TrainingDump CIFC dumps & Investments & Banking Sure Practice with 102 Questions
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NEW QUESTION # 58
One of your clients, Harry, has heard that he can defer paying tax on capital gains. He wants to know if what he has heard is correct and if so, how to defer paying taxes on capital gains.
What would you tell Harry?
- A. He should invest in mutual funds just before the dividend paying date to pick up the dividend.
- B. He should hold unprofitable investments as long as possible.
- C. Harry should buy and sell investments actively.
- D. He should hold profitable investments as long as possible.
Answer: A
NEW QUESTION # 59
What purpose does it serve for non-money market mutual funds to hold money market instruments?
- A. They are purchased by non-money market funds to satisfy the regulatory requirement of fund diversification.
- B. Money market instruments primarily generate investment income that provides investors with preferential tax treatment.
- C. They ensure that the fair market value of a mutual fund will not drop below a minimal market value.
- D. If the portfolio manager has an immediate need for cash, money market instruments are relatively easy to liquidate.
Answer: D
NEW QUESTION # 60
You are meeting a potential client, William, for the first time. He is a high net worth individual and you are keen to get his business. Which of the following would you consider the most important to create an impressive first impression on your potential client?
- A. tone of your voice
- B. your body language
- C. volume of your voice
- D. your words
Answer: C
NEW QUESTION # 61
Jasmine purchases a 1-year, $10,000 face value strip bond for $9,600. At maturity, when Jasmine receives
$10,000, which of the following statements is CORRECT?
- A. Jasmine realizes a taxable capital gain of $400.
- B. Jasmine realizes interest income of $400.
- C. Jasmine realizes a taxable dividend of $400.
- D. Jasmine realizes a capital dividend of S400.
Answer: B
NEW QUESTION # 62
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. $115.40
- B. $96.46
- C. $189.16
- D. $69.90
Answer: B
NEW QUESTION # 63
Portia is a Dealing Representative with Highview Wealth Inc., a mutual fund dealer. Portia recommends the Stature Growth Fund to her client Clive. Which of the following CORRECTLY describes what Portia must do in order to satisfy her obligations under the Client Relationship Model (CRM) and Client Focused Reforms (CFR)?
- A. Portia must calculate the net asset value per unit (NAVPU) and report it to Give in the trade confirmation.
- B. Portia must mark the trade as ^unsolicited" if Clive wants to proceed with the trade and it is not suitable for him.
- C. Portia must provide Clive with the pre-trade disclosure to address any material conflicts of interest with the trade.
- D. Portia must disclose the costs, expenses, and ongoing fees associated with the investment prior to the trade.
Answer: D
NEW QUESTION # 64
Daisy is a Dealing Representative registered in the province of Saskatchewan only. Daisy's client, Orville, a resident of Lloydminster, Saskatchewan is a retiree who presently has a $1,000,000 with her dealer, Easy Ride Financial. Orville is now planning to move to Vegreville, Alberta next month. Easy Ride Financial is registered in Alberta and Saskatchewan. Neither Easy Ride Financial nor Daisy have any clients who are resident in Alberta.
Which of the following should Daisy do if she wants to continue to service Orville's account?
- A. Register with a different mutual fund dealer that is registered in Alberta so she can keep Orville as a client.
- B. Daisy could seek permission from her dealer to request a client mobility exemption with the Alberta Securities Commission.
- C. Request approval from the Mutual Fund Dealers Association of Canada to be eligible to be a registered Dealing Representative in Alberta
- D. Daisy will need to forfeit her registration in Saskatchewan if she wants to be registered in Alberta to keep Orville as a client.
Answer: B
NEW QUESTION # 65
David had $10,000 in his investment account with Dynamic Investments, a mutual funds dealer. On June 28, David wants to buy 500 units in ABC Canadian Dividend Fund that has a Net Asset Value Per Unit (NAVPU) of $14.10. His friend Robert suggests that he may get a better price if he used the strategy of dollar-cost averaging. David then instructs his Dealing Representative to place a purchase order for 100 units on the first of every month starting July 1st for the next 5 months.
The orders are executed at the following NAVPUs.
July 01, $14.00
Aug. 01, $14.50
Sep. 01, $15.00
Oct. 01, $14.25
Nov. 01, $16.50
Did David get a better purchase price following the dollar-cost averaging strategy compared to making a lump-sum purchase of 500 shares on Jun 28, 20xx?
- A. David got his 500 units at a lower price than the lump sum price he would have paid.
- B. David got his 500 units at the same price as the lump sum price he would have paid.
- C. David got his 500 units at a higher price than the lump sum price he would have paid
- D. David realizes that Dollar cost averaging is the best strategy for getting lower prices.
Answer: C
NEW QUESTION # 66
Quinton, a Dealing Representative, meets with his client Banji. Banji's Know Your Client (KYC) indicates that her risk profile is "medium''. Banji currently has $35,000 in her account which is invested 50% in the Middleton Balanced Fund and 50% in the Hector Growth Fund. She tells Quinton that she would like to contribute an additional $10,000 to purchase the Prospect Labour-Sponsored Fund. Which of the following statements about Banji's proposed transaction is CORRECT?
- A. Quinton can proceed with the purchase of the Prospect Labour-Sponsored Fund because it is suitable for Banji based on her current KYC.
- B. Quinton should update Banji's risk profile to "high" so that he can proceed with the purchase of the Prospect Labour-Sponsored Fund.
- C. Quinton should not proceed with the purchase of the Prospect Labour-Sponsored Fund because it is not suitable for Banji based on her current KYC.
- D. Quinton must provide Banji with full disclosure about the risks so that he can proceed with the purchase of the Prospect Labour-Sponsored Fund.
Answer: C
NEW QUESTION # 67
Which of the following statements is TRUE about the movement of business cycles in the Canadian economy?
- A. A period of at least 3 consecutive months of contraction is called a recession.
- 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 economic expansion is followed by a period of economic contraction.
Answer: D
NEW QUESTION # 68
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. $42,861
- B. $37,888
- C. $36,698
- D. $35,859
Answer: B
NEW QUESTION # 69
Sven owns preferred shares that give him the option to sell his holdings back to the issuing company at a predetermined price and within a specified time. What type of preferred shares does Sven own?
- A. convertible
- B. redeemable
- C. retractable
- D. participating
Answer: C
NEW QUESTION # 70
Marta is turning 71 years old this year. She will have to convert her registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF). Which of the following statements is TRUE?
- A. She will be able to continue contributing to her RRIF and be subject to the same annual limits as her RRSP.
- B. She will be subject to annual maximum withdrawal limits.
- C. She does not have to withdraw the minimum amount this year.
- D. When she converts her RRSP to a RRIF, she will incur a tax liability.
Answer: C
NEW QUESTION # 71
Which information is typically included in the Letter of Engagement?
- A. Process for complaints
- B. Investment Objective
- C. Payee for deposits
- D. Client's responsibilities
Answer: D
NEW QUESTION # 72
What is the national self-regulatory organization (SRO) for investment dealers?
- A. The Canadian Securities Administrators
- B. The National Securities Commission
- C. The Investment Industry Regulatory Organization of Canada
- D. The Mutual Fund Dealers Association of Canada
Answer: C
NEW QUESTION # 73
Pierre wants to discuss the merits of a specific mutual fund with his Dealing Representative, Simone. There are no trailer fees associated with this fund. Simone is familiar with the mutual fund that Pierre is referring to, which is not offered by her dealer. They schedule an appointment to further discuss his investment portfolio.
Which behaviour from Simone is ethical?
- A. When comparing her dealer's own mutual funds to the one Pierre discovered, Simone emphasizes the importance of similar net rates of return and minimizes the significance of management expense ratios (MERs).
- B. Knowing Pierre does not like that her dealer's funds have trailer fees, she chooses not to discuss the relationship between trailer fees and MER while making comparisons.
- C. While comparing Fund Facts of the different mutual funds, Simone points out that not only are the fund management expenses different but so are the investor profiles for each fund.
- D. Simone's ability to keep her knowledge current on competitors' investment offerings shows that she is putting her client's interest first.
Answer: C
NEW QUESTION # 74
Maalik opens an account for a new client, John. During the new account process, Maalik determines that he will need to confirm John's identity. Which of the following statements about Maalik's identification requirements is CORRECT?
- A. If Maalik learns that John is the president of a state-owned company, Maalik is required to report John as a Politically Exposed Foreign Person (PEFP) to his dealer. If John is not a US person, the dealer must report the account to the Internal Revenue Service (IRS).
- B. If John wants to make a large cash deposit of $10,000 or more, Maalik is required to collect personal information about John and report it to his dealer. The dealer must report the information to the Canada Revenue Agency (CRA).
- C. If Maalik determines that there is anything suspicious about John's transaction, he is required to report the matter to his dealer. The dealer must report the matter to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
- D. If John attempts to make a suspicious deposit, Maalik is required to report the attempt to his dealer. The dealer must keep records of attempted suspicious transactions that are not reported to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
Answer: C
NEW QUESTION # 75
Pierre buys a call option on a stock. What is the implication of this transaction?
- A. Pierre has the right to buy the stock if he exercises the option.
- B. Pierre has the right to sell the stock if he exercises the option.
- C. Pierre is obligated to buy the stock if the option is exercised.
- D. Pierre is obligated to sell the stock if the option is exercised.
Answer: A
NEW QUESTION # 76
Lior is considering an investment that gains exposure to companies that trade on the Toronto Stock Exchange (TSX). He is not sure what the differences are between a Canadian equity fund and a Canadian dividend fund.
What would you tell him?
- A. Equity funds are more appropriate than dividend funds if Lior requires a steady flow of income.
- B. Dividend funds generate tax-preferred income while income from equity funds is fully taxable.
- C. Dividend funds tend to be less volatile and lower risk than equity funds.
- D. Equity funds hold common shares while dividend funds hold only preferred shares.
Answer: C
NEW QUESTION # 77
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 andre-balance the portfolio. Which of the following statements about Jehona's permitted activities is CORRECT?
- A. If Jehona wants to execute the trades without Sokol's pre-approval, Sokol must first appoint Jehona as his Power of Attorney.
- B. If Sokol has siqned a Limited Authorization Form, Jehona can process the trades in the account without Sokol's pre-approval.
- C. If Jehona wants to execute trades for Sokol's account, Sokol must provide his specific authorization before the trades are entered.
- D. If Sokol has qiven Jehona discretionary tradinq authority, Jehona can process trades in the account without Sokol's pre-approval.
Answer: C
NEW QUESTION # 78
Pacari is a Dealing Representative with Cavalry Investments, a mutual fund dealer. Pacari's client, Darsha, is a long-time customer and an elderly widow. Darsha depended on her husband, for financial decisions before he passed. Pacari has also noticed that Darsha's capacity seems to be declining over the years. Luckily, with Pacari's help, Darsha has been managing her finances well. However, Darsha's daughter has been getting involved recently and has even tried to enter trades without Darsha's authorization. Pacari is particularly concerned about the last transaction for Darsha's account: a very large redemption. Pacari fears that Darsha has become a victim of financial exploitation and he raises his concerns with his dealer Cavalry. Which of the following statements about how Cavalry may proceed is CORRECT?
- A. Cavalry can place a temporary hold on Darsha's account to temporarily disallow the redemption.
- B. Cavalry can place a permanent hold on Darsha's account and disallow all future transactions.
- C. Cavalry must place a temporary hold on Darsha's account to disallow all transactions for the account.
- D. Cavalry must proceed with the redemption because temporary and permanent holds are not permitted.
Answer: A
NEW QUESTION # 79
Bernadette has a high-paying job and is in the top tax bracket. She recently received a payment of $5 million upon the settlement of her uncle's estate. Bernadette would like to invest her inheritance in financial products that would not only grow her money but is also income tax friendly.
Which of the following would provide the most favourable tax treatment?
- A. Capital gains from a large Canadian corporation.
- B. Dividends received from a large foreign corporation.
- C. Eligible dividends from a publicly-listed Canadian corporation
- D. Coupon payments from Government of Canada bonds.
Answer: C
NEW QUESTION # 80
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