converts her RRSP to a RRIF, she will incur a tax liability.

C.

She will be subject to annual maximum withdrawal limits.

D.

She does not have to withdraw the minimum amount this year.

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Questions 9

What is the role of a custodian?

Options:

A.

to ensure safekeeping of all the securities in the portfolio

B.

to oversee the general administration of the mutual fund

C.

to construct and manage the portfolio of investments

D.

to calculate the daily net asset value per unit (NAVPU) of the mutual fund

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Questions 10

Jabir recently joined Prosper Wealth Inc. and is looking forward to being a Dealing Representative for the firm. Which of the following statements CORRECTLY describe when Jabir will be eligible to open new

client accounts and sell investments?

Options:

A.

Upon registration application by the dealer

B.

Upon employment with the dealer

C.

Upon formal confirmation from the regulator

D.

Upon passing the proficiency course

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Questions 11

Pippa purchased a 15-year bond with a face value of $5,000 and a 7% coupon rate at the time of issuance. The bond is due to mature later this year. The general interest rate climate remained stable for the first 13 years of the bond's term. However, especially over the past 18 months, both inflation and general interest rates have increased more than expected.

What is Pippa likely to experience from her bond?

Options:

A.

With the unanticipated rise in inflation, Pippa will benefit from a higher real rate of return as well.

B.

Due to inflation, Pippa will experience a capital loss once her bond reaches maturity.

C.

The return of investment capital will have lower purchasing power than prior to investing.

D.

With capital appreciation at 7% annually, Pippa's capital gain will be reduced by inflation at maturity.

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Questions 12

For what reason do different entities have securities created and sold?

Options:

A.

Government debt is reduced due to the capital that is received from investors when their securities are purchased.

B.

When common shares are initially sold, the capital raised will increase the issuing corporation's retained earnings.

C.

Governments can address financial needs and support initiatives when securities are first sold.

D.

The issuance of securities is a method used by corporations to redistribute their wealth to investors to lower taxes.

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Questions 13

Which of the followings describes segregated funds?

Options:

A.

Segregated funds have high returns, high management fees, and cannot be redeemed until the maturity date of the contract.

B.

Segregated funds flow through capital losses to investors because the investors are the owners of the underlying fund.

C.

Segregated funds offer some protection of the capital invested but there is an added cost for the protection.

D.

Segregated funds are subject to securities regulation because they are distributed by mutual fund dealing representatives.

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Questions 14

Taylor is chatting with other parents in the park when the conversation turns to registered education savings plans (RESPs). Taylor thinks that most of what they are saying is incorrect. Which of the following

statements about self-directed RESPs is TRUE?

Options:

A.

The government contributes an additional grant for low income families who qualify.

B.

Only one beneficiary may be named per RESP.

C.

Educational Assistance Payments (EAPs) may only be used for tuition for a post-secondary program.

D.

Educational Assistance Payments (EAPs) withdrawn from the plan are not taxable.

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Questions 15

Which of the following statements is TRUE about the movement of business cycles in the Canadian economy?

Options:

A.

A period of economic expansion is followed by a period of economic contraction.

B.

A period of economic expansion is of the same length in every cycle.

C.

A period of economic expansion is always of the same length as a period of economic contraction.

D.

A period of at least 3 consecutive months of contraction is called a recession.

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Questions 16

Which of the following could be a passively managed fund?

Options:

A.

commodity pool

B.

exchange traded fund (ETF)

C.

hedge fund

D.

labour-sponsored investment fund

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Questions 17

Which of the following statement about Exchange Traded Funds (ETFs) is TRUE?

Options:

A.

Usually the market price of an ETF is the net asset value per unit (NAVPU) of the Fund on that day.

B.

Investors may sell their ETFs in the stock market or redeem them through the Fund at the NAVPU of the day.

C.

ETFs have lower MERs compared to mutual funds.

D.

All ETFs are actively managed.

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Questions 18

In which of the following situations would the client mobility exemption apply?

Options:

A.

Olaf is a registered dealing representative in Sunnyside, Prince Edward Island. His client Jules is moving to Moncton, New Brunswick. Olaf's mutual fund dealer is not currently registered in New Brunswick but is in the process of applying there.

B.

Sigrid's brother-in-law has agreed to be her client. She is a registered dealing representative in Ottawa, Ontario and he lives in Hull, Quebec. Both Sigrid and her mutual fund dealer are currently registered in Quebec.

C.

Although her mutual fund dealer is registered in all provinces and territories, Lori is only registered as a dealing representative in Saskatchewan. Last year, three of Lori's clients moved to Alberta and now two more are moving to that province. Lori wants to continue servicing these clients.

D.

Karl is a registered dealing representative in Dauphin, Manitoba. 30 of his clients who work for the same company are being relocated to British Columbia. He wants to retain these clients. His mutual fund dealer is registered in British Columbia, but Karl is not.

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Questions 19

Reginald is a Dealing Representative, who feels pressure from management at the beginning of every calendar year, to open new registered retirement savings plans (RRSPs) and generate RRSP contributions. It is the end of February, and Reginald is close to reaching his personal sales objectives. He just finished an appointment with a prospective new client, Orel. Orel wants to open a tax-free savings account (TFSA) to build emergency savings. However, Reginald recommended to Orel that he should first contribute to an RRSP, and then use the tax savings for a TFSA contribution. With regards to account suitability, what can be said about Reginald's advice?

Options:

A.

Reginald is putting the client's interest first by informing Orel why he should change his investment strategy.

B.

Based on Orel's stated need, recommending an RRSP contribution is unsuitable.

C.

Recommending an investment solution that addresses two needs, is putting Reginald's client's interest first.

D.

By convincing Orel to contribute to an RRSP, instead of a TFSA, Reginald has put his client's interest first.

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Questions 20

Which of the following qualifies as personal information under the Personal Information Protection and Electronic Documents Act (PIPEDA)?

Options:

A.

employee's business address

B.

employee's name

C.

employee's credit record

D.

employee's business telephone number

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Questions 21

Loretta is looking for a well diversified equity fund. Her ideal mutual fund would hold investments within and outside Canada. Although she is seeking growth, Loretta also wants a mutual fund that invests in quality companies.

Which of the following mutual funds would be the best choice for Loretta?

Options:

A.

Dominion International Growth Fund - this international equity fund invests in small and medium sized companies in countries all around the world.

B.

Polar Global Blue Chip Equity Fund - this global equity fund invests in large, established companies in mostly stable and mature foreign markets.

C.

Lennox Energy Fund - this sector fund invests primarily in Canadian oil and gas companies that sell both to domestic and foreign markets.

D.

Auric Precious Metals Fund - this sector fund invests in Canadian companies that participate in the precious metals sector such as owning mines in foreign countries.

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Questions 22

What trait or characteristic is normally associated with a person who would be designated as a Trusted Contact Person (TCP)?

Options:

A.

Normally has a financial interest in the client's account or assets.

B.

Often involved with providing care for the client who requires personal assistance.

C.

Has the authority to make financial decisions on behalf of the client.

D.

Can simplify difficult financial concepts for the client.

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Questions 23

Xerxes, 45 years old, is a successful architect, having an annual income of $185,000. He has around $10,000 in his non-registered account, which he is looking to invest in a tax-efficient manner.

From the following options, which would be the most tax-efficient?

Options:

A.

target date fund

B.

bond fund

C.

asset allocation fund

D.

Canadian equity index fund

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Questions 24

Your employer has a contributory group RRSP under which he matches employee contributions, up to a maximum of 5% of salary.

Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

Options:

A.

It is more costly and time consuming to administer than traditional pension plans.

B.

If you leave your employer, your group RRSP stays with the employer.

C.

You need to wait until you file your taxes to receive your contribution tax deduction.

D.

The employer chooses the plan provider.

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Questions 25

Maxine is a portfolio manager who 15 years ago, purchased 100 shares of Never2Tacky, a social media corporation for Aspirations Global Technology Fund. She purchased the stock when it was trading at $10. Last year, the peak market price was $120. Presently, it is trading at $99. News agencies are now reporting that additional regulations regarding social media companies are about to be agreed upon by G7 countries. Maxine is concerned the market value of Never2Tacky is going to drop. She buys a put option with an exercise price of $95 with an expiry of 9 months.

What type of strategy is Maxine using?

Options:

A.

Speculating

B.

Modern portfolio theory

C.

Passively managing

D.

Hedging

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Questions 26

Frederic recently sold his units in a US dollar (USD) denominated mutual fund. He wants to convert the proceeds back to Canadian dollars (CAD). If he received proceeds of $1,200 USD from the sale and the exchange rate is $1 CAD for $0.99 USD, how much will Frederic receive in Canadian dollars?

Options:

A.

$1-188.00

B.

$1,200.00

C.

$1, 12.12

D.

$1,320.00

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Questions 27

During the calendar year, Firmansyah received a $1,800 eligible dividend from a large Canadian bank and a foreign, dividend from his The USD/CAD exchange rates is 1.3605.

Firmansyah’s federal marginal tax bracket is 29%. The enhanced dividend gross-up rate is 38% and the federal dividend tax credit rate for eligible dividends is 15%.

What federal tax liability will be due from the investment income?

Options:

A.

$522.00

B.

$348.00

C.

$695.76

D.

$870.00

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Questions 28

Reagan has accepted a role to be the Chief Revenue Officer of a charitable organization. She is currently registered as a Dealing Representative for Sunshine Financial Services.

Which of the following would apply to her?

Options:

A.

The dealer will closely monitor her sales activities to ensure any clients from the charity are not getting a discount on potential fees.

B.

Holding both positions at the same time is a violation of securities industry rules and regulations .

C.

Reagan is not required to inform her dealer of this outside activity if none of her colleagues from the charity become clients.

D.

The regulator will limit her from providing financial services to anyone associated with the charity.

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Questions 29

Which among the following BEST describes a company's retained earnings statement?

Options:

A.

a company's financial position at a specific point in time

B.

the amount of money contributed to the company by its shareholders or owners

C.

the amount of profit that is reinvested in the company

D.

the earnings and expenses of a business over a period of time

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Questions 30

You are collecting know your client (KYC) information for your new client, Yael. She has recently accepted an early retirement package from her employer and has $100,000 to invest. She is looking for an investment that will provide income to help pay her ongoing monthly expenses. Without this extra income, she would have trouble paying her bills. From your discussions, Yael understands that markets fluctuate and says she is comfortable with high risk. Which of the following would be a suitable investment?

Options:

A.

global equity fund

B.

money market fund

C.

mortgage fund

D.

Canadian equity index fund

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Questions 31

Which statement about a net capital loss incurred by a mutual fund trust is CORRECT?

Options:

A.

A net capital loss is passed on to the unit holders by the mutual fund in the year it occurs.

B.

A net capital loss is permitted to be carried forward by the mutual fund for up to 3 years.

C.

A net capital loss is permitted to be carried forward indefinitely by the mutual fund.

D.

A net capital loss is permitted to be carried back indefinitely by the mutual fund.

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Questions 32

Which of the following best describes how a target date fund works?

Options:

A.

Through the years, the asset allocation shifts from equities towards fixed income as the maturity date approaches.

B.

Through the years, the asset allocation shifts from fixed income towards equities as the maturity date approaches.

C.

The mutual fund is constantly rebalanced to maintain an even split between equities and fixed income through the life of the mutual fund.

D.

In exchange for a lump-sum purchase the unitholder receives guaranteed monthly payments for life.

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Questions 33

Sylvia decided to use the savings from her bank account to purchase a 5-year bond. The face value of the bond is $10,000, the market price is $9,230 and the coupon rate is 7%.

What is the current yield on the bond? Round to 2 decimal places.

Options:

A.

7.00%

B.

7.25%

C.

7.58%

D.

7.75%

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Questions 34

You are meeting a new client, Steven, and you are trying to determine his level of understanding of different investments. Which question would give you the most information regarding your client's familiarity with investing?

Options:

A.

Do you want to minimize taxes from your investments?

B.

What rate of return do you expect from investing?

C.

Do you understand the relationship between risk and return?

D.

Do you have the resources to invest for the long-term?

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Questions 35

Which of the following form part of the disclosure documents relating to mutual funds?

Options:

A.

balance sheet, income and cash flow statements of the portfolio management company

B.

statement of net assets, annual information form, management reports of fund performance

C.

annual proxy voting record, audited financial statements, and proof of registration

D.

new account information form, quarterly financial statements, and security certification

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Questions 36

The portfolio manager of the High Income Fund has 90% of the mutual fund invested in bonds. What is a reason for holding bonds in a mutual fund portfolio?

Options:

A.

Bonds provide regular interest income which can be flowed out directly to investors.

B.

Bonds produce regular capital gain payments which result in preferential tax treatment for unitholders.

C.

Coupon payments paid by bonds from large Canadian corporations are eligible for preferential tax treatment.

D.

To increase the dividend yield and credit quality of the mutual fund

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Questions 37

Dakota is a Dealing Representative with Harvest Wealth Inc., a mutual fund dealer. Dakota starts a marketing campaign to contact prospective new clients and increase sales with existing clients. Which of the following CORRECTLY describes activities that Dakota can engage in under her marketing campaign?

Options:

A.

Dakota can make telemarketing calls to clients who are listed on the National Do Not Call List

B.

Dakota can send promotional emails to clients who have opted into Harvest Wealth's Do Not Call List

C.

Dakota can send promotional emails to clients who have opted in to receive commercial electronic messages (CEMs).

D.

Dakota can make telemarketing calls to clients who have opted in to receive commercial electronic messages (CEMs).

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Questions 38

Xian-Li believes she is a sophisticated investor. She has constructed her own portfolio and has had some success. She does not believe in studying a company’s details such as earnings, expenses, or assets. She is more concerned with patterns in a company’s stock price over time. She believes patterns form and can be used to predict future movements in the market.

How does Xian-Li evaluate the companies in her portfolio?

Options:

A.

fundamental analysis

B.

flowchart analysis

C.

technical analysis

D.

value analysis

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Questions 39

What do Guaranteed Income Supplement (GIS) and Allowance for the Survivor have in common?

Options:

A.

ability to defer benefits

B.

benefits start at the age of 65

C.

eligibility depends on income level

D.

benefit amounts depend on individual contribution

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Questions 40

Grant is a Dealing Representative with WealthPlus Securities Inc. Grant becomes a volunteer member of his local arena's Hockey Association and is appointed as the Association's new Treasurer. Which of the

following statements about Grant's appointment as Treasurer is CORRECT?

Options:

A.

If Grant is not compensated for the Treasurer position, his firm's approval is not required.

B.

Grant must obtain the firm's approval before he starts the Treasurer position.

C.

Since Grant holds the Treasurer position on a voluntary basis, it is not an outside activity.

D.

Grant must disclose the Treasurer position to his firm once he has accepted the position.

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Questions 41

One of your clients, Fernando, is approaching 71 years of age and has a few questions regarding life income funds (LIFs).

Which of the following statements about LIFs is TRUE?

Options:

A.

Fernando may make contributions to his LIF if he continues working.

B.

Fernando is free to withdraw any amount from his LIF above the minimum amount.

C.

Fernando can transfer money from his registered retirement savings plan (RRSP) to a LIF.

D.

Fernando can transfer money from his locked-in retirement account (LIRA) to a LIF.

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Questions 42

Sujay contributes 3% of his $60,000 salary to his employer’s defined contribution pension plan. His employer contributes the same amount to the plan. How will this affect his registered retirement savings plan (RRSP) contribution room for the year?

Options:

A.

It will have no effect. RRSP contribution room is based on earned income only.

B.

It will reduce Suiay's contribution room by 51,800.

C.

It will reduce Suiay's contribution room by $1800

D.

It will reduce Suiay's contribution room by $3,600.

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Questions 43

You are meeting a potential client, William, for the first time. He is a high net worth individual and you are keen to get his business. Which of the following would you consider the most important to create an impressive first impression on your potential client?

Options:

A.

your body language

B.

volume of your voice

C.

your words

D.

tone of your voice

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Questions 44

Which of the following Dealing Representatives has fulfilled their "Know Your Product" obligation?

Options:

A.

Godfried opens an account for his new client, Nadia. When the investments from her previous dealer are transferred in, Godfried sells the investments. Nadia becomes very upset when she is charged $4,329 in redemption fees that neither she nor Godfried expected.

B.

Otev meets with his client, Saeed. Saeed's brother invested in the Navigator Eastern Asia Fund and it provided great returns. When Saeed asks Otev if the Navigator Fund or something similar is available through his firm, Otev doesn't know and doesn't look it up.

C.

Rehan reviews the features of the Hedge Fund that her client, Georgi, wants to buy. When Rehan explains the product to Georgi, she tells him that the Hedge Fund has a lock-up period and he will not be able to redeem the fund if he needs the money.

D.

Tevy recommends the firm's in-house Principal Protected Note (PPN) to her client Mei. Since Mei is seeking safety and liquidity, Tevy determines that the PPN is a good product for her because it's on the firm's list and the principal is guaranteed.

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Questions 45

Which of the following Dealing Representatives has CORRECTLY fulfilled their suitability obligation?

Options:

A.

Clarence determines that the Absolute Alternative Fund is suitable for all of his clients. Clarence believes that all investors need alternative funds in order to be properly diversified.

B.

Kiri recommends the Conservative Bond Fund to his client, Myrtle. The fund generates income and Myrtle's investment objective is "income" on her Know Your Client (KYC) form.

C.

Li Ming recommends the Venturex Labour-Sponsored Fund to her client, Park. While Park has low tolerance and capacity for risk, Li Ming provides detailed disclosure which explains the fund's risks.

D.

Roderik determines that the model portfolio he has developed will be suitable for all of his clients. Roderik has included investments with both income and growth to appeal to all investors.

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Questions 46

Khuyen is a Dealing Representative for Stark Contrast Investments. Her dealer has relationships with 20 different mutual fund families. This gave her the flexibility to sell two different types of funds from two

different fund families to her client, Bao. $5,000 was invested in the Blue Moon Global Balanced fund and an additional $5,000 was invested in the Orange Sun Asset Allocation fund. Khuyen has been

reviewing the performance of both funds and has determined that Bao would be better off being fully invested in the Blue Moon Global Balance fund. Bao had previously signed a Limited Authorization Form

(LAF) for Khuyen, so she goes ahead and does not worry about consulting with Bao before making the change.

What type of activity has Khuyen performed?

Options:

A.

Top-down management

B.

Churning

C.

Discretionary trading

D.

Value investing

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Questions 47

Ayan wants to make a registered retirement savings plan (RRSP) contribution and deduct it from his Year 1 income. What is the deadline for this contribution (assume that it is NOT a leap year)?

Options:

A.

March 1, Year 1

B.

March 1, Year 2

C.

December 31, Year 1

D.

December 31, Year 2

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Questions 48

Xerxes, 45 years old, is a successful architect, having an annual income of $185,000. He has around $10,000 in his non-registered account, which he is looking to invest in a tax-efficient manner.

From the following options, which would be the most tax-efficient?

Options:

A.

bond fund

B.

Canadian equity index fund

C.

asset allocation fund

D.

target date fund

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Questions 49

Sandra presently participates in her employer-sponsored defined contribution pension plan (DCPP). As contributions continue to be made into her plan, what can she expect?

Options:

A.

Retirement benefits will be based on a prescribed formula that can be referenced from the plan's terms and conditions.

B.

The employer will solely make contributions to her DCPP based on a prescribed formula noted within her plan.

C.

Her available registered retirement savings plan (RRSP) contribution room will be reduced by what is being contributed to her plan.

D.

To ensure she has savings at retirement, the employer will choose stable investments to grow her retirement savings.

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Questions 50

What does a normal yield curve look like?

Options:

A.

slopes upward to the left

B.

is flat and has no slope

C.

slopes down to the right

D.

slopes upward to the right

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Questions 51

Karen’s know your client (KYC) profile corresponds to someone who has a long time horizon, is comfortable with risk and volatility, and is primarily interested in growth. She watches the daily movements of the Toronto Stock Exchange (TSX) and wants a mutual fund that will closely match what she sees.

What kind of mutual fund would be BEST for her?

Options:

A.

Canadian small capitalization equity fund

B.

Canadian equity index fund

C.

Canadian dividend fund

D.

Canadian bond fund

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Questions 52

Quintin has been a Dealing Representative for Global Maximum Financial for 5 years. Today, he opened an account for his new client, Reginald. In addition to opening a new account, Reginald agreed to

accept Quintin's investment recommendation and placed a purchase order to buy units of the Global Maximum Value Equity fund.

Quintin informed his Branch Manager Lupita about this new account on the same day the purchase order was received. Lupita told Quintin that she would complete her review of the New Client Application Form (NCAF) by no later than tomorrow.

Which statement regarding this new account opening is CORRECT?

Options:

A.

Quintin cannot accept purchase orders from a client until Lupita completes her review of the NCAF.

B.

Lupita has two business days from the date of opening the new account to approve the NCAF completed by Quintin.

C.

Quintin and Lupita are both following proper procedure regarding new account openings and purchase orders.

D.

Unless Quintin is presently under probation, he does not need Lupita's approval regarding the NCAF.

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Questions 53

Over the course of a couple of weeks and several appointments, Harold was finally able to provide an investment solution for his new client, Felicia. It was a lump sum investment where they plan to see her

money grow for the next 5 years.

With regards to Know Your Client (KYC) requirements, what are Harold's responsibilities moving forward?

Options:

A.

Monitor investment performance to determine if the investment solution is on track to satisfy Felicia's financial needs.

B.

There are no other responsibilities for Harold to fulfill until the time horizon has been reached for this investment solution.

C.

Within 36 months of the implementation of the investment, Harold must review the KYC to ensure it is current.

D.

KYC does not need to be revisited or revised until there is a need to conduct additional trades for Felicia's account.

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Questions 54

Hamid, the portfolio manager of the Trabant Canadian Equity Fund is deciding on some new investments. He has identified a retirement residence company as well as a discount clothing retailer that both seem to have good prospects and appear undervalued. What investment approach is Hamid using?

Options:

A.

top-down

B.

bottom-up

C.

growth at a reasonable price

D.

technical investing

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Questions 55

Which of the following characteristics about mortgage mutual funds is CORRECT?

Options:

A.

typically monthly distributions of interest

B.

if interest rates fall, the mutual fund's net asset value per unit (NAVPU) will decline

C.

suitable only for high risk investors

D.

risk-free where the mortgages are National Housing Act (NHA) insured

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Questions 56

Kerry's total income this past year was $100,000 and she claimed a tax deduction of $2,000. When the tax return is filed, what would be the federal tax payable when applying the following federal tax rates?

(Round to the closest whole dollar for the final answer.)

Options:

A.

$17,472

B.

$18,754

C.

$24,000

D.

$25,480

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Questions 57

Ai Fen has recently become registered to sell mutual funds with Acadian Eastern Financial, a mutual fund dealer. Ai Fen determined that with her background of being a Chartered Financial Analyst, she can help people understand the nature of investing more easily than others in her field.

Which registration category will need to be prominently noted on Ai Fen’s business card to comply with the “holding out rule”?

Options:

A.

Dealing Representative

B.

Registered Representative

C.

Investment Representative

D.

Chartered Financial Analyst

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Questions 58

What statement CORRECTLY describes a key difference between bonds and debentures?

Options:

A.

Regular secured bonds offer a higher level of income than debentures.

B.

Bonds are secured by the specific assets of a company whereas debentures are not secured by real assets or collateral.

C.

Debentures have higher priority than bondholders for the company's assets in the event that the company goes bankrupt.

D.

Debentures are considered high risk because they are not backed by the reputation or credit worthiness of the issuer.

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Questions 59

On January 3, John invests $500 in the Blue Sky U.S. Equity Fund. On July 1 of the same year, he invests another $500 into the same mutual fund. Information about the net asset value per unit (NAVPU) at the time of each transaction is provided below. Given this information, what will be the value of John's investment on December 31 of this year (please ignore transaction costs and distributions)?

Options:

A.

$1,198

B.

$1,216

C.

$1,256

D.

$1,332

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Questions 60

Which of the following are obligations on mutual fund dealing representatives imposed by The Proceeds of Crime (Money Laundering) and Terrorist Financing Act?

Options:

A.

record-keeping of large transactions, account-related information, and other relevant records

B.

reporting all financial transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

C.

enhancing public awareness of matters related to money laundering and terrorist financing

D.

confirming client identity each time before concluding any transaction

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Questions 61

Sonya meets with her client Elijah to review different investment approaches that could be offered to help him reach his financial goals. Part of that discussion included Sonya mentioning factors such as

inflation, interest rates, and rates of return. Which stage of the Strategic Investment Planning (SIP) process does this describe?

Options:

A.

Clarify Client Status, Problems and Opportunities

B.

Identify Strategies and Present the Plan

C.

Implement the Plan

D.

Monitor and Update

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Questions 62

Evan owns retractable preferred shares of Ingram Corp. Which statement CORRECTLY describes a key feature of Evan's shares?

Options:

A.

Gives Evan the option to convert the Ingram Corp preferred shares into a fixed number of common shares at a predetermined price within a specified period.

B.

Offers Evan the opportunity to receive additional dividends if Ingram Corp's profit exceeds a stated level.

C.

Entitles Evan to sell the shares back to Ingram Corp at a pre-determined price and time in the future.

D.

Allows Ingram Corp to buy back the preferred shares at a pre-determined price within a defined period.

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Questions 63

Michael had invested in several mutual funds, most of which have appreciated in value. He is not sure if he needs to report the gain as capital gains when he files his income tax return.

What would you tell Michael?

Options:

A.

Capital gains are taxed when they are realized.

B.

He has to report any unrealized capital gains each year.

C.

Capital gains are taxed only on equity mutual funds.

D.

Capital gains are not subject to tax.

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Questions 64

Which among the following plans includes a provision that places a maximum limit on the amount that can be withdrawn during a calendar year?

Options:

A.

Life Income Fund (LIF)

B.

Registered Retirement Savings Plan (RRSP)

C.

Registered Retirement Income Fund (RRIF)

D.

Deferred Profit Sharing Plan (DPSP)

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Questions 65

Justin and Yvonne both open a Registered Education Savings Plan (RESP) for their daughter Grace. They plan to regularly contribute $1,000 per year until Grace reaches the age of 17.

Which of the following statements relating to RESP is CORRECT?

Options:

A.

Justin and Yvonne may contribute a combined lifetime maximum of $50,000 for Grace.

B.

RESPs are attractive to Justin and Yvonne because they are tax-free investment plans.

C.

There is an annual contribution limit of $2,500 that Justin and Yvonne can contribute to an RESP.

D.

Contributions made by Justin and Yvonne are eligible for a tax deduction in the year they are contributed.

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Questions 66

Fabiola is an optometrist and an incorporated professional. She has fallen behind schedule regarding saving for retirement. She is considering opening an Individual Pension Plan (IPP).

What provision might encourage her to use an IPP?

Options:

A.

When Fabiola files her personal tax return, she will be able to claim contributions as an eligible deduction.

B.

Her pension benefit is not pre-determined because it is based on the returns on investments which she chooses.

C.

Contributions to her IPP can be greater than what applies to contributions for registered retirement savings plans.

D.

Withdrawals will be taxable to the business, not to Fabiola, when she starts receiving her pension income.

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Questions 67

Your client, Kimberly has investments in both registered and non-registered plans. Which of the following investment strategies is best suited for Kimberly from a tax perspective?

Options:

A.

Include investments paying capital gains in the registered plan and foreign pay investments in the non-registered plan.

B.

Include domestic pay assets in the registered plan and foreign pay assets in the non-registered plan.

C.

Include interest paying investments in the registered plan and dividend paying investments in the non-registered plan.

D.

Include dividend paying investments in the registered plan and interest paying investments in the non-registered plan.

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Exam Code: CIFC
Exam Name: Canadian Investment Funds Course Exam
Last Update: Jul 15, 2024
Questions: 224
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