CIFC Practice Test

Francis wants to redeem his US Asset Allocation Fund as he needs the money for a down payment for a home purchase. The current proceeds from the redemption are USD $27,859, and the current CAD/USD exchange rate is 0.7353.

How much will Francis receive in Canadian dollars when he redeems the Funds? Please round your answer to the nearest dollar.

A. $37,888

B. $36,698

C. $42,861

D. $35,859

Last year at age 70, Gregory opened a registered retirement income fund (RRIF). Recently, Gregory unexpectedly received a large cash gift and presently does not need to depend on any payments from his RRIF. He contacts his financial advisor Eric for guidance.

Which of the following statements by his financial advisor would be CORRECT?

A. Periodic contributions to a RRIF are permitted until Gregory reaches the age of 71.

B. Withdrawals become mandatory within the first year of the plan being started.

C. Gregory's account will be subjected to no maximum withdrawal limit but to an annual minimum withdrawal.

D. Gregory must have attained the minimum age of 71 to open a RRIF.

What is the national self-regulatory organization (SRO) for investment dealers?

A. The National Securities Commission

B. The Mutual Fund Dealers Association of Canada

C. The Canadian Securities Administrators

D. The Investment Industry Regulatory Organization of Canada

Exchange traded funds (ETFs) that track an index and index mutual funds have many similarities. However, what is a major difference between these two products?

A. While ETFs are prone to tracking errors, index funds are perfectly aligned with their underlying index.

B. ETFs can be purchased continuously throughout the trading day while index funds can only be bought or sold at the end of the day.

C. The market price of ETFs always matches the underlying basket of securities while there can be a discrepancy in pricing index funds.

D. ETFs do not have management fees since they are exchange traded while index funds do incur such fees.

Terri, 30 years old, is the marketing manager at Provincial Winery with an average annual income of $60,000. Her spouse Yvette, 28 years old, is a project manager with a telecommunications firm earning

$70,000 per year. You are helping them to organize their investments and are trying to assess their financial resources.

Which of the following is the best question to ask?

A. Do you have any children?

B. Do you have pension plans at work?

C. When do you need the money?

D. What is your investment experience?