IFC by CISI Valid Free Exam Practice Test

Question 1

Janine will celebrate her 71st birthday this year. She currently has a lot of money in a personal registered retirement savings plan (RRSP) and knows there are rules about what she can do with those funds. Which of the following is TRUE?

A. She can convert her RRSP to a locked-in retirement income fund (LRIF). B. She can convert her RRSP to a registered retirement income fund (RRIF) this year or by December 31st of next year. C. She can purchase a registered term or life annuity. D. She can take the entire amount in cash, with no tax consequences because her RRSP funds were tax- sheltered.

Correct Answer: B

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Question 2

The portfolio manager of the High Income Fund has 90% of the mutual fund invested in bonds. What is a reason for holding bonds in a mutual fund portfolio?

A. Bonds produce regular capital gain payments which result in preferential tax treatment for unitholders. B. To increase the dividend yield and credit quality of the mutual fund C. Coupon payments paid by bonds from large Canadian corporations are eligible for preferential tax treatment. D. Bonds provide regular interest income which can be flowed out directly to investors.

Correct Answer: D

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Question 3

All other factors being equal, which fund outperformed the benchmark during this period? The benchmark return is 4.75%.
Fund
Starting NAV ($)
Ending NAV ($)
ABC
21.15
22.09
FED
25.37
26.61
MCQ
30.14
31.55
XYZ
31.00
31.99

A. MCQ B. FED C. XYZ D. ABC

Correct Answer: A

Question 4

What type of investment account has the option to open it with rights of survivorship?

A. Non-registered B. Corporate C. Trust D. Registered

Correct Answer: A

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Question 5

Eleanora receives a $500 eligible Canadian dividend from her mutual fund. Her federal marginal tax rate for the year is 29%. Assuming the enhanced gross-up of 38% and a federal dividend tax credit of 15.02%, how much federal tax will she pay on her dividend?

A. $96.46 B. $115.40 C. $69.90 D. $189.16

Correct Answer: A

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Question 6

Which of the following statements about pension adjustments (PA) is TRUE?

A. You will receive a PA whether you are in a defined contribution or a defined benefit pension plan. B. They represent how much your pension will increase due to years of service. C. They increase your registered retirement savings plan (RRSP) room by the amount of the pension adjustment. D. They represent how much your pension is reduced due to market conditions.

Correct Answer: A

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Question 7

What type of risk is the fundamental risk factor for fixed-income securities?

A. Market risk B. Reinvestment risk C. Interest rate risk D. Liquidity risk

Correct Answer: C

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Question 8

The ZZZ Money Market Fund has a 7-day yield of 0.05%. What is the current yield for the fund? Round your answer to two decimal places.

A. 1.61% B. 0.05% C. 2.22% D. 2.61%

Correct Answer: D

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CISI Investment Funds in Canada (IFC) - IFC Exam Practice Test