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IFSE Institute Canadian Investment Funds Course Exam Sample Questions (Q202-Q207):
NEW QUESTION # 202
Sheldon is a 25 year old graphic designer. He has just started working and saves regularly. Apart from his regular salary he also earns extra money from freelancing after office hours and during weekends. His earnings from his freelance work are sufficient for meeting his living expenses. He saves the entire amount of his salary. He has heard about lifecycle funds but has come to you for additional information.
Which of the following statement about lifecycle funds is TRUE?
- A. The asset allocation of a lifecycle fund is set based on the age demographic of its unitholders and remains the same for the time frame of the lifecycle fund.
- B. As Sheldon gets older, the life cycle asset allocation changes from more risky to less risky.
- C. Investor income is the only basis for changing the asset allocation of a lifecycle mutual fund.
- D. All lifecycle funds start with equal allocations to cash, fixed income and equities before being re-balanced.
Answer: B
NEW QUESTION # 203
Which of the following statements best describes dollar-cost averaging?
- A. It is making lump-sum purchases when the market price for a mutual fund is low.
- B. It is the strategy of purchasing a set number of units of a mutual fund on a regular basis.
- C. It is a type of systematic withdrawal program.
- D. It is buying a set dollar amount of a mutual fund on a regular basis
Answer: D
Explanation:
Explanation
Dollar-cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of a security. This strategy can reduce the overall impact of price volatility and lower the average cost per share. By buying regularly in up and down markets, investors buy more shares at lower prices and fewer shares at higher prices. Dollar-cost averaging aims to prevent a poorly timed lump sum investment at a potentially higher price. References: What Is Dollar-Cost Averaging? - Investopedia
NEW QUESTION # 204
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.)
- A. $17,472
- B. $25,480
- C. $18,754
- D. $24,000
Answer: C
Explanation:
Explanation
Kerry's taxable income would be $98,000 ($100,000 - $2,000). Using the federal tax rates provided in the image, the first $48,535 of her income would be taxed at 15%, the next $48,534 at 20.5%, and the remaining
$931 at 26%. This would result in a total federal tax payable of $18,754. You can see the calculation in detail below:
Taxable Income
Marginal Tax Rate
Federal Tax Payable
$0 - $48,535
15%
$7,280.25
$48,536 - $97,069
20.5%
$9,934.47
$97,070 - $98,000
26%
$539.80
Total
$18,754.52
Note: The final answer is rounded to the closest whole dollar.
References: Canadian Investment Funds Course, Unit 8, Section 8.2; [4]
NEW QUESTION # 205
A client has $950,000 in his RRSP account and $550,000 in his non-registered account held in nominee name with Tradewell Mutual Funds.
In the event of his dealer, Tradewell Mutual Funds declaring insolvency, what is the total amount the client be eligible to receive from the Mutual Fund Dealers Association of Canada Investor Protection Corporation (IPC)?
- A. The client will be eligible for coverage of $550,000.
- B. The client will be eligible for coverage of $950,000.
- C. The client will not be eligible for any coverage.
- D. The client will be eligible for coverage of $1,500.000.
Answer: B
NEW QUESTION # 206
Which of the following are obligations on mutual fund dealing representatives imposed by The Proceeds of Crime (Money Laundering) and Terrorist Financing Act?
- A. record-keeping of large transactions, account-related information, and other relevant records
- B. reporting all financial transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
- C. confirming client identity each time before concluding any transaction
- D. enhancing public awareness of matters related to money laundering and terrorist financing
Answer: A
NEW QUESTION # 207
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