Get IFC Braindumps & IFC Real Exam Questions [Q89-Q107]

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Get IFC Braindumps & IFC Real Exam Questions

CISI IFC Actual Questions and Braindumps

CISI IFC Exam Syllabus Topics:

Topic	Details
Topic 1	Evaluating and Selecting Mutual Funds: This domain covers the systematic process of choosing appropriate mutual funds based on client needs, including selection criteria, cost considerations, performance history, and ongoing portfolio monitoring and rebalancing.
Topic 2	Analysis of Mutual Funds: This domain addresses evaluation tools and techniques for mutual fund performance, including quantitative measures like returns and risk metrics, and qualitative factors like manager experience and investment style.
Topic 3	Understanding Investment Products and Portfolios: This domain explores various investment products including stocks, bonds, and securities, along with portfolio construction principles, asset allocation strategies, and how different products work together to meet client objectives.
Topic 4	Ethics, Compliance, and Mutual Fund Regulation: This domain addresses ethical standards and regulatory requirements for advisors, covering professional conduct, compliance obligations, conflicts of interest, disclosure requirements, and rules established by regulators and self-regulatory organizations.
Topic 5	The Know Your Client Communication Process: This domain focuses on gathering and documenting client information to ensure suitable recommendations, including understanding financial situations, investment objectives, risk tolerance, and maintaining ongoing communication with clients.
Topic 6	Understanding Alternative Managed Products: This domain introduces investment products beyond traditional mutual funds, including ETFs, segregated funds, and hedge funds, examining their features, structures, benefits, risks, and regulatory treatment.
Topic 7	The Modern Mutual Fund: This domain examines mutual fund structures, types, and operations, covering equity, fixed income, balanced, and specialty funds, their legal structures, pricing mechanisms, purchase processes, and associated fees.

NEW QUESTION 89
Which statement best describes one of the main differences between short and long transactions?

In a long transaction, the investor must pay the broker the cost of repurchasing the shares

Short transactions are more common than long transactions

Short sales must result in a decline in the price of the stock that is sold short

Investors using long transactions anticipate a price increase in the security

NEW QUESTION 90
Which feature would be of prime importance for a money market mutual fund?

Tax efficiency

Inflationary hedge

Liquidity

Yield

NEW QUESTION 91
A mutual fund representative misrepresents the risks associated with a particular mutual fund in order to encourage a conservative client to purchase it. What part of MFDA Rule No. 2 “Business Conduct” did the representative violate?

Deal fairly, honestly, and in good faith with clients

Have such experience and training as is consistent with the standards acceptable to the industry

Not engage in business conduct or practice that is unbecoming or detrimental to the public interest

Observe a high standard of ethics and conduct

NEW QUESTION 92
Martine is working with Ishmail, her financial advisor, to develop her client investor profile. In her overall risk profiling, it was determined that Martine could tolerate an asset allocation of up to 70% of her portfolio.
She currently has a goal of saving for a down payment for her first home, saving for her young children’s education and retirement. Ishmail uses a one-fund strategy for all his client accounts – Martine would be allocated the “growth” fund to all her investments and savings under his management. What should be Martine’s most significant risk in using this strategy at this stage?

Overall cost-benefit of managed products for short-term goal funding

Unsuitable allocation given to multiple goals

Tax implications

Fund management

NEW QUESTION 93
In the OTC market, who enters the bid and ask quotations?

Mutual fund company

Issuing company or government

Retail investors

Dealers

NEW QUESTION 94
Which of the following Dealing Representatives has fulfilled their “Know Your Product” obligation?

Godfried opens an account for his new client, Nadia. When the investments from her previous dealer are transferred in, Godfried sells the investments. Nadia becomes very upset when she is charged
$4,329 in redemption fees that neither she nor Godfried expected.

Otev meets with his client, Saeed. Saeed’s brother invested in the Navigator Eastern Asia Fund and it provided great returns. When Saeed asks Otev if the Navigator Fund or something similar is available through his firm, Otev doesn’t know and doesn’t look it up.

Rehan reviews the features of the Hedge Fund that her client, Georgi, wants to buy. When Rehan explains the product to Georgi, she tells him that the Hedge Fund has a lock-up period and he will not be able to redeem the fund if he needs the money.

Tevy recommends the firm’s in-house Principal Protected Note (PPN) to her client Mei. Since Mei is seeking safety and liquidity, Tevy determines that the PPN is a good product for her because it’s on the firm’s list and the principal is guaranteed.

NEW QUESTION 95
Zara buys a future contract with an underlying value of $100,000 worth of stocks. She is required to deposit
$1,750 of margin. Two weeks later, the underlying value of the stocks is $101,900. What is Zara’s total return?

$3,650 gain

$1,900 gain

$150 gain

$950 gain

NEW QUESTION 96
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 97
What can a capital loss be applied against when computing Canadian income taxes?

Dividend income only

All types of investment income

Capital gains only

All types of income

NEW QUESTION 98
Kendrick is a newly registered Dealing Representative for Oak Solid Financial. He has been assigned the task of contacting existing clients where there has been no record of consultation within the last 12 months. The first person he sees on his list is a client named Chandra Ruffino. He double-checks if her phone number is on the Do Not Call List (DNCL) registry. Which of the following statements apply?

If Chandra is on the DNCL registry, Kendrick is still eligible to contact the client of Oak Solid Financial.

If Chandra has been on the DNCL registry for 18 months, then Kendrick is not allowed to contact her.

If Chandra is on the DNCL, then Kendrick can only contact her if she is specifically his client.

If Chandra had closed her account within the last 12 months and registered herself on the DNCL, then Kendrick cannot call her.

NEW QUESTION 99
When can a mutual fund sales representative disclose confidential client information without informing the client?

When disclosures are documented

When legally required by the government or by law

When referring the client to a specialist or expert for investment advice

When requested by the Canadian Investment Regulatory Organization

NEW QUESTION 100
Barend is a Dealing Representative with Planvest Group Inc., a mutual fund dealer and member of the Mutual Fund Dealers Association of Canada (MFDA). Which of the following CORRECTLY describes Barend’s obligation for conflicts of interest?

Barend must avoid material conflicts of interest that cannot be addressed in the best interest of the client.

Barend must identify material conflicts of interest and promptly report the conflicts of interest to clients.

Barend must identify material conflicts of interest and implement controls on behalf of the firm.

Barend must disclose material conflicts of interest that cannot be addressed in the best interest of the client.

NEW QUESTION 101
In which of the following situations would the client mobility exemption apply?

Olaf is a registered dealing representative in Sunnyside, Prince Edward Island. His client Jules is moving to Moncton, New Brunswick. Olaf’s mutual fund dealer is not currently registered in New Brunswick but is in the process of applying there.

Sigrid’s brother-in-law has agreed to be her client. She is a registered dealing representative in Ottawa, Ontario and he lives in Hull, Quebec. Both Sigrid and her mutual fund dealer are currently registered in Quebec.

Although her mutual fund dealer is registered in all provinces and territories, Lori is only registered as a dealing representative in Saskatchewan. Last year, three of Lori’s clients moved to Alberta and now two more are moving to that province. Lori wants to continue servicing these clients.

Karl is a registered dealing representative in Dauphin, Manitoba. 30 of his clients who work for the same company are being relocated to British Columbia. He wants to retain these clients. His mutual fund dealer is registered in British Columbia, but Karl is not.

NEW QUESTION 102
Every February, Reginald, a Dealing Representative, feels pressured by his Manager to generate new registered retirement savings plans (RRSP) and contributions to assist the branch in meeting broader business targets. Reginald is nearing the end of February, and he has a meeting with a new client, Orel. Orel wants to open a tax-free savings account (TFSA) to develop emergency savings because he does not want to worry about his withdrawals being taxed. Reginald suggests that if Orel were to contribute to an RRSP first, then the resulting tax savings could be used to fund a new emergency account.
In relation to account suitability, what can be said about Reginald’s advice?

Recommending an investment solution that addresses two needs is putting Reginald’s client’s interest first

Based on Orel’s stated need, recommending an RRSP contribution is unsuitable.

Reginald is putting the client’s interest first by informing Orel why he should change his purpose for investing.

By convincing Orel to contribute an RRSP, instead of a TFSA, Reginald has put his client’s interest first.

NEW QUESTION 103
Dale will be using his mutual fund portfolio to supplement his income from other sources. He is comfortable with variable payouts and fluctuating markets. What is the best solution for Dale?

Life withdrawal

Annuity plan

Fixed-period plan

Ratio withdrawal

NEW QUESTION 104
Sean purchases 500 units of Penn Canadian Equity Fund when the net asset value per unit (NAVPU) is
$16.70. On December 15, the mutual fund’s NAVPU is $21. On December 16, the mutual fund declares a distribution of $1.25 per unit. Sean’s distribution is immediately reinvested and he purchases additional units of the mutual fund.
Which of the following statements about the effect of the distribution is correct?

After the distribution. Sean will have J&625 in cash and JB8.350 worth of the Penn Canadian Equity Fund.

The total value of Sean’s mutual fund holdings after the distribution and reinvestment is §9,875.

The NAVPU of the mutual fund does not change after the distribution since Sean reinvests his distribution and purchases additional units.

Sean’s distribution is reinvested at a NAVPU of $19.75 and he receives approximately 31.65 additional units.

NEW QUESTION 105
Which of the following money market securities have the highest degree of risk for the investor?

Bankers’ Acceptances

Commercial Paper

Treasury Bills

Municipal Short-Term Paper

Commercial paper is a type of money market security that is issued by corporations and financial institutions to raise short-term funds. Commercial paper has a maturity of less than one year, typically between 30 and 90 days. Commercial paper is unsecured, meaning that it is not backed by any collateral or guarantee. Therefore, commercial paper has the highest degree of risk for the investor among the four types of money market securities listed, as it depends on the creditworthiness and liquidity of the issuer. If the issuer defaults or faces financial difficulties, the investor may lose part or all of their principal. Commercial paper also has a higher interest rate than other money market securities to compensate for the higher risk.
The other types of money market securities are:
* Bankers’ acceptances: These are negotiable instruments that are issued by a bank on behalf of a client who needs to finance international trade transactions. Bankers’ acceptances have a maturity of less than one year, usually between 30 and 180 days. Bankers’ acceptances are secured by the bank’s guarantee and the underlying goods or services that are being traded. Therefore, bankers’ acceptances have a lower degree of risk for the investor than commercial paper, as they are backed by the bank’s creditworthiness and the value of the trade transaction.
* Treasury bills: These are short-term debt obligations that are issued by the federal government to finance its operations and programs. Treasury bills have a maturity of less than one year, usually between 3 and 12 months. Treasury bills are considered risk-free investments, as they are backed by the full faith and credit of the government. Therefore, treasury bills have the lowest degree of risk for the investor among the four types of money market securities listed, as they have virtually no default risk or liquidity risk. Treasury bills also have the lowest interest rate among the four types of money market securities, as they reflect the risk-free rate of return.
* Municipal short-term paper: These are short-term debt instruments that are issued by municipalities or other local governments to finance their capital projects or operating expenses. Municipal short-term paper has a maturity of less than one year, usually between 30 and 270 days. Municipal short-term paper is secured by the taxing power and revenue sources of the issuing municipality or government.
Therefore, municipal short-term paper has a lower degree of risk for the investor than commercial paper, as it is backed by the ability and willingness of the issuer to levy taxes and collect revenues.
Canadian Investment Funds Course (CIFC) Study Guide, Chapter 5: Fixed-Income Securities, Section 5.1:
Money Market Securities, page 5-21
Money Market Definition – Investopedia2
Commercial Paper Definition – Investopedia3
Bankers’ Acceptance (BA) Definition – Investopedia4
Treasury Bill (T-Bill) Definition – Investopedia
Municipal Bond Definition – Investopedia

NEW QUESTION 106
As it pertains to fixed-income securities, which yield metric factors in cash flows relative to ongoing bond prices rather than the initial amount invested?

Earnings

Current

Effective

Dividend

NEW QUESTION 107
Your client Gerard is 30 years old and plans to retire at age 65. He has a mutual fund portfolio of $40,000 in which he invests $1,500 monthly. Gerard’s objective is to use these funds to meet the 20% down payment requirement to buy a house for $650,000.
What is Gerard’s investment time horizon not considering market fluctuations?

5 years

15 years

25 years

35 years