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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 # 46

Which of the following is a conflict of interest that should be AVOIDED?

Options:

A.  

Arilla ' s client, Gwen, wants to co-invest with Arilla in units of a real estate limited partnership.

B.  

Davu ' s client, Ester, wants him to refer her to an accountant to help her with filing her tax return.

C.  

Fred ' s client, Hildie, wants to buy a life insurance policy and Fred is dually licensed as an Insurance Agent.

D.  

Jamal ' s client, Laila, wants to buy the Focus Canadian Growth Fund that pays Jamal trailer fees.

Discussion 0
Question # 47

What does relative performance seek to compare between a fund and the other funds in its category?

Options:

A.  

Annual returns

B.  

Sharpe ratio

C.  

Standard deviation

D.  

Beta coefficient

Discussion 0
Question # 48

If an investor believes markets are efficient , how should they manage their portfolio?

Options:

A.  

Perform fundamental research and purchase undervalued securities.

B.  

Maintain exposure to a wide range of index-driven investments.

C.  

Replace all equity holdings with cash and equivalents.

D.  

Shift weightings between asset classes depending on movements in the economy.

Discussion 0
Question # 49

Which financial leverage ratio measures a company’s ability to repay its borrowings?

Options:

A.  

Operating profit margin ratio

B.  

Interest coverage ratio

C.  

Total debt ratio

D.  

Cash flow from operations to total debt ratio

Discussion 0
Question # 50

Iliana owns 1,000 participating preferred shares in the First Canadian Bank. Which of the following features are characteristic of her investment?

Options:

A.  

Iliana has the right to purchase more preferred shares in the company before common shareholders.

B.  

Iliana is able to vote at the annual general meeting and elect members of the board of directors.

C.  

Iliana can convert her preferred shares to common shares at a fixed price and within a specified time period.

D.  

Iliana has a right to share in the bank ' s net profits over and above the specified dividend rate.

Discussion 0
Question # 51

A portfolio manager of a bond fund who believes interest rates will fall should do what?

Options:

A.  

Switch from bonds with low coupon rates to bonds with high coupon rates.

B.  

Switch from long-term maturity bonds to short-term maturity bonds.

C.  

Switch from bonds with longer duration to bonds with shorter duration.

D.  

Switch from bonds with shorter duration to bonds with longer duration.

Discussion 0
Question # 52

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

Options:

A.  

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

B.  

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

C.  

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

D.  

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

Discussion 0
Question # 53

An employer wants to offer his employees a pension plan. The goal is to provide a simple-to-understand plan that will reward all participants equally, regardless of their income level, and provide a retirement income based on a participant’s years of service with the company. What plan will best meet his requirements?

Options:

A.  

Defined contribution plan

B.  

Career average plan

C.  

Flat benefit plan

D.  

Final average plan

Discussion 0
Question # 54

How can a pension fund serve as a financial intermediary?

Options:

A.  

By collecting and investing funds from participants to meet future payments.

B.  

By processing pension payments as enforced by a legislative framework.

C.  

By making investments according to regulatory guidelines.

D.  

By matching plan assets with plan liabilities.

Discussion 0
Question # 55

Eleanora receives a $500 eligible Canadian dividend from her mutual fund. Her federal marginal tax rate for the year is 29%. Assuming the enhanced gross-up of 38% and a federal dividend tax credit of 15.02%, how much federal tax will she pay on her dividend?

Options:

A.  

$69.90

B.  

$189.16

C.  

$96.46

D.  

$115.40

Discussion 0
Question # 56

What term applies to unemployment created by a new technology that eliminates the need for subway train drivers?

Options:

A.  

Structural

B.  

Frictional

C.  

Natural

D.  

Cyclical

Discussion 0
Question # 57

Beatrice is looking for comprehensive information regarding the analysis of financial statements and fund management expenses as it relates to her current mutual fund investment.

Which document would provide the information she is looking for?

Options:

A.  

Annual Information Form

B.  

Fund Facts

C.  

Simplified Prospectus

D.  

Management Reports of Fund Performance

Discussion 0
Question # 58

Which of the following statements about registered education savings plans (RESPs) is CORRECT?

Options:

A.  

Contributions to RESPs are tax deductible.

B.  

There is a yearly contribution limit per beneficiary.

C.  

RESPs must be collapsed by the end of the 31st year of its starting date

D.  

Contributed funds grow tax-free within the plan.

Discussion 0
Question # 59

Your clients, Jessica and Ken, want to buy a house next year. You recommend a money market fund. How do you think a money market fund will help Jessica and Ken reach their goal?

Options:

A.  

Money market funds are safe investments because their net asset value per unit does not usually fluctuate.

B.  

Money market funds provide high returns without risking the capital invested.

C.  

Money market funds pay income weekly which can be automatically reinvested.

D.  

Money market funds provide investors a guaranteed fixed rate of return.

Discussion 0
Question # 60

What personal information must be obtained from clients opening a non-registered account?

Date of birth

Social insurance number

Permanent address

Full legal name

Options:

A.  

1 and 4

B.  

1 and 2

C.  

3 and 4

D.  

2 and 3

Discussion 0

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