- Email support@dumps4free.com
You are collecting know your client (KYC) information for your new client, Yael. She has recently accepted an early retirement package from her employer and has $100,000 to invest. She is looking for an investment that will provide income to help pay her ongoing monthly expenses. Without this extra income, she would have trouble paying her bills. From your discussions, Yael understands that markets fluctuate and says she is comfortable with high risk. Which of the following would be a suitable investment?
A. global equity fund
B. money market fund
C. mortgage fund
D. Canadian equity index fund
Explanation:
A mortgage fund is a type of income fund that invests in mortgages and other debt instruments secured by real estate. It provides a steady stream of income to investors and has a low correlation with other asset classes. A mortgage fund is suitable for Yael because she needs income to pay her monthly expenses and is comfortable with high risk. A global equity fund, a money market fund, and a Canadian equity index fund are not suitable for Yael because they do not meet her income objective and risk tolerance.
References:
Canadian Investment Funds Course (CIFC) | IFSE Institute, Unit 6, Lesson 4
Which among the following BEST describes a company’s income statement?
A. It shows the amount of profit that is reinvested in the company in the form of retained earnings.
B. It shows the amount of capital contributed to the company by its shareholders or owners.
C. It shows the earnings and expenses of a business over a period of time.
D. It provides a snapshot of a company's financial position at a specific point in time
Explanation:
An income statement is a financial report that shows the earnings and expenses of a business over a period of time, such as a month, a quarter, or a year. It also shows the net income or net loss of the business, which is the difference between the total revenues and the total expenses. An income statement helps investors and creditors evaluate the profitability, performance, and risk of a business. The other options are not accurate descriptions of an income statement. Option A describes retained earnings, which are part of the equity section of the balance sheet. Option B describes contributed capital, which is also part of the equity section of the balance sheet. Option D describes the balance sheet, which is another financial statement that shows the assets, liabilities, and equity of a business at a specific point in time.
References:
Income Statement - Definition, Explanation and Examples, Income Statement: How to Read and Use It - Investopedia, How to Prepare an Income Statement | HBS Online
Which of the following statements describes a feature of the Home Buyers’ Plan (HBP)?
A. To qualify- as a first-time home buyer you or your spouse must never have previously owned a home
B. Once you are required to repay the amounts back to your RRSP. any missed or incomplete payments are subject to tax.
C. A qualifying home must be purchased by December 31 of the year of withdrawal.
D. If you have a spouse or common-law partner, each of you can withdraw up to JE50.000 from your registered retirement savings plans (RRSPs).
Explanation:
The Home Buyers’ Plan (HBP) is a program that allows eligible first-time home buyers to withdraw up to $35,000 from their registered retirement savings plans (RRSPs) to buy or build a qualifying home without paying any tax on the withdrawal. The withdrawn amount must be repaid to the RRSP over a period of up to 15 years, starting from the second year after the withdrawal. If the required repayment for a year is not made, it is added to the taxpayer’s income and subject to tax. Therefore, option B describes a feature of the HBP. The other options are not correct descriptions of the HBP. Option A is false because to qualify as a first-time home buyer, you or your spouse must not have owned and lived in another home as your principal place of residence during the four-year period before the date of withdrawal. Option C is false because a qualifying home must be purchased or built before October 1 of the year following the year of withdrawal. Option D is false because if you have a spouse or common-law partner, each of you can withdraw up to $35,000 from your RRSPs, not $50,000.
References:
[Home Buyers’ Plan (HBP)], [Home Buyers’ Plan (HBP) - Canada.ca], [Home Buyers’ Plan (HBP) | GetSmarterAboutMoney.ca]
When comparing mutual funds, what information would help a Dealing Representative determine a suitable mutual fund for a client?
A. Comparing historical rates of return between different types of mutual funds.
B. Assessing historical differences in the rate of return per unit of risk of similar mutual funds.
C. Referencing the fund code for each mutual fund that is being compared.
D. The rights a client has if there is a desire to cancel the purchased mutual fund.
Explanation:
B is correct because assessing historical differences in the rate of return per unit of risk of similar mutual funds helps a Dealing Representative to compare the performance and risk-adjusted returns of different mutual funds and select the most suitable one for a client’s risk tolerance and investment objectives. Comparing historical rates of return between different types of mutual funds (A) does not account for the risk involved in each type of fund. Referencing the fund code for each mutual fund that is being compared © does not provide any information about the fund’s characteristics, features, or suitability. The rights a client has if there is a desire to cancel the purchased mutual fund (D) are not relevant for determining a suitable mutual fund for a client.
References:
Canadian Investment Funds Course (CIFC) | IFSE Institute
What does a normal yield curve look like?
A. slopes upward to the left
B. is flat and has no slope
C. slopes down to the right
D. slopes upward to the right
Explanation:
A normal yield curve is a graphical representation of the relationship between the interest rates and the maturities of different fixed income securities. It slopes upward to the right, meaning that longer-term bonds have higher yields than shorter-term bonds. This reflects the fact that investors demand higher compensation for lending money for longer periods of time and taking on more risk. A normal yield curve indicates that investors expect the economy to grow steadily and inflation to remain stable.
References:
Canadian Investment Funds Course (CIFC) | IFSE Institute, Unit 4, Lesson 3
| Page 1 out of 6 Pages |