IFC Practice Questions

At the close of business, Great Lengths Equity Fund had total assets of $135 million and total liabilities of $10 million. They had 11 million units outstanding. In addition, their current assets totalled $13 million and current liabilities were $3 million. Which of the following statements regarding Great Lengths Equity Fund’s net asset value per unit (NAVPU) is correct?

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

What does PIPEDA require firms in Canada to do?

Which financial instruments trade primarily in an auction market?

Which Sharpe ratio result would indicate that the fund earned a return less than the risk-free return?

Sarah and Kyle are a married couple. They are both 34 years of age and work as teachers. Their combined annual income is $130,000. They are able to save $800 each month. They own a home worth

$340,000 with a $120,000 mortgage. Since they work for the same employer, they have the same defined benefit pension plan. Other than a tax-free savings account (TFSA) in Kyle's name with $5,000, they do not have any other assets.

They are avid sailors and want to save towards a purchase of a sailboat. For the type of sailboat they want, they estimate it should cost around $65,000. They want you to recommend an investment for their monthly savings to help them achieve their goal faster.

What question should you ask them next?

At 4:00 p.m. Eastern Time on July 6, the following information is collected for the Marigold Canadian Dividend Fund:

What is the net asset value per unit NAVPU for the Marigold Canadian Dividend Fund for July 6?

Ian is 25, employed, and has no dependents. He has no current financial or family obligations. He has asked for your recommendation for investing a $50,000 inheritance. What asset allocation would typically suit an investor with Ian’s characteristics?

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?

Helen is an experienced investor and after all these years she believes that the market is completely efficient. What action would she undertake?