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Free Investment Funds in Canada (IFC) Exam Practice Questions

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Exam style questions across every IFC domain

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Total Questions : 537

Start with our free IFC practice questions, carefully crafted to mirror the domains, phrasing, and difficulty of the real Investment Funds in Canada exam. Each IFC exam question comes with a detailed rationale that explains not just which answer is correct but why the others fall short. That's how concepts stick. Use the free set to benchmark yourself: identify your CSI weak domains, see where you're losing marks, and build a focused study plan in minutes.

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Question # 136

Based on the financial planning pyramid, what security would be appropriate for a very aggressive investor?

Options:

A.  

Commodities

B.  

Tax shelters

C.  

Foreign stocks

D.  

Over the Counter (OTC) Securities

Discussion 0
Question # 137

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.

Discussion 0
Question # 138

Which statement regarding the Fund Facts document is CORRECT?

Options:

A.  

Before accepting an order from a client, a Dealing Representative is expected to provide and explain the Fund Facts document.

B.  

The Fund Facts document must be delivered to the client, electronically or in writing, within 5 days of the transaction date.

C.  

For leveraged accounts, the Fund Facts document is not required if the client has been provided with the Leverage Risk Disclosure document.

D.  

The Fund Facts document must not contain performance data.

Discussion 0
Question # 139

Which of the following statements about nominee name accounts is TRUE?

Options:

A.  

The dealer is the registered owner of the account and holds funds in trust for the client.

B.  

Discretionary trading on a client ' s account, without specific instructions, is permitted.

C.  

Holding accounts in nominee name means the client no longer needs to provide any trading instructions.

D.  

A Limited Trading Authorization (LTA) is necessary since the dealer, and not the client, is the registered owner of the mutual funds.

Discussion 0
Question # 140

Megan purchases a treasury bill for $98,200. When it matures for $100,000, how does Megan treat the $1,800 difference?

Options:

A.  

as interest income

B.  

as a capital gain

C.  

as a dividend

D.  

as return of capital

Discussion 0
Question # 141

An investor deposits $80,000 in a 10-year, segregated fund contract worth $50,000 at maturity; assuming the contract guarantee is set at 75%, how much will the investor be paid (maturity guarantee)?

Options:

A.  

$30,000

B.  

$37,500

C.  

$10,000

D.  

$22,500

Discussion 0
Question # 142

Raybert has a very short-term investment objective and has decided to purchase money market instruments. There are plenty of 90-day money market securities available for him to choose from. Although Raybert is aware that all the respective issuers have a similar need for his capital, no matter what he decides, he can only afford to purchase one.

In terms of financial markets and their relationship to the principles of supply and demand, which characteristic of investment capital are the issuers being exposed to?

Options:

A.  

Mobility

B.  

Risk

C.  

Scarcity

D.  

Sensitivity

Discussion 0
Question # 143

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

Discussion 0
Question # 144

On which exchange will an investor be able to purchase a senior equity?

Options:

A.  

The Montreal Exchange.

B.  

The Canadian Securities Exchange.

C.  

The Toronto Stock Exchange.

D.  

The TSX Venture Exchange.

Discussion 0
Question # 145

You are concerned about upcoming weakness in the Canadian dollar. Which type of fund should you invest in?

Options:

A.  

A specialty fund that uses derivatives to hedge the value of its portfolio

B.  

An international fund that hedges its foreign currency risk

C.  

A global fund that hedges its foreign currency risk

D.  

A global fund that does not hedge its foreign currency risk

Discussion 0
Question # 146

Louis is the portfolio manager for Quattro Fund. The mandate of the mutual fund is to invest in a combination of cash, fixed income, and equity securities; however, Louis has the ability to adjust the portfolio according to market conditions. If Louis feels that interest rates will fall, he could invest the whole portfolio in equities. If he feels the market is too high, he could take profits and sit totally in cash. What type of mutual fund is Quattro Fund?

Options:

A.  

Canadian equity fund

B.  

balanced fund

C.  

commodity pool

D.  

asset allocation fund

Discussion 0
Question # 147

A portfolio that incurs a substantial loss due to a significant downturn in Canadian equities has been exposed to what type of risk?

Options:

A.  

Unique

B.  

Currency

C.  

Default

D.  

Systematic

Discussion 0
Question # 148

What type of mutual fund seeks to provide a positive real rate of return, through both income and capital appreciation, by investing in a diversified portfolio of fixed income securities, as well as Canadian and foreign equity securities?

Options:

A.  

Dividend

B.  

Balanced

C.  

Blue chip

D.  

Mortgage

Discussion 0
Question # 149

Which of the following statements regarding mutual fund fees is correct?

Options:

A.  

Redemptions are made from units held by investors to pay trailer fees.

B.  

Trailer fees are only paid to mutual fund dealers when a purchase is made.

C.  

The mutual fund dealer receives trailer fees based on the value of assets under management.

D.  

Trading commissions are paid from the management fee.

Discussion 0
Question # 150

The owners of Underground Airways Ltd. want to take their privately owned corporation public through an initial public offering (IPO). They are speaking to a specialist from an investment dealer to determine

whether it would be advisable to become listed on a stock exchange or the over-the-counter (OTC) market.

In comparing the two options, which of the following considerations is TRUE?

Options:

A.  

Underground would be subject to less stringent listing requirements if they chose the stock exchange as compared to the OTC market.

B.  

If Underground chose to list on the OTC market, there would be no secondary market available for investors.

C.  

Underground would still be directly involved in the trading of their shares on either market.

D.  

A stock exchange listing would provide Underground with greater market exposure and public confidence than listing on the OTC market.

Discussion 0

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