Apr-2024 IFSE Institute CIFC Actual Questions and Braindumps [Q45-Q60]

Apr-2024 IFSE Institute CIFC Actual Questions and Braindumps [Q45-Q60]

April 1, 2024 latestexam 0 Comments

4/5 - (1 vote)

Apr-2024 IFSE Institute CIFC Actual Questions and Braindumps

CIFC Dumps To Pass IFSE Institute Exam in 24 Hours – LatestCram

NEW QUESTION 45
Which of the following individuals would qualify for a full or partial Old Age Security (OAS) pension?

Lenny, who is 65 years old and was born and raised in Canada, but lived in Jamaica from ages 25 to 65.

Marcus, who is 60 years old, a Canadian citizen, and has lived in Canada for 20 years.

Katrina, who is 75 years old and just immigrated to Canada from the U.S. last month.

Donald, who is 65 years old and has lived in Canada since his birth but worked in Australia for the past
10 years.

Explanation
Lenny would qualify for a partial OAS pension, because he meets the following criteria:
*He is 65 years old or older.
*He is a Canadian citizen or a legal resident at the time of his OAS pension application.
*He has resided in Canada for at least 10 years since the age of 18.
The amount of his partial OAS pension would be proportional to the number of years he has lived in Canada after the age of 18, divided by 40. For example, if he has lived in Canada for 15 years, he would receive 15/40 or 37.5% of the full OAS pension1 References = web search results from search_web(query=”Old Age Security pension eligibility”)

NEW QUESTION 46
Which of the following actions by the federal government or the Bank of Canada is an example of monetary policy?

increasing taxes

increasing transfer payments to particular provinces

increasing the cost of borrowing

increasing spending on road construction and maintenance

Explanation
Monetary policy is the process by which the central bank, in Canada’s case the Bank of Canada, influences the supply and demand of money in the economy, and thereby affects the level of interest rates, inflation, and economic activity. One of the main tools of monetary policy is the overnight rate, which is the interest rate that banks charge each other for short-term loans. The Bank of Canada sets a target for the overnight rate and adjusts it periodically to achieve its inflation target of 2%. By increasing or decreasing the overnight rate, the Bank of Canada affects the cost and availability of credit for consumers and businesses, and influences their spending and saving decisions. For example, if the Bank of Canada increases the overnight rate, it becomes more expensive to borrow money, which reduces the demand for loans and credit, and slows down economic growth and inflation. Conversely, if the Bank of Canada decreases the overnight rate, it becomes cheaper to borrow money, which increases the demand for loans and credit, and stimulates economic growth and inflation.
References: Canadian Investment Funds Course, Chapter 1: The Canadian Financial Services Industry1

NEW QUESTION 47
Which statement regarding the Fund Facts document is CORRECT?

Before accepting an order from a client, a Dealing Representative is expected to provide and explain the Fund Facts document.

The Fund Facts document must be delivered to the client, electronically or in writing, within 5 days of the transaction date.

For leveraged accounts, the Fund Facts document is not required if the client has been provided with the Leverage Risk Disclosure document.

The Fund Facts document must not contain performance data.

Explanation
The Fund Facts document is a summary disclosure document that highlights key information about a mutual fund or an exchange-traded fund (ETF), such as the performance history, investments, fees, and risks.
According to the Point of Sale (POS) disclosure rules, a Dealing Representative must provide and explain the Fund Facts document to the client before accepting an order to buy or switch a fund. This allows the client to make an informed investment decision and to know their rights.
References = Fund Facts | AMF – Autorite des marches financiers, Fund Facts/ETF Facts – Fidelity, Understanding Fund Facts | GetSmarterAboutMoney.ca, IFSE CIFC Module 2: The Investment Industry, page
2-16.

NEW QUESTION 48
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 49
What is the role of a custodian?

to ensure safekeeping of all the securities in the portfolio

to oversee the general administration of the mutual fund

to construct and manage the portfolio of investments

to calculate the daily net asset value per unit (NAVPU) of the mutual fund

Explanation
A custodian in mutual fund is a trust company, bank, or similar financial institution that is responsible for holding and safeguarding the securities owned within a mutual fund. The custodian also records and reports all transactions to the fund manager. The custodian does not oversee the general administration, construct and manage the portfolio, or calculate the NAVPU of the mutual fund. These are the roles of other entities such as the fund administrator, the fund manager, and the fund accountant.
References = Canadian Investment Funds Course (CIFC) – Module 2: Investment Products – Section 2.2:
Mutual Funds1 and web search results from search_web(query=”role of a custodian in mutual funds”)23
1: https://www.ifse.ca/wp-content/uploads/2021/08/CIFC-Module-2.pdf

NEW QUESTION 50
Which information is typically included in the Letter of Engagement?

Client’s responsibilities

Process for complaints

Investment Objective

Payee for deposits

NEW QUESTION 51
Lior is considering an investment that gains exposure to companies that trade on the Toronto Stock Exchange (TSX). He is not sure what the differences are between a Canadian equity fund and a Canadian dividend fund.
What would you tell him?

Equity funds are more appropriate than dividend funds if Lior requires a steady flow of income.

Dividend funds generate tax-preferred income while income from equity funds is fully taxable.

Dividend funds tend to be less volatile and lower risk than equity funds.

Equity funds hold common shares while dividend funds hold only preferred shares.

NEW QUESTION 52
Janine will celebrate her 71st birthday this year. She currently has a lot of money in a personal registered retirement savings plan (RRSP) and knows there are rules about what she can do with those funds. Which of the following is TRUE?

She can convert her RRSP to a locked-in retirement income fund (LRIF).

She can convert her RRSP to a registered retirement income fund (RRIF) this year or by December 31st of next year.

She can take the entire amount in cash, with no tax consequences because her RRSP funds were tax-sheltered.

She can purchase a registered term or life annuity.

NEW QUESTION 53
You are meeting a potential client, William, for the first time. He is a high net worth individual and you are keen to get his business. Which of the following would you consider the most important to create an impressive first impression on your potential client?

your body language

volume of your voice

your words

tone of your voice

NEW QUESTION 54
During the calendar year, Firmansyah received a $1,800 eligible dividend from a large Canadian bank and a foreign, dividend from his The USD/CAD exchange rates is 1.3605.
Firmansyah’s federal marginal tax bracket is 29%. The enhanced dividend gross-up rate is 38% and the federal dividend tax credit rate for eligible dividends is 15%.
What federal tax liability will be due from the investment income?

$522.00

$348.00

$695.76

$870.00

NEW QUESTION 55
Which of the following statements best describes dollar-cost averaging?

It is a type of systematic withdrawal program.

It is buying a set dollar amount of a mutual fund on a regular basis

It is the strategy of purchasing a set number of units of a mutual fund on a regular basis.

It is making lump-sum purchases when the market price for a mutual fund is low.

NEW QUESTION 56
Which of the followings describes segregated funds?

Segregated funds have high returns, high management fees, and cannot be redeemed until the maturity date of the contract.

Segregated funds flow through capital losses to investors because the investors are the owners of the underlying fund.

Segregated funds offer some protection of the capital invested but there is an added cost for the protection.

Segregated funds are subject to securities regulation because they are distributed by mutual fund dealing representatives.

Explanation
Segregated funds offer some protection of the capital invested but there is an added cost for the protection.
Segregated funds are contracts issued by life insurance companies that invest in underlying funds, similar to mutual funds. Segregated funds have a maturity guarantee and a death benefit guarantee, which ensure that the investor or their beneficiary will receive a certain percentage of their initial investment, regardless of market fluctuations. However, these guarantees come at a cost, which is reflected in higher management fees and insurance fees than mutual funds. Segregated funds do not have high returns, as they depend on the performance of the underlying funds. Segregated funds can be redeemed before the maturity date of the contract, but they may be subject to early redemption fees or market value adjustments. Segregated funds do not flow through capital losses to investors, as they are not considered owners of the underlying fund.
Segregated funds are subject to insurance regulation, not securities regulation, because they are distributed by life insurance agents. References: Segregated Funds

NEW QUESTION 57
Barend is a Dealing Representative with Planvest Group Inc., a mutual fund dealer and member of the Mutual Fund Dealers Association of Canada (MFDA). Which of the following CORRECTLY describes Barend’s obligation for conflicts of interest?

Barend must identify material conflicts of interest and implement controls on behalf of the firm.

Barend must disclose material conflicts of interest that cannot be addressed in the best interest of the client.

Barend must avoid material conflicts of interest that cannot be addressed in the best interest of the client.

Barend must identify material conflicts of interest and promptly report the conflicts of interest to clients.

Explanation
A conflict of interest is a situation where an individual or a firm has competing or incompatible interests that may affect their ability to act fairly, honestly, and in the best interest of their clients. A material conflict of interest is a conflict of interest that a reasonable person would expect to know about and that may influence the client’s decision to enter into or maintain a business relationship with the individual or the firm. According to the MFDA rules, Barend has an obligation to identify and address material conflicts of interest in a manner that prioritizes the client’s interest over his own or the firm’s interest1. If a material conflict of interest cannot be addressed in the best interest of the client, Barend must disclose it to the client before opening an account, providing advice, or executing a transaction. The disclosure must be clear, meaningful, and timely, and it must explain the nature and extent of the conflict of interest and how it could affect the client’s interests2. Barend must also obtain the client’s written consent to proceed with the account opening, advice, or transaction despite the conflict of interest. Barend must avoid material conflicts of interest that are prohibited by law or that would result in a breach of his fiduciary duty to the client. Barend must also report any material conflicts of interest to his firm and comply with the firm’s policies and procedures for managing conflicts of interest3. References:
MFDA Rule 2.1.4 – Conflicts of Interest1
MFDA Policy No. 2 – Minimum Standards for Account Supervision2
MFDA Policy No. 9 – Disclosure of Conflicts of Interest (Outside Business Activities)3

NEW QUESTION 58
Which of the following is typical for a normal yield curve?

short and long term rates are the same

long term rates are lower than short term rates

yields decline as term to maturity increases

short term rates are lower than long term rates

Explanation
A yield curve is a graphical representation of the relationship between the interest rates (or yields) and the term to maturity of different fixed income securities, such as bonds or debentures. A normal yield curve is upward sloping, meaning that the interest rates increase as the term to maturity increases. This is because investors typically demand higher compensation for lending their money for longer periods of time, as they face more uncertainty and risk. Therefore, a normal yield curve implies that short term rates are lower than long term rates.
References: Canadian Investment Funds Course, Unit 5, Section 5.2

NEW QUESTION 59
Which of the following statements is TRUE about inflation?

Inflation results in a redistribution of income from borrowers to lenders.

Generally inflation will benefit those who are living on investment income.

Purchasing power rises as inflation rises.

An increase in the inflation rate could mean investors have less money to invest.

Explanation
Inflation is the general increase in the prices of goods and services over time. Inflation reduces the purchasing power of money, meaning that a dollar can buy less than it used to. Inflation also erodes the real value of investment income, such as interest, dividends, and capital gains. Therefore, an increase in the inflation rate could mean that investors have less money to invest, as their income and savings lose value.
References = Canadian Investment Funds Course, Unit 5: Types of Investments, Lesson 1: Economic Factors and Financial Markets, Section 5.1.2: Inflation1; CIFC prepkit, Chapter 5: Types of Investments, Question
5.1.2 2

NEW QUESTION 60
David had $10,000 in his investment account with Dynamic Investments, a mutual funds dealer. On June 28, David wants to buy 500 units in ABC Canadian Dividend Fund that has a Net Asset Value Per Unit (NAVPU) of $14.10. His friend Robert suggests that he may get a better price if he used the strategy of dollar-cost averaging. David then instructs his Dealing Representative to place a purchase order for 100 units on the first of every month starting July 1st for the next 5 months.
The orders are executed at the following NAVPUs.
July 01, $14.00
Aug. 01, $14.50
Sep. 01, $15.00
Oct. 01, $14.25
Nov. 01, $16.50
Did David get a better purchase price following the dollar-cost averaging strategy compared to making a lump-sum purchase of 500 shares on Jun 28, 20xx?

David got his 500 units at the same price as the lump sum price he would have paid.

David got his 500 units at a lower price than the lump sum price he would have paid.

David realizes that Dollar cost averaging is the best strategy for getting lower prices.

David got his 500 units at a higher price than the lump sum price he would have paid

Loading …

Download the Latest CIFC Dump – 2024 CIFC Exam Question Bank: https://www.latestcram.com/CIFC-exam-cram-questions.html

Related Certifications

EX447 (1)
EX200 (1)

Free Cram & Latest Exams Dumps

Apr-2024 IFSE Institute CIFC Actual Questions and Braindumps [Q45-Q60]

leave a comment Cancel reply

Related Certifications

Recent Posts

Archives

Categories