IFSE Institute CIFC Exam Questions Instant Access

Question 1

Your client, Helen, just received her non-registered account statement which states that one of her mutual funds made an interest income distribution during the year. She asks you how she will be taxed on the distribution. What do you tell Helen?

AShe will pay taxes on 50% of the distribution.

BShe will pay taxes at her top marginal tax rate.

CShe will pay taxes on the grossed-up amount of the income.

DShe will pay taxes at her average tax rate.

Answer : B

Question 2

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

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

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

CETFs have lower MERs compared to mutual funds.

DAll ETFs are actively managed.

Answer : C

Question 3

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)?

AMarch 1, Year 1

BMarch 1, Year 2

CDecember 31, Year 1

DDecember 31, Year 2

Answer : B

Question 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?

AJosephine can accept a limited POA.

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

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

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

Answer : A

Question 5

Your client Charlie is thinking about making a large investment into the Sentinel Canadian Equity Fund on December 15. The ex-dividend date for the mutual fund is December 20. What advice would you give

Charlie to avoid the tax trap?

APurchase the mutual fund after the ex-dividend date of December 20.

BMake the purchase on December 15 but choose to reinvest the distributions.

CMake the purchase on December 15 but choose to receive the distributions in cash.

DPurchase the mutual fund before the ex-dividend date of December 20.

Answer : A

Question 6

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)?

A$1,198

B$1,216

C$1,256

D$1,332

Answer : C

Question 7

Kendrick is a newly registered Dealing Representative for Oak Solid Financial. He has been assigned the task of contacting existing clients where there has been no record of consultation within the last 12 months. The first person he sees on his list is a client named Chandra Ruffino. He double-checks if her phone number is on the Do Not Call List (DNCL) registry. Which of the following statements apply?

AIf Chandra is on the DNCL registry, Kendrick is still eligible to contact the client of Oak Solid Financial.

BIf Chandra has been on the DNCL registry for 18 months, then Kendrick is not allowed to contact her.

CIf Chandra is on the DNCL, then Kendrick can only contact her if she is specifically his client.

DIf Chandra had closed her account within the last 12 months and registered herself on the DNCL, then Kendrick cannot call her.

Answer : A

IFSE Institute Canadian Investment Funds Course CIFC Exam Questions