IFSE Institute CIFC Exam Questions (Updated 2024) 100% Real Question Answers [Q52-Q69]

NEW QUESTION 52
Solomon is a Dealing Representative who is excited about a new equity fund his dealer recently approved. He thinks investors will be attracted to the fund’s historical performance. He has a prospective new client, Madira, who is 25 years old. Madira has invested in mutual funds before, but not with Solomon’s dealer. She has made an appointment to open a new RRSP with Solomon’s firm.
What does Solomon need to do to make this a suitable recommendation?

Show from past fund performance, that mutual fund costs are not important if there are high returns.

Rely on the risk rating of the mutual fund when offering an investment solution.

Identify how the proposed investment is in alignment with the investor’s profile and holdings.

Match the past rates of return of the mutual fund with what is the anticipated rate of return.

NEW QUESTION 53
10 years ago, Felipe opened a registered retirement savings plan (RRSP) account and purchased a mutual fund.
The mutual fund purchased included a 7-year deferred sales charge (DSC). At the time of making his investment, him and his Dealing Representative agreed that he had a 25-year growth objective. Since Felipe knew that he was not planning to use his investment until he retired, he was not concerned about the DSC. Although the rate of return did vary from year-to-year, he never noticed his mutual fund having a drop in value. This gave Felipe more confidence in the investment. As a result, he has never made any changes to his investment.
What category of Know Your Client (KYC) information has been given?

Financial circumstances

Investment experience

Risk profile

Personal circumstances

NEW QUESTION 54
Taylor is chatting with other parents in the park when the conversation turns to registered education savings plans (RESPs).
Taylor thinks that most of what they are saying is incorrect.
Which of the following statements about self-directed RESPs is TRUE?

The government contributes an additional grant for low income families who qualify.

Only one beneficiary may be named per RESP.

Educational Assistance Payments (EAPs) may only be used for tuition for a post-secondary program.

Educational Assistance Payments (EAPs) withdrawn from the plan are not taxable.

NEW QUESTION 55
Solomon is a Dealing Representative who is excited about a new equity fund his dealer recently approved. He thinks investors will be attracted to the fund’s historical performance. He has a prospective new client, Madira, who is 25 years old. Madira has invested in mutual funds before, but not with Solomon’s dealer. She has made an appointment to open a new RRSP with Solomon’s firm.
What does Solomon need to do to make this a suitable recommendation?

Show from past fund performance, that mutual fund costs are not important if there are high returns.

Rely on the risk rating of the mutual fund when offering an investment solution.

Identify how the proposed investment is in alignment with the investor’s profile and holdings.

Match the past rates of return of the mutual fund with what is the anticipated rate of return.

NEW QUESTION 56
On January 3, John invests $500 in the Blue Sky U.S. Equity Fund. On July 1 of the same year, he invests another $500 into the same mutual fund. Information about the net asset value per unit (NAVPU) at the time of each transaction is provided below. Given this information, what will be the value of John’s investment on December 31 of this year (please ignore transaction costs and distributions)?

$1,198

$1,216

$1,256

$1,332

NEW QUESTION 57
The owners of Underground Airways Ltd. want to take their privately owned corporation public through an initial public offering (IPO). They are speaking to a specialist from an investment dealer to determine whether it would be advisable to become listed on a stock exchange or the over-the-counter (OTC) market.
In comparing the two options, which of the following considerations is TRUE?

A stock exchange listing would provide Underground with greater market exposure and public confidence than listing on the OTC market.

Underground would still be directly involved in the trading of their shares on either market.

Underground would be subject to less stringent listing requirements if they chose the stock exchange as compared to the OTC market.

If Underground chose to list on the OTC market, there would be no secondary market available for investors.

NEW QUESTION 58
Stan, a portfolio manager, is looking at two steel companies as potential investments. Truesteel Inc. has a current ratio of 2:1 while Strongco Ltd. has a current ratio of 0.8:1.
What could this information indicate?

It appears that Truesteel is more profitable than Strongco.

Truesteel is better able to meet its short term financial obligations than Strongco.

The stock market is more optimistic about the prospects for Truesteel than Strongco.

Stronqco is reiving less on debt financing than Truesteel.

NEW QUESTION 59
What type of shares offer its shareholders the opportunity to receive additional dividends if the company’s profit exceeds a stated level?

Redeemable preferred shares

Cumulative preferred shares

Convertible preferred shares

Participating preferred shares

NEW QUESTION 60
Patrick is a portfolio manager for the HyperTally Growth Fund. It has generated an annualized rate of return of
10% this past year. However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund dropping?

Agree to buy forward contracts where he is in the “long’ position.

Buy call options for the existing stocks stored within the fund.

Avoid the use of derivatives because they are speculative in nature.

Purchase put options for the fund’s existing assets.

NEW QUESTION 61
Which of the following statement about Exchange Traded Funds (ETFs) is TRUE?

Usually the market price of an ETF is the net asset value per unit (NAVPU) of the Fund on that day.

Investors may sell their ETFs in the stock market or redeem them through the Fund at the NAVPU of the day.

ETFs have lower MERs compared to mutual funds.

All ETFs are actively managed.

NEW QUESTION 62
Frederic recently sold his units in a US dollar (USD) denominated mutual fund. He wants to convert the proceeds back to Canadian dollars (CAD). If he received proceeds of $1,200 USD from the sale and the exchange rate is $1 CAD for $0.99 USD, how much will Frederic receive in Canadian dollars?

$1-188.00

$1,200.00

$1, 12.12

$1,320.00

NEW QUESTION 63
Kerry’s total income this past year was $100,000 and she claimed a tax deduction of $2,000. When the tax return is filed, what would be the federal tax payable when applying the following federal tax rates?
(Round to the closest whole dollar for the final answer.)

$17,472

$18,754

$24,000

$25,480

NEW QUESTION 64
Eleanora receives a $500 eligible Canadian dividend from her mutual fund. Her federal marginal tax rate for the year is 29%. Assuming the enhanced gross-up of 38% and a federal dividend tax credit of 15.02%, how much federal tax will she pay on her dividend?

$69.90

$189.16

$96.46

$115.40

NEW QUESTION 65
One of your clients, Fernando, is approaching 71 years of age and has a few questions regarding life income funds (LIFs).
Which of the following statements about LIFs is TRUE?

Fernando may make contributions tohis LIF if he continues working.

Fernando is free to withdraw any amount from his LIF above the minimum amount.

Fernandocan transfer money from his registered retirement savings plan (RRSP) to a LIF.

Fernando can transfer money from his locked-in retirement account (LIRA) to a LIF.

NEW QUESTION 66
Quintin has been a Dealing Representative for Global Maximum Financial for 5 years. Today, he opened an account for his new client, Reginald. In addition to opening a new account, Reginald agreed to accept Quintin’s investment recommendation and placed a purchase order to buy units of the Global Maximum Value Equity fund.
Quintin informed his Branch Manager Lupita about this new account on the same day the purchase order was received. Lupita told Quintin that she would complete her review of the New Client Application Form (NCAF) by no later than tomorrow.
Which statement regarding this new account opening is CORRECT?

Quintin cannot accept purchase orders from a client until Lupita completes her review of the NCAF.

Lupita has two business days from the date of opening the new account to approve the NCAF completed by Quintin.

Quintin and Lupita are both following proper procedure regarding new account openings and purchase orders.

Unless Quintin is presently under probation, he does not need Lupita’s approval regarding the NCAF.

NEW QUESTION 67
Which of the following best describes how a target date fund works?

Through the years, the asset allocation shifts from equities towards fixed income as the maturity date approaches.

Through the years, the asset allocation shifts from fixed income towards equities as the maturity date approaches.

The mutual fund is constantly rebalanced to maintain an even split between equities and fixed income through the life of the mutual fund.

In exchange for a lump-sum purchase the unitholder receives guaranteed monthly payments for life.

NEW QUESTION 68
Which of the following statements about capital gains distributions from mutual fund trusts is correct?

Capital gains from mutual fund trusts are deferred until the investor exits the mutual fund.

Capital gains distributions from a mutual fund trust are reported annually on a T3.

Capital gains distributions are not a disposition and are therefore not taxable.

Capital gains from mutual fund distributions are 100% taxable.

NEW QUESTION 69
Sujay contributes 3% of his $60,000 salary to his employer’s defined contribution pension plan. His employer contributes the same amount to the plan. How will this affect his registered retirement savings plan (RRSP) contribution room for the year?

It will have no effect. RRSP contribution room is based on earned income only.

It will reduce Suiay’s contribution room by 51,800.

It will reduce Suiay’s contribution room by

It will reduce Suiay’s contribution room by $3,600.