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Investment Funds in Canada (IFC) Exam

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Total Questions : 486

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Question # 141

Jeremy is reviewing the prospectus of a Canadian equity fund and notes the fund permits the use of derivatives. The stated objective of the derivative use is bet on the future movement of the market to increase the fund's returns. What should Jeremy be aware of regarding this fund?

Options:

A.  

Derivatives are used for speculation

B.  

Derivatives are used as a portfolio hedge

C.  

The fund limits derivatives up to 15% of the value of the portfolio

D.  

The fund limits derivatives up to 5% of the value of the portfolio

Discussion 0
Question # 142

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 # 143

What is a requirement when holding an RRIF?

Options:

A.  

The RRIF must be fully managed as opposed to self-directed

B.  

The RRIF must be terminated at the end of the year in which the client turns age 71

C.  

The term must be based on the age of the holder of the RRIF

D.  

Minimum annual withdrawals must be made from the RRIF

Discussion 0
Question # 144

Apex Mutual Fund has been structured to avoid taxation by distributing any net interest, dividends, and capital gains to unitholders each calendar year. This is an example of what type of mutual fund structure?

Options:

A.  

Closed-end mutual fund

B.  

Mutual fund trust

C.  

Open-ended mutual fund

D.  

Mutual fund corporation

Discussion 0
Question # 145

Lucas is 60 years old and continues to work. He presently is a plan holder of a registered retirement savings plan (RRSP). He is considering changing his RRSP to a registered retirement income fund (RRIF).

Which of the following statements is CORRECT?

Options:

A.  

There is no minimum age to be an annuitant to a RRI

F.  

B.  

Once he changes his RRSP to a RRIF, his unused total RRSP contribution room is lost.

C.  

Minimal withdrawals are required to start in the current calendar year his RRIF was established.

D.  

Investments that qualify as an eligible investment for a RRIF are different than for an RRSP.

Discussion 0
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