IFSE Institute CIFC Exam Practice Test Instant Access

Question 1

Which of the following money market securities have the highest degree of risk for the investor?

ABankers' Acceptances

BCommercial Paper

CTreasury Bills

DMunicipal Short-Term Paper

Answer : B

Question 2

Portia is a Dealing Representative with Highview Wealth Inc., a mutual fund dealer. Portia recommends the Stature Growth Fund to her client Clive. Which of the following CORRECTLY describes what Portia must do in order to satisfy her obligations under the Client Relationship Model (CRM) and Client Focused Reforms (CFR)?

APortia must calculate the net asset value per unit (NAVPU) and report it to Give in the trade confirmation.

BPortia must mark the trade as ^unsolicited' if Clive wants to proceed with the trade and it is not suitable for him.

CPortia must disclose the costs, expenses, and ongoing fees associated with the investment prior to the trade.

DPortia must provide Clive with the pre-trade disclosure to address any material conflicts of interest with the trade.

Answer : C

Question 3

On January 2nd of this year Evan purchased 500 preferred shares of Ingram Ltd. The preferred shares have a par value of $25 per share and a quarterly dividend of $0.98 per share. They also give Evan the option to sell the shares back to Ingram at par value any time from now until September 1st two years from now. What type of preferred shares does Evan own?

Aretractable

Bconvertible

Cparticipating

Dredeemable

Answer : A

Question 4

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?

ACanadian small capitalization equity fund

BCanadian equity index fund

CCanadian dividend fund

DCanadian bond fund

Answer : B

Question 5

Which of the following statements about your mutual fund registration is CORRECT?

AYou can sell mutual funds anywhere in Canada as long as you are registered with one of the provincial or territorial securities commissions.

BYour online application must be reviewed and approved by your mutual fund dealer before you can begin to sell mutual funds.

CYou must renew your registration through the online NRD system every two years.

DYou must inform the regulatory authorities of any material or significant changes to your personal circumstances.

Answer : D

Question 6

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?

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

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

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

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

Answer : C

Question 7

Which statement CORRECTLY describes index mutual funds and traditional exchange-traded funds (ETFs)?

AIndex funds use an active investment management style, whereas ETFs use a passive investment management style.

BBoth types of funds are closed-end investments that are required to hold the same securities as the index at all times.

CThe market price of an ETF must match its net asset value (NAV), whereas there can be discrepancy in the pricing of index funds.

DBoth types of funds attempt to replicate the return of a specific market index, but their returns may not perfectly match the index.

Answer : A

IFSE Institute CIFC Canadian Investment Funds Course Exam Practice Test