Free Investment Funds in Canada (IFC) Exam Practice Questions

Your client, Rinaldo, wants to know more about the fees associated with his mutual funds. What can you tell him about a mutual fund’s management expense ratio (MER)?

Sagira is a Compliance Officer with WealthPath Investments Inc., a registered mutual fund dealer. Sagira routinely answers inquiries from the firm ' s Dealing Representatives and offers guidance.

Which of the following statements would Sagira likely agree is a permitted activity for Dealing Representatives to have with clients?

Zofia has held units of the ABC Monthly Income fund for many years and has reinvested all distributions by purchasing additional units. During this period, she received $2,500 in reinvested dividends. She originally purchased $10,000 of fund units, and after several years, the portfolio value rose to $15,000. What is the tax consequence if Zofia decides to sell her units?

Which of the following characteristics about mortgage mutual funds is CORRECT?

What is often a requirement of maintaining licensing as a mutual fund sales representative?

What type of fee does a mutual fund sponsor often reduce the longer an investor holds a back-end load fund?

Your client, Cosmo, recently inherited $50,000 from his uncle. He wants to use this money towards his retirement savings. Cosmo is a 50-year old, self-employed carpenter and he earns on average $65,000

per year. He has a registered retirement savings plan (RRSP) with the bank worth $425,000 and a tax-free savings account (TFSA) worth $46,000. He started saving when he was 25 years old and has always

made his own investment decisions. His money is mostly invested in balanced funds. He feels most comfortable with these types of mutual funds since they offer potential investment growth but without being too aggressive. Cosmo has no other assets.

What additional information do you need about Cosmo to fulfill your know your client obligation?

Which type of fixed income fund has a short duration, with the objectives of preserving capital and generating better current income than a money market fund?

Which among the following plans includes a provision that places a maximum limit on the amount that can be withdrawn during a calendar year?

Over the course of a couple of weeks and several appointments, Harold was finally able to provide an investment solution for his new client, Felicia. It was a lump sum investment where they plan to see her

money grow for the next 5 years.

With regards to Know Your Client (KYC) requirements, what are Harold ' s responsibilities moving forward?

Quinton, a Dealing Representative, meets with his client Banji. Banji’s Know Your Client (KYC) indicates that her risk profile is “medium’’. Banji currently has $35,000 in her account which is invested 50% in the Middleton Balanced Fund and 50% in the Hector Growth Fund. She tells Quinton that she would like to contribute an additional $10,000 to purchase the Prospect Labour-Sponsored Fund. Which of the following statements about Banji’s proposed transaction is CORRECT?

What type of investment account has the option to open it with rights of survivorship?

Last year at age 70, Gregory opened a registered retirement income fund (RRIF). Recently, Gregory unexpectedly received a large cash gift and presently does not need to depend on any payments from his RRI

F.  

Which of the following statements by his financial advisor would be CORRECT?

Jabir begins the registration process with his new dealer Prosper Wealth Inc. Jabir is excited about his new career and eager to start calling clients, opening new accounts, and selling investments. Which of the following CORRECTLY describes when Jabir will be eligible to open new client accounts and sell investments?

Which type of mutual fund is best suited to a client who is averse to volatility?