IFSE Institute CIFC Exam Questions Instant Access

Question 1

Anthony purchased 500 units of XYZ Fund at a price of $12.00 per unit. Near the end of the year, the mutual fund made a distribution of $1.50 per unit. The net asset value per unit (NAVPU) immediately before the distribution was $16.50. Anthony immediately reinvested his distribution at the new NAVPU. How many new units did Anthony purchase when his distribution was reinvested?

A45.50

B50.00

C52.60

D55.40

Answer : B

Question 2

One of your clients, Harry, has heard that he can defer paying tax on capital gains. He wants to know if what he has heard is correct and if so, how to defer paying taxes on capital gains.

What would you tell Harry?

AHe should hold profitable investments as long as possible.

BHe should invest in mutual funds just before the dividend paying date to pick up the dividend.

CHarry should buy and sell investments actively.

DHe should hold unprofitable investments as long as possible.

Answer : A

Question 3

Which of the following actions by the federal government or the Bank of Canada is an example of monetary policy?

Aincreasing taxes

Bincreasing transfer payments to particular provinces

Cincreasing the cost of borrowing

Dincreasing spending on road construction and maintenance

Answer : C

Question 4

The Mutual Fund Dealers Association of Canada (MFDA) has strict rules concerning conflicts of interest. Which of the following is TRUE?

AGifts and benefits may be provided to a client if your employer is aware of the benefits and has given approval.

BActivities that do not relate specifically to your employer need not be reported.

COnly actual conflicts must be reported to your employer. Potential conflicts need not be reported because they have not happened yet.

DBorrowing money from a client will always be acceptable provided there is a written contract detailing the nature of the agreement.

Answer : A

Question 5

Malik has been saving money for retirement but he is worried about the impact inflation may have on the value of his savings. He wants to purchase a bond that will give him a steady stream of income that is greater than the inflation rate. He has found a bond issued by a major airline with a market price of $9,200, a par value of $10,000, and a coupon rate of 6.75%. What is the current yield of this bond?

A7.34%

B6.75%

C6.25%

D6.21%

Answer : A

Question 6

When you buy a put option, which of the following is TRUE?

AYou have the right to sell a set number of shares at a set price.

BYou have the right to purchase a set number of shares at a set price.

CYou have the obligation to sell a set number of shares at a set price.

DYou have the obligation to buy a set number of shares at a set price.

Answer : A

Question 7

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?

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

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

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

DThe employer chooses the plan provider.

Answer : D

IFSE Institute Canadian Investment Funds Course CIFC Exam Questions