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Free Investment Funds in Canada (IFC) Exam Practice Questions

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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 # 121

Last year, a hedge fund had a gross return of 22%. The hurdle rate was 5%, and the incentive fee was 20%. What percentage compensation would the fund manager earn for this strategy, assuming no other fees exist?

Options:

A.  

3.4%

B.  

5.4%

C.  

4.4%

D.  

3.0%

Discussion 0
Question # 122

When can a mutual fund sales representative disclose confidential client information without informing the client?

Options:

A.  

When disclosures are documented

B.  

When legally required by the government or by law

C.  

When referring the client to a specialist or expert for investment advice

D.  

When requested by the Canadian Investment Regulatory Organization

Discussion 0
Question # 123

What type of unemployment is caused by a lack of skilled workers?

Options:

A.  

Cyclical

B.  

Structural

C.  

Frictional

D.  

Seasonal

Discussion 0
Question # 124

What expense ratio is paid by mutual fund investors for the explicit costs of running the fund?

Options:

A.  

Operating expense ratio

B.  

Management expense ratio

C.  

Management fee ratio

D.  

Trading expense ratio

Discussion 0
Question # 125

What type of fixed-income fund would have the most tax-advantaged form of income distribution?

Options:

A.  

XYZ U.S. Preferred Dividend Fund

B.  

DEF U.S. Mortgage

C.  

ABC Canadian Bond Fund

D.  

PST Canadian Preferred Share Fund

Discussion 0
Question # 126

What stage in the business cycle typically has increasing wages, rising inflation, rising interest rates with slowing sales, and decreasing business investment?

Options:

A.  

Peak

B.  

Expansion

C.  

Trough

D.  

Recovery

Discussion 0
Question # 127

Khuyen is a Dealing Representative for Stark Contrast Investments. Her dealer has relationships with 20 different mutual fund families. This gave her the flexibility to sell two different types of funds from two

different fund families to her client, Bao. $5,000 was invested in the Blue Moon Global Balanced fund and an additional $5,000 was invested in the Orange Sun Asset Allocation fund. Khuyen has been

reviewing the performance of both funds and has determined that Bao would be better off being fully invested in the Blue Moon Global Balance fund. Bao had previously signed a Limited Authorization Form

(LAF) for Khuyen, so she goes ahead and does not worry about consulting with Bao before making the change.

What type of activity has Khuyen performed?

Options:

A.  

Top-down management

B.  

Churning

C.  

Discretionary trading

D.  

Value investing

Discussion 0
Question # 128

Which statement is most accurate about fund wraps?

Options:

A.  

There is essentially no regulatory difference between a fund wrap and a standard mutual fund

B.  

Each model is designed to meet the needs of the individual

C.  

The investor pays fees to both the wrap manager and the manager of the underlying funds

D.  

The fund wrap sponsor is responsible for asset allocation decisions

Discussion 0
Question # 129

Yesterday, Mariana who is new to investing and purchased mutual funds for the very first time. She shared her excitement with her good friend, Julius. However, after Julius learned about her investment, he admits that he had a bad experience with mutual fund investing and that he lost money. Mariana regrets not talking to Julius prior to making her decision. Her feelings of enthusiasm have changed to fear. She is wondering if it is too late to change her mind and cancel her purchase order.

Which statement regarding the right of withdrawal is CORRECT?

Options:

A.  

The right of withdrawal for investors can be different depending on which province (or territory) the fund was purchased within.

B.  

The Canadian Securities Administrators (CSA) created legislation that addresses the right of withdrawal for investors.

C.  

The Mutual Fund Dealers Association of Canada (MFDA) have written conduct rules regarding the right of withdrawal.

D.  

Mariana has to wait two business after her purchase order has been settled to exercise the right of withdrawal.

Discussion 0
Question # 130

Which type of fund is least likely to produce capital gains income?

Options:

A.  

Mortgage fund

B.  

Short-term bond fund

C.  

Money market fund

D.  

Preferred dividend fund

Discussion 0
Question # 131

When purchasing a mutual fund, what is the correct way to determine the number of units purchased if the order was entered today at 2:30 p.m. ET?

Options:

A.  

Use today ' s NAV

B.  

Use the 2:30 p.m. ET NAV

C.  

Use the average of today ' s and yesterday ' s NAV

D.  

Use yesterday ' s NAV

Discussion 0
Question # 132

Barend is a Dealing Representative with Planvest Group Inc., a mutual fund dealer and member of the Mutual Fund Dealers Association of Canada (MFDA). Which of the following CORRECTLY describes

Barend ' s obligation for conflicts of interest?

Options:

A.  

Barend must identify material conflicts of interest and implement controls on behalf of the firm.

B.  

Barend must disclose material conflicts of interest that cannot be addressed in the best interest of the client.

C.  

Barend must avoid material conflicts of interest that cannot be addressed in the best interest of the client.

D.  

Barend must identify material conflicts of interest and promptly report the conflicts of interest to clients.

Discussion 0
Question # 133

Thomas, a resident of Ontario, is a full-time university student. He does food delivery to supplement his income. During the school year, he works on weekends and works full-time during his summer break.

Thomas ' pensionable earnings were $16,000 for the year. How much must Thomas contribute to CPP when CPP contribution rate is 5.95%?

Options:

A.  

$0

B.  

$743.75

C.  

$912.00

D.  

$1,425.00

Discussion 0
Question # 134

Your employer has a contributory group RRSP under which he matches employee contributions, up to a maximum of 5% of salary.

Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

Options:

A.  

It is more costly and time consuming to administer than traditional pension plans.

B.  

If you leave your employer, your group RRSP stays with the employer.

C.  

You need to wait until you file your taxes to receive your contribution tax deduction.

D.  

The employer chooses the plan provider.

Discussion 0
Question # 135

What criteria is used to compare equity mutual funds and global bond funds to determine suitability?

Options:

A.  

Fund categorization.

B.  

Investment objective.

C.  

Capital appreciation potential.

D.  

Fund manager performance.

Discussion 0

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