Mutual Funds Exam

Questions

 

Chapter 6: Pensions, Registered Accounts and Other Investments

1. In 2011, an employed person who made $1,800 in contributions to his money purchase R PP that year would have a 2012 RRS P contribution limit of ?

a)            (the lesser of 20% of 2011 earned income and $22,450) – $1,800.

b)            (the lesser of 20% of 2011 earned income and $22,970) + $1,800.

c)            (the lesser of 18% of 2011 earned income and $22,450) + $1,800.

d)            (the lesser of 18% of 2011 earned income and $22,970) – $1,800

 

Chapter 3: Mutual Funds

2. Dollar cost averaging can be described as ?

a)            investing amounts equal to the change in the CPI.

b)            investing in a stock at the average of its high and low prices.

c)            investing a fixed sum at regular intervals.

d)            investing whenever the market drops.

 

Answers

 

1. a) True

2. c) investing a fixed sum at regular intervals

Mutual Funds (CIFC, IFC) Exam Questions

Questions

Chapter 3: Mutual Funds

1. A little less than three years ago Patricia bought $2,000 worth of Maple Leaf Resource Fund. T he fund has since performed poorly. S he feels she has been patient enough and wants to redeem all of her units. S he purchased the fund on a deferred sales charge basis. The DS C schedule starts with a 5% commission if the funds are redeemed in the first year which is reduced by 1% each year thereafter. If redeemed after the 5th year the commission is 0% . T he DS C fee is based upon the original NAV PS at the time of purchase. When Patricia bought the Maple  Leaf Resource Fund, the NAVPS was $10 per share and is currently priced at $6.75 per share. How much will she receive?

a)            $1,290.00

b)            $1,309.50

c)            $1,350.00

d)            $1,404.00

Chapter 6: Pensions, Registered Accounts and Other Investments

2. In 2012, John earned $45,000 as a computer technician. He received rental income of $7,000, rental expenses were $2,000. H e also received $6,000 in dividends from his Bell Canada preferred shares. John is a member of the companies defined contribution pension plan and contributes 5% of his salary which is matched by his employer? What is his eligible RRSP contribution room for 2013, assuming no carry-forward room.

 

a)            $4,860

b)            $4,500

c)            $5,580

d)            $9,000

Answers

1. a) `$1,290.00

Redemption amount = NAVPS – back-end sales charge

= $6.75 – (original NAVPS × sales charge %)

= $6.75 – ($10 × 0.03)

= $6.75 – $0.30

= $6.45 × 200 units*

= $1,290

* she originally purchased 200 units ($2000 ÷ 10)

2. b) `$4,500

$45,000 Year 2013 salary

+ 5,000 Net rental income [ $7,000 – $2,000 ]

= $50,000 Earned income for 2012 RRSP purposes × 18% = $9,000

John can contribute $9,000 or $22,970 whichever is less minus the pension adjustment (PA).

Pension adjustment (PA) is contribution by employer + employee to the plan in the previous year (2012)

$45,000 × (5% + 5%) = $4,500 PA

$9,000 – $4,500 = $4,500 RRSP room for the year 2012

For more Mutual Funds questions check out our Mutual Funds Quiz Book.

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Mutual Funds Questions (IFIC, CIFC)

Questions

 

Chapter 1 – Professional Conduct and Regulations

1. On what document is an investment advisor legally required to have a client’s investment objectives properly stated as a percentage allocation by asset class?

a) KYC

b) NCAF

c) Investment policy statement

d) Financial plan

 

Chapter 2 – Economics and Financial Markets

2. The current market price for a 91 day t-bill with 25 days to maturity is 99.4. I f you bought this T -bill, what would be your yield to maturity?

a) 8.81%

b) 8.44%

c) 9.02%

d) 8.65%

 

Answers

 

1. b) NCAF

2. a) 8.81%

Treasury Bill Yield

 

 

For more Mutual Funds questions check out our Mutual Funds Quiz Book.

Keep up to date on our courses and products by liking us on Facebook and following our Twitter Feed.

 

Mutual Funds Exam Prep Questions

Mutual Funds Exam Questions (IFC, CIFC, IFIC)

Our Mutual Funds seminar ended yesterday, but we have a couple more questions for those who want extra practice. Our next MF seminar runs April 6-7. Until then, happy studying and good luck on your exams!

 

Chapter 3: Mutual Funds

1. The AGF Japanese F und is an example of what type of fund?

a) Equity

b) Speculative

c) Global

d) Specialty

 

Chapter 6: Pensions, Registered Accounts and Other Investments

2. When a self directed RRS P’s book value is $100,000 in 2011, an investor uses cash in the fund and purchases $18,000 worth of an equity fund investing entirely in foreign securities. The fund eventually rises in value and now comprises 30% of the market value of the self directed RRS P. Which comment(s) is(are) correct?

I. The RRSP originally exceeded foreign content rules when the mutual fund comprised 18% of the RRSP value.

II. The RRSP eventually exceeded foreign content rules when the mutual fund represented 30% of the RRSP value.

III. There is no RRSP foreign content limit.

IV. The RRSP exceeded foreign content rules on the original purchase of the mutual fund and after the mutual fund increased in value.

 

a) I, IV

b) I, II

c) III

d) II

 

 

Answers

 

 

1. d) Specialty

 

2. c) III

Mutual Funds Exam Prep Questions

Today is the first day of our February Mutual Funds Seminar. I will post questions today and Monday. These are free questions for people preparing to take their Mutual Funds Exam.

There are different exams for licensing in Mutual Funds, but they cover a lot of the same material. These questions are representative of what you might see on the IFC/CIFC/IFIC Exams.

Chapter 1 – Professional Conduct and Regulations

1. National Instrument 81-105 deals with ?

a) mutual fund prospectus offerings.

b) mutual fund investment restrictions.

c) mutual fund operations.

d) mutual fund sales compensation.

 

Chapter 3: Mutual Funds

2. Which of the following ranks mutual funds in terms of the lowest to the highest risk?

a) Dividend fund, mortgage fund, growth fund, specialty fund

b) Mortgage fund, dividend fund, specialty fund, growth fund

c) Mortgage fund, dividend fund, growth fund, specialty fund

d) Dividend fund, mortgage fund, common stock fund, specialty fund

Answers

 

1. d) mutual fund sales compensation

 

2. c) Mortgage fund, dividend fund, growth fund, specialty fund