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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 # 16

Which of the following is typical for a normal yield curve?

Options:

A.  

short and long term rates are the same

B.  

long term rates are lower than short term rates

C.  

yields decline as term to maturity increases

D.  

short term rates are lower than long term rates

Discussion 0
Question # 17

Which stock would be considered the most defensive?

Options:

A.  

ABC Bank with a beta of 0.5

B.  

Unity Corp with a beta of 2.0

C.  

KYX Manufacturing with a beta of 1.0

D.  

ISS Technology with a beta of 1.5

Discussion 0
Question # 18

Marta is turning 71 years old this year. She will have to convert her registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF). Which of the following statements is TRUE?

Options:

A.  

She will be able to continue contributing to her RRIF and be subject to the same annual limits as her RRSP.

B.  

When she converts her RRSP to a RRIF, she will incur a tax liability.

C.  

She will be subject to annual maximum withdrawal limits.

D.  

She does not have to withdraw the minimum amount this year.

Discussion 0
Question # 19

Sylvia decided to use the savings from her bank account to purchase a 5-year bond. The face value of the bond is $10,000, the market price is $9,230 and the coupon rate is 7%.

What is the current yield on the bond? Round to 2 decimal places.

Options:

A.  

7.00%

B.  

7.25%

C.  

7.58%

D.  

7.75%

Discussion 0
Question # 20

What allocation strategy does an investment advisor apply when adjusting risk and return levels according to behavioural tendencies ?

Options:

A.  

Strategic

B.  

Tactical

C.  

Profit maximizing

D.  

Best practical

Discussion 0
Question # 21

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?

Options:

A.  

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

B.  

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

C.  

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

D.  

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

Discussion 0
Question # 22

Which bond has the highest interest rate risk in an increasing rates environment?

Options:

A.  

6% coupon 5-year bond.

B.  

4% coupon 5-year bond.

C.  

6% coupon 15-year bond.

D.  

4% coupon 15-year bond.

Discussion 0
Question # 23

Carol contributed $500 to her TFS

A.  

$350 was invested in ABC Bank Canadian equity fund and $150 in the ZYX Global growth fund. The expected return for the funds is 8% and 9.8%, respectively. What is the expected return on her TFSA?

Options:

A.  

17.8%

B.  

8.9%

C.  

9.3%

D.  

8.5%

Discussion 0
Question # 24

Wilma has always used the services of a tax preparation firm to file her taxes but is skeptical that she has really benefitted. This year she plans to file her own taxes for the first time.

What would be useful for her to know?

Options:

A.  

Wilma ' s marginal tax rate may be lowered when tax deductions are applied to her total income.

B.  

Wilma ' s top marginal tax rate will be applied to every taxable dollar when her tax return is filed.

C.  

Wilma ' s tax deductions permit her to reduce her tax payable dollar-for-dollar.

D.  

Wilma ' s non-refundable tax credits may only reduce her taxable income dollar-for-dollar.

Discussion 0
Question # 25

David is reviewing a simplified prospectus and is particularly interested in one of the funds. The investment objective stated for this fund is to provide dividend income, capital preservation, and some potential for capital gains. What fund is David interested in?

Options:

A.  

Mortgage fund

B.  

Preferred dividend fund

C.  

Equity growth fund

D.  

Bond fund

Discussion 0
Question # 26

Dave purchases 10,000 units of a no-load US-dollar denominated mutual fund for US$15 per unit for a total cost of $165,400 Canadian. He later sells the units for US$16 per unit, with a loss of $11,400 Canadian. To what type of risk has Dave been exposed?

Options:

A.  

Market risk

B.  

Unique risk

C.  

Exchange rate risk

D.  

Default risk

Discussion 0
Question # 27

Which ethical value covers client orders?

Options:

A.  

Duty of care.

B.  

Integrity.

C.  

Confidentiality.

D.  

Professionalism.

Discussion 0
Question # 28

Maalik opens an account for a new client, John. During the new account process, Maalik determines that he will need to confirm John’s identity. Which of the following statements about Maalik’s identification requirements is CORRECT?

Options:

A.  

If Maalik determines that there is anything suspicious about John’s transaction, he is required to report the matter to his dealer. The dealer must report the matter to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

B.  

If Maalik learns that John is the president of a state-owned company, Maalik is required to report John as a Politically Exposed Foreign Person (PEFP) to his dealer. If John is not a US person, the dealer must report the account to the Internal Revenue Service (IRS).

C.  

If John wants to make a large cash deposit of $10,000 or more, Maalik is required to collect personal information about John and report it to his dealer. The dealer must report the information to the Canada Revenue Agency (CRA).

D.  

If John attempts to make a suspicious deposit, Maalik is required to report the attempt to his dealer. The dealer must keep records of attempted suspicious transactions that are not reported to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Discussion 0
Question # 29

Your clients, Philip and Helen, have a disabled son, Alex, age 22. They want to set up a registered disability savings plan (RDSP) for Alex and have asked you for some information.

Which statement is TRUE?

Options:

A.  

Philip and Helen ' s contributions are refundable to them.

B.  

There is no annual or lifetime maximum limit on contributions.

C.  

Alex must quality for the disability tax credit.

D.  

Philip and Helen ' s contributions are tax-deductible.

Discussion 0
Question # 30

A client who is comfortable with risk has moved from stage two to stage three of the investor life cycle. What asset category should the client increase in her portfolio?

Options:

A.  

Bonds.

B.  

Money market.

C.  

Fixed-income.

D.  

Equity.

Discussion 0

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