Investment Funds in Canada (IFC) Exam (IFC) Free Practice Test

Question 1

Ayra believes the Canadian economy will be booming for the next five years. Which mutual fund can provide Ayra with the most tax efficiency if she keeps her investment in a non-registered account?

A. Bond

B. Equity growth

C. Money market

D. Mortgage

Correct Answer: B

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 2

A married couple is opening a spousal RRSP account in the name of the wife. The dealing representative gathers the information required on the NAAF, including the wife's name, social insurance number, permanent address, and investment objectives. The representative also gathers KYC information for both and informs them that leveraging is not permitted with respect to RRSP accounts. Which information was not required?

A. Husband's KYC information

B. Wife's KYC information

C. Wife's social insurance number

D. Disclaimer with respect to leveraging

Correct Answer: A

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 3

What value are withdrawals under a ratio withdrawal plan based upon?

A. Current portfolio value

B. Average of start and year-end portfolio value

C. Value at inception of plan

D. End of year portfolio value

Correct Answer: A

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 4

Which of the following statements is TRUE about inflation?

A. Generally inflation will benefit those who are living on investment income.

B. An increase in the inflation rate could mean investors have less money to invest.

C. Purchasing power rises as inflation rises.

D. Inflation results in a redistribution of income from borrowers to lenders.

Correct Answer: B

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 5

Terri, 30 years old, is the marketing manager at Provincial Winery with an average annual income of $60,000.
Her spouse Yvette, 28 years old, is a project manager with a telecommunications firm earning
$70,000 per year. You are helping them to organize their investments and are trying to assess their financial resources.
Which of the following is the best question to ask?

A. Do you have any children?

B. What is your investment experience?

C. Do you have pension plans at work?

D. When do you need the money?

Correct Answer: C

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 6

Which client has demonstrated the endowment behavioural bias?

A. Peter, who chose to hold his mutual fund shares despite the fact that the shares had lost value, the prospects for the fund were poor and believing there are stronger alternative investments available

B. Farida, who purchased shares in a real estate company based on the success of previous real estate company purchases

C. Kendra, who believed that funds managed by a certain fund management company must be good quality since she often sees the advertisements

D. Dave, who wants to sell his income property at a price that is higher than comparable properties in the area

Correct Answer: D

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 7

Bernadette has a high-paying job and is in the top tax bracket. She recently received a payment of $5 million upon the settlement of her uncle's estate. Bernadette would like to invest her inheritance in financial products that would not only grow her money but is also income tax friendly.
Which of the following would provide the most favourable tax treatment?

A. Coupon payments from Government of Canada bonds.

B. Eligible dividends from a publicly-listed Canadian corporation

C. Capital gains from a large Canadian corporation.

D. Dividends received from a large foreign corporation.

Correct Answer: B

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 8

After completing the proficiency examinations, how long can an individual remain unregistered without having to rewrite these examinations?

A. 3 years

B. 1 year

C. 90 days

D. 180 days

Correct Answer: B

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Question 9

Gary chooses not to recommend that his client sell a current mutual fund to purchase a similar new mutual fund despite pressure to meet a sales target for the new fund. What responsibility applies to Gary's action?

A. Legal

B. Compliance

C. Ethical

D. Professional

Correct Answer: C

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

Welcome to TestSimulate

CISI Investment Funds in Canada (IFC) (IFC) Free Practice Test