CIFC Practice Online

Question 1

Faruq is a Dealing Representative with Smart Planning Group, a mutual fund dealer. Faruq meets with his new client, Taline, and learns that she lives on a low, fixed income. Taline tells Faruq that she wants to maximize her investment returns as high as possible to make up the difference. Taline also indicates that she cannot afford large investment losses because her income is low. Which of the following CORRECTLY describes how Faruq should assess Taline’s risk profile?

A :

Taline’s risk profile should be “high” because she is willing to accept risk in order to maximize her investment returns.

B :

Faruq should override the risk that Taline is able to accept because her return expectations cannot otherwise be met.

C : Faruq should assess Taline’s risk profile based on the higher of her: (1) risk tolerance and (2) risk capacity

D :

Taline’s risk profile should be “low” because her risk capacity is low and she cannot afford large investment losses.

Answer: D

Question 2

In a mutual fund dealer, who is the person responsible for establishing and maintaining compliance policies and procedures as well as monitoring and assessing compliance?

A : the chief executive officer

B : the ultimate designated person

C : the trustee

D : the chief compliance officer

Answer: D

Question 3

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

Answer: D

Question 4

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.

Answer: A

Question 5

Which of the following statements about your mutual fund registration is CORRECT?

A :

You can sell mutual funds anywhere in Canada as long as you are registered with one of the provincial or territorial securities commissions.

B :

Your online application must be reviewed and approved by your mutual fund dealer before you can begin to sell mutual funds

C : You must renew your registration through the online NRD system every two years

D :

You must inform the regulatory authorities of any material or significant changes to your personal circumstances.

Answer: D

Name:	Canadian Investment Funds Course
Exam Code:	CIFC
Certification:	IFSE Investments & Banking
Vendor:	IFSE Institute
Total Questions:	100
Last Updated:	May 16, 2024

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