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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 # 91

An increase in which factor may cause interest rates to decrease ?

Options:

A.  

Default risk

B.  

Business activity

C.  

Capital supply

D.  

Inflation rate

Discussion 0
Question # 92

Which type of managed fund has been in existence the longest?

Options:

A.  

Hedge

B.  

Investment

C.  

Segregated

D.  

Discretionary

Discussion 0
Question # 93

Reagan has accepted a role to be the Chief Revenue Officer of a charitable organization. She is currently registered as a Dealing Representative for Sunshine Financial Services.

Which of the following would apply to her?

Options:

A.  

The dealer will closely monitor her sales activities to ensure any clients from the charity are not getting a discount on potential fees.

B.  

Holding both positions at the same time is a violation of securities industry rules and regulations .

C.  

Reagan is not required to inform her dealer of this outside activity if none of her colleagues from the charity become clients.

D.  

The regulator will limit her from providing financial services to anyone associated with the charity.

Discussion 0
Question # 94

Calculate the 2-year simple return for the AAA Mutual Fund.

AAA Mutual Fund Performance

Year | Price at Beginning | Distribution | Price at End | Simple 1-Yr Return

1st Year | $10.00 | $0.25 | $11.00 | 12.50%

2nd Year | $11.00 | $0.25 | $10.20 | -5.00%

Options:

A.  

7%

B.  

3%

C.  

8%

D.  

-3%

Discussion 0
Question # 95

Sonya, a mutual fund manager for Drake Financial, has had a stellar year in managing their Canadian equity portfolio and has outperformed the benchmark by over 200 basis points. She is now concerned that within the last couple of months of this calendar year, the Canadian equity market is due for a 10 to 15% pullback. Which investment strategy would be most appropriate for her to implement for the last couple of months of the year to offset the market correction?

Options:

A.  

Buy put options on the iShares S & P/TSX 60 Index Fund

B.  

Buy call options on the iShares S & P/TSX 60 Index Fund

C.  

Increase her equity exposure to the consumer staples sector

D.  

Reduce her equity exposure to the energy sector

Discussion 0
Question # 96

Last year Peter’s earned income from employment was $50,000.

Last year, after receiving a $2 per share in dividends from 500 shares in ABC Inc., a publicly-traded Canadian corporation, he sold his shares. The sale resulted in a capital gain of $15,000.

Based on the tax rates mentioned above, what is Peter’s net federal tax liability for the year? (Round to 2 decimal places).

Options:

A.  

$9,953.30

B.  

$9,193.69

C.  

$9,113.53

D.  

$9,696.15

Discussion 0
Question # 97

The following chart displays various fund manager details:

Manager — Alpha — Beta

Manager A — -1 — 1.25

Manager B — -1 — 2.75

Manager C — +1 — 1.25

Manager D — +1 — 2.75

Which manager likely earned the highest overall rate of return?

Options:

A.  

Manager

A.  

B.  

Manager

B.  

C.  

Manager

C.  

D.  

Manager

D.  

Discussion 0
Question # 98

Using historical market data, which investment strategy ' s purchasing power is least susceptible to inflation risk?

Options:

A.  

A diversified portfolio of equities

B.  

Laddered GIC strategy with maximum maturities of five years

C.  

Mixed-maturity Government of Canada bond portfolio

D.  

Balanced allocation of equities and corporate bonds

Discussion 0
Question # 99

When reviewing a company ' s balance sheets, what ratio best determines whether their borrowing is excessive?

Options:

A.  

The cash flow from operations / total debt ratio.

B.  

The debt / equity ratio.

C.  

The interest coverage ratio.

D.  

The price / earnings ratio.

Discussion 0
Question # 100

What may be used to determine which of two bond portfolios is more sensitive to interest rate changes?

Options:

A.  

Beta

B.  

Sharpe

C.  

Variance

D.  

Time-weighted maturity

Discussion 0
Question # 101

During the calendar year, Firmansyah received a $1,800 eligible dividend from a large Canadian bank and a $US dollar (USD) dividend of $882.02 from a foreign-based corporation. The USD/CAD exchange rates is 1.3605.

Firmansyah ' s federal marginal tax bracket is 29%. The enhanced dividend gross-up rate is 38% and the federal dividend tax credit rate for eligible dividends is 15%.

What federal tax liability will be result from his investment income?

Options:

A.  

$522.00

B.  

$348.00

C.  

$695.76

D.  

$870.00

Discussion 0
Question # 102

Which of the followings describes segregated funds?

Options:

A.  

Segregated funds have high returns, high management fees, and cannot be redeemed until the maturity date of the contract.

B.  

Segregated funds flow through capital losses to investors because the investors are the owners of the underlying fund.

C.  

Segregated funds offer some protection of the capital invested but there is an added cost for the protection.

D.  

Segregated funds are subject to securities regulation because they are distributed by mutual fund dealing representatives.

Discussion 0
Question # 103

A 3-year, 3.25% coupon-paying bond sells for $95.72 (interest is paid semi-annually). Assuming the par value is $100, what is the yield to maturity of this bond (using the approximation formula and rounded to two decimal places)?

Options:

A.  

1.66%.

B.  

3.40%.

C.  

1.70%.

D.  

2.39%.

Discussion 0
Question # 104

Jacinta is a Dealing Representative with WealthSource Partners Inc., a mutual fund dealer registered in Ontario. Jacinta meets with her friend Saabir, who is a licensed insurance agent. Saabir asks Jacinta for

a list of Jacinta ' s clients so that Saabir can reach out to them to ensure that their insurance needs are being met. Which of the following statements about Jacinta sharing the list with Saabir is CORRECT?

Options:

A.  

If Saabir obtains prior consent from Jacinta to use the clients ' personal information for a reasonable purpose, Saabir can contact the clients to inquire about their insurance needs.

B.  

If Saabir promptly discloses that he has collected the clients ' personal information from Jacinta without their consent, Saabir can use the information for a new stated purpose.

C.  

If Jacinta determines that there is a reasonable purpose for sharing the list with Saabir, she can disclose the information to Saabir without obtaining prior consent from the clients.

D.  

If Jacinta shares the list with Saabir without obtaining the clients ' prior consent, she will be in breach of the Personal Information Protection and Electronic Documents Act (PIPEDA).

Discussion 0
Question # 105

What type of mortgage can be repaid at any time without paying an interest penalty?

Options:

A.  

Conventional.

B.  

Closed.

C.  

High-ratio.

D.  

Open.

Discussion 0

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