CIFC – Prepaway Exam Dumps

NEW QUESTION 99
What purpose does it serve for non-money market mutual funds to hold money market instruments?

Money market instruments primarily generate investment income that provides investors with preferential tax treatment.

If the portfolio manager has an immediate need for cash, money market instruments are relatively easy to liquidate.

They are purchased by non-money market funds to satisfy the regulatory requirement of fund diversification.

They ensure that the fair market value of a mutual fund will not drop below a minimal market value.

NEW QUESTION 100
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?

She can convert her RRSP to a locked-in retirement income fund (LRIF).

She can convert her RRSP to a registered retirement income fund (RRIF) this year or by December 31st of next year.

She can take the entire amount in cash, with no tax consequences because her RRSP funds were tax-sheltered.

She can purchase a registered term or life annuity.

NEW QUESTION 101
Jonathan is a Dealing Representative who has just finished an appointment with his new client, Shirley.
Jonathan has concluded that Shirley has a low-risk profile but wants to establish additional savings of
$500,000. During their discussion, Shirley emphasizes she wants investments that are also tax efficient.
Jonathan learned that currently Shirley has no registered retirement savings plan (RRSP) and tax-free savings account (TFSA) contribution room due to using those opportunities by investmenting elsewhere.
What variable is a PRIMARY consideration for Jonathan when making an investment recommendation?

Investment objective

Shirley’s risk profile.

Expected time horizon.

The tax consequences.

NEW QUESTION 102
Which of the following formulas correctly shows how taxable income is calculated?

gross income less tax credits

the sum of earned income and investment income

total income less tax deductions

the sum of income from all sources

NEW QUESTION 103
Salvatore and Harriet recently got married. They are presently renting but are looking forward to buying a new home within 5 years. They both have separate savings established in their respective registered retirement savings plans (RRSPs) of $100,000 each. They have come to Dustin, a Dealing Representative, to open an additional joint investment account to increase their savings to assist with their future plans of buying a new home.
What does Dustin need to ensure about his recommendation?

That the recommended investment is different from what they currently own to avoid over-concentration.

That the risk profile for this new account is the same as what has been determined for other accounts.

That the risk profile of the investment and each client’s individual risk profile are a match.

That the investment recommendation is based on the risk profile of the new joint account.

NEW QUESTION 104
Jehona is a Dealing Representative with Vista Wealth Investments Inc., a mutual fund dealer in Ontario and Nova Scotia. Jehona has reviewed her client Sokol’s account and wants to adjust the holdings and re-balance the portfolio. Which of the following statements about Jehona’s permitted activities is CORRECT?

If Sokol has signed a Limited Authorization Form, Jehona can process the trades in the account without Sokol’s pre-approval.

If Jehona wants to execute trades for Sokol’s account, Sokol must provide his specific authorization before the trades are entered.

If Sokol has given Jehona discretionary trading authority, Jehona can process trades in the account without Sokol’s pre-approval.

If Jehona wants to execute the trades without Sokol’s pre-approval, Sokol must first appoint Jehona as his Power of Attorney.

NEW QUESTION 105
You have been researching Canadian equity mutual funds for a new client. You come across the following information.

What can you conclude from this information?

Chamberlain Equity Fund has lower volatility since its 5-year annualized return is higher.

Fontaine Equity Fund is a better fund because it has a higher quartile ranking.

Fontaine Equity Fund has a lower risk level since its Sharpe Ratio is lower.

Fontaine Equity Fund’s higher MER contributes to its lower 5-year annualized return.

NEW QUESTION 106
Maxine is a portfolio manager who 15 years ago, purchased 100 shares of Never2Tacky, a social media corporation for Aspirations Global Technology Fund. She purchased the stock when it was trading at $10. Last year, the peak market price was $120. Presently, it is trading at $99. News agencies are now reporting that additional regulations regarding social media companies are about to be agreed upon by G7 countries. Maxine is concerned the market value of Never2Tacky is going to drop. She buys a put option with an exercise price of $95 with an expiry of 9 months.
What type of strategy is Maxine using?

Speculating

Modern portfolio theory

Passively managing

Hedging

NEW QUESTION 107
What information can be found from a simplified prospectus instead of Fund Facts?

Costs associated with mutual fund investing.

A summary of the top 10 investment holdings.

The investment strategies that are being used or proposed to be used.

Investor rights regarding cancelling an order.

Explanation
A simplified prospectus is a legal document that provides essential information about a mutual fund, such as its investment objectives, strategies, risks, fees, performance, and distribution policy. A simplified prospectus also contains information about the fund manager, the dealer, and the rights of investors. A fund facts is a summary document that highlights the key information from the simplified prospectus in a concise and easy-to-read format. A fund facts is delivered to investors before or at the time of purchase of a mutual fund12 One of the information that can be found from a simplified prospectus instead of fund facts is the investment strategies that are being used or proposed to be used by the mutual fund. The investment strategies describe how the fund manager intends to achieve the fund’s investment objectives, such as the types of securities, markets, sectors, or styles that the fund will invest in, the asset allocation or diversification policy, the use of derivatives or leverage, or the criteria for selecting or selling securities. The investment strategies may also include any restrictions or limitations that the fund must follow, such as the minimum or maximum exposure to certain securities, markets, or sectors, or the adherence to any ethical, environmental, social, or governance (ESG) principles. The investment strategies provide investors with a detailed and comprehensive understanding of how the fund operates and what risks it may entail34 The other options are not correct, as they can be found in both the simplified prospectus and the fund facts.
The costs associated with mutual fund investing include the sales charges, trailing commissions, management fees, operating expenses, and taxes that investors may have to pay when they buy, hold, or sell a mutual fund.
These costs are disclosed in both documents, as they affect the returns and performance of the fund12 A summary of the top 10 investment holdings shows the largest positions that the fund holds in its portfolio, such as the names and percentages of the securities, markets, or sectors that the fund invests in. This summary gives investors a snapshot of the fund’s composition and diversification, and it is updated regularly in both documents12 Investor rights regarding cancelling an order refer to the right of withdrawal and the right of rescission that investors have when they purchase a mutual fund. The right of withdrawal allows investors to cancel their purchase within two business days of receiving the fund facts or the confirmation of purchase, and receive a refund of the purchase price or the market value of the fund, whichever is less. The right of rescission allows investors to cancel their purchase within 48 hours of receiving the confirmation of purchase, if they did not receive the fund facts before or at the time of purchase, and receive a refund of the purchase price or the market value of the fund, whichever is less. These rights are explained in both documents, as they protect the interests of investors12 References = Canadian Investment Funds Course, Unit 6: Mutual Funds, Lesson 4: Mutual Fund Disclosure Documents, Section 6.4.1: Simplified Prospectus 1; Canadian Investment Funds Course, Unit 6: Mutual Funds, Lesson 4: Mutual Fund Disclosure Documents, Section 6.4.2: Fund Facts 2; CIFC prepkit, Chapter 6:
Mutual Funds, Question 6.4.1 3; CIFC prepkit, Chapter 6: Mutual Funds, Question 6.4.2 4

NEW QUESTION 108
What purpose does it serve for non-money market mutual funds to hold money market instruments?

Money market instruments primarily generate investment income that provides investors with preferential tax treatment.

If the portfolio manager has an immediate need for cash, money market instruments are relatively easy to liquidate.

They are purchased by non-money market funds to satisfy the regulatory requirement of fund diversification.

They ensure that the fair market value of a mutual fund will not drop below a minimal market value.

NEW QUESTION 109
Sarah and Kyle are a married couple. They are both 34 years of age and work as teachers. Their combined annual income is $130,000. They are able to save $800 each month. They own a home worth $340,000 with a
$120,000 mortgage. Since they work for the same employer, they have the same defined benefit pension plan.
Other than a tax-free savings account (TFSA) in Kyle’s name with $5,000, they do not have any other assets.
They are avid sailors and want to save towards a purchase of a sailboat. For the type of sailboat they want, they estimate it should cost around $65,000. They want you to recommend an investment for their monthly savings to help them achieve their goal faster.
What question should you ask them next?

How would you feel if you lost part of your money in the short-term?

What is your investment objective for these savings?

What is your net worth?

How much do you make individually each year?

NEW QUESTION 110
Which of the following statements is TRUE about inflation?

Inflation results in a redistribution of income from borrowers to lenders.

Generally inflation will benefit those who are living on investment income.

Purchasing power rises as inflation rises.

An increase in the inflation rate could mean investors have less money to invest.

NEW QUESTION 111
Sujay contributes 3% of his $60,000 salary to his employer’s defined contribution pension plan. His employer contributes the same amount to the plan. How will this affect his registered retirement savings plan (RRSP) contribution room for the year?

It will have no effect. RRSP contribution room is based on earned income only.

It will reduce Suiay’s contribution room by 51,800.

It will reduce Suiay’s contribution room by $1800

It will reduce Suiay’s contribution room by $3,600.

NEW QUESTION 112
Sandra presently participates in her employer-sponsored defined contribution pension plan (DCPP). As contributions continue to be made into her plan, what can she expect?

Retirement benefits will be based on a prescribed formula that can be referenced from the plan’s terms and conditions.

The employer will solely make contributions to her DCPP based on a prescribed formula noted within her plan.

Her available registered retirement savings plan (RRSP) contribution room will be reduced by what is being contributed to her plan.

To ensure she has savings at retirement, the employer will choose stable investments to grow her retirement savings.

NEW QUESTION 113
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.

$37,888

$36,698

$42,861

$35,859

NEW QUESTION 114
When you buy a put option, which of the following is TRUE?

You have the right to sell a set number of shares at a set price.

You have the right to purchase a set number of shares at a set price.

You have the obligation to sell a set number of shares at a set price.

You have the obligation to buy a set number of shares at a set price.

NEW QUESTION 115
What information does Fund Facts provide to potential investors?

What the mutual fund is currently investing in.

How to calculate the taxes owed from investment income.

The portfolio management strategy that is used.

The remuneration paid to the Independent Review Committee.

NEW QUESTION 116
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?

She can convert her RRSP to a locked-in retirement income fund (LRIF).

She can convert her RRSP to a registered retirement income fund (RRIF) this year or by December 31st of next year.

She can take the entire amount in cash, with no tax consequences because her RRSP funds were tax-sheltered.

She can purchase a registered term or life annuity.

NEW QUESTION 117
Your employer has a contributory group RRSP under which he matches employee contributions, up to a maximum of 5% of salary.
Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

It is more costly and time consuming to administer than traditional pension plans.

If you leave your employer, your group RRSP stays with the employer.

You need to wait until you file your taxes to receive your contribution tax deduction.

The employer chooses the plan provider.

NEW QUESTION 118
Wilma has always used the services of a tax preparation firm to file her taxes but is skeptical that she has really benefitted. This year she plans to file her own taxes for the first time.
What would be useful for her to know?

Wilma’s marginal tax rate may be lowered when tax deductions are applied to her total income.

Wilma’s top marginal tax rate will be applied to every taxable dollar when her tax return is filed.

Wilma’s tax deductions permit her to reduce her tax payable dollar-for-dollar.

Wilma’s non-refundable tax credits may only reduce her taxable income dollar-for-dollar.

NEW QUESTION 119
Ken is a member of his employer’s Defined Benefit Pension Plan (DBPP). Which of the following statements about Ken’s plan is CORRECT?

Contributions to the plan do not result in a Pension Adjustment (PA) for Ken.

The amount Ken receives in retirement depends on the performance of the investments he has selected within the plan.

The amount that Ken will receive at retirement is not guaranteed.

Income received from the plan is eligible for pension income splitting even if Ken retires before 65.

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