CIFC Practice Test

Yesterday, Mariana purchased mutual funds for the first time from Diablo, who is a Dealing Representative for Horizon Financial. When Mariana mentions to her friend Marcus that she just started to invest, Marcus confides that he experienced losses from mutual fund investing. Her initial feelings of excitement have now changed to worry and regret. She wished she had talked to her friend before investing and wonders if she can change her mind.

Which statement regarding the right of withdrawal applies?

A. The right of withdrawal is based on the securities act legislation within the jurisdiction the purchase occurred.

B. Before Mariana can cancel her order, she must wait two business days to pass before she can cancel her order.

C. How the right of withdrawal can be applied is determined by the Mutual Fund Dealers Association of Canada's conduct rules.

D. The Canadian Securities Administrators have instituted national instruments regarding Mariana's right to cancel her order.

Ai Fen has recently become registered to sell mutual funds with Acadian Eastern Financial, a mutual fund dealer. Ai Fen determined that with her background of being a Chartered Financial Analyst, she can help people understand the nature of investing more easily than others in her field.

Which registration category will need to be prominently noted on Ai Fen’s business card to comply with the “holding out rule”?

A. Dealing Representative

B. Registered Representative

C. Investment Representative

D. Chartered Financial Analyst

Which of the following is included when calculating a country's gross domestic product (GDP)?

A. total income of all employed individuals

B. the cost of all goods produced

C. the market value of goods and services sold to final users

D. the value of work done by volunteers

Xerxes, 45 years old, is a successful architect, having an annual income of $185,000. He has around $10,000 in his non-registered account, which he is looking to invest in a tax-efficient manner.

From the following options, which would be the most tax-efficient?

A. target date fund

B. bond fund

C. asset allocation fund

D. Canadian equity index fund

Which of the following statements is TRUE about the movement of business cycles in the Canadian economy?

A. A period of economic expansion is followed by a period of economic contraction.

B. A period of economic expansion is of the same length in every cycle.

C. A period of economic expansion is always of the same length as a period of economic contraction.

D. A period of at least 3 consecutive months of contraction is called a recession.