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IFC Practice Questions

Investment Funds in Canada (IFC) Exam

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Total Questions : 486

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Question # 131

Which of the following statements about nominee name accounts is TRUE?

Options:

A.  

The dealer is the registered owner of the account and holds funds in trust for the client.

B.  

Discretionary trading on a client's account, without specific instructions, is permitted.

C.  

Holding accounts in nominee name means the client no longer needs to provide any trading instructions.

D.  

A Limited Trading Authorization (LTA) is necessary since the dealer, and not the client, is the registered owner of the mutual funds.

Discussion 0
Question # 132

BUG Inc. has a beta of 1.65. If the market drops by 18.48% over the next 12 months, by approximately how much could BUG Inc. shares fall over that time period?

Options:

A.  

16.83%

B.  

11.20%

C.  

20.13%

D.  

30.49%

Discussion 0
Question # 133

Robin is preparing for a client meeting. She is gathering information about a mutual fund that she would like to recommend to her client. Which of the following documents would be considered sales communication?

Options:

A.  

the prospectus

B.  

fund facts

C.  

marketing brochure

D.  

annual information form

Discussion 0
Question # 134

Grant is a Dealing Representative with WealthPlus Securities Inc. Grant becomes a volunteer member of his local arena's Hockey Association and is appointed as the Association's new Treasurer. Which of the

following statements about Grant's appointment as Treasurer is CORRECT?

Options:

A.  

If Grant is not compensated for the Treasurer position, his firm's approval is not required.

B.  

Grant must obtain the firm's approval before he starts the Treasurer position.

C.  

Since Grant holds the Treasurer position on a voluntary basis, it is not an outside activity.

D.  

Grant must disclose the Treasurer position to his firm once he has accepted the position.

Discussion 0
Question # 135

What entity receives all fund money obtained from investors buying units/shares?

Options:

A.  

Registrar

B.  

Fund manager

C.  

Custodian

D.  

Dealer

Discussion 0
Question # 136

A married couple is opening a spousal RRSP account in the name of the wife. The dealing representative gathers the information required on the NAAF, including the wife’s name, social insurance number, permanent address, and investment objectives. The representative also gathers KYC information for both and informs them that leveraging is not permitted with respect to RRSP accounts. Which information was not required?

Options:

A.  

Disclaimer with respect to leveraging

B.  

Wife’s KYC information

C.  

Wife’s social insurance number

D.  

Husband’s KYC information

Discussion 0
Question # 137

In the OTC market, who enters the bid and ask quotations?

Options:

A.  

Mutual fund company

B.  

Issuing company or government

C.  

Retail investors

D.  

Dealers

Discussion 0
Question # 138

Sven owns preferred shares that give him the option to sell his holdings back to the issuing company at a predetermined price and within a specified time. What type of preferred shares does Sven own?

Options:

A.  

retractable

B.  

participating

C.  

convertible

D.  

redeemable

Discussion 0
Question # 139

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?

Options:

A.  

Quinton can proceed with the purchase of the Prospect Labour-Sponsored Fund because it is suitable for Banji based on her current KY

C.  

B.  

Quinton should update Banji's risk profile to "high" so that he can proceed with the purchase of the Prospect Labour-Sponsored Fund.

C.  

Quinton should not proceed with the purchase of the Prospect Labour-Sponsored Fund because it is not suitable for Banji based on her current KY

C.  

D.  

Quinton must provide Banji with full disclosure about the risks so that he can proceed with the purchase of the Prospect Labour-Sponsored Fund.

Discussion 0
Question # 140

Last year, the return on YXY fund was 10.5%. It reported a standard deviation and beta of 6.5% and 1.9, respectively. Over the same period, Treasury bills and 15-year government bonds yielded 2.2% and 4.3%, respectively. What is the fund's Sharpe ratio?

Options:

A.  

3.26

B.  

0.95

C.  

1.28

D.  

4.37

Discussion 0
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