Online Access Free IFC Practice Test

Which among the following plans includes a provision that places a maximum limit on the amount that can be withdrawn during a calendar year?

• A.Registered Retirement Income Fund (RRIF)
• B.Deferred Profit Sharing Plan (DPSP)
• C.Life Income Fund (LIF)
• D.Registered Retirement Savings Plan (RRSP)

You have been researching Canadian equity mutual funds for a new client. You come across the following information.

What can you conclude from this information?

• A.Fontaine Equity Fund is a better fund because it has a higher quartile ranking.
• B.Fontaine Equity Fund's higher MER contributes to its lower 5-year annualized return.
• C.Fontaine Equity Fund has a lower risk level since its Sharpe Ratio is lower.
• D.Chamberlain Equity Fund has lower volatility since its 5-year annualized return is higher.

Yesterday, Mariana who is new to investing and purchased mutual funds for the very first time. She shared her excitement with her good friend, Julius. However, after Julius learned about her investment, he admits that he had a bad experience with mutual fund investing and that he lost money. Mariana regrets not talking to Julius prior to making her decision. Her feelings of enthusiasm have changed to fear. She is wondering if it is too late to change her mind and cancel her purchase order.
Which statement regarding the right of withdrawal is CORRECT?

• A.Mariana has to wait two business after her purchase order has been settled to exercise the right of withdrawal.
• B.The Mutual Fund Dealers Association of Canada (MFDA) have written conduct rules regarding the right of withdrawal.
• C.The right of withdrawal for investors can be different depending on which province (or territory) the fund was purchased within.
• D.The Canadian Securities Administrators (CSA) created legislation that addresses the right of withdrawal for investors.

Which statement regarding the underwriting process and over-the-counter (OTC) markets is CORRECT?

• A.During the underwriting process investment bankers raise investment capital from investors on behalf of corporations and governments issuing securities.
• B.Corporations must have their shares listed both on an exchange and the OTC market during the underwriting process.
• C.Many new stock issues that are underwritten by securities firms are first listed on a stock exchange before they are sold over-the-counter.
• D.The disclosure standards for stock exchanges are not as stringent as those imposed by the OTC market.

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%

• A.3%
• B.-3%
• C.8%
• D.7%