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 lame investment losses.

A.  

The client will not be eligible for any coverage.

B.  

The client will be eligible for coverage of $950,000.

C.  

The client will be eligible for coverage of $1,500.000.

D.  

The client will be eligible for coverage of $550,000.

A.  

It is a type of systematic withdrawal program.

B.  

It is buying a set dollar amount of a mutual fund on a regular basis

C.  

It is the strategy of purchasing a set number of units of a mutual fund on a regular basis.

D.  

It is making lump-sum purchases when the market price for a mutual fund is low.

A.  

Arilla's client, Gwen, wants to co-invest with Arilla in units of a real estate limited partnership.

B.  

Davu's client, Ester, wants him to refer her to an accountant to help her with filing her tax return.

C.  

Fred's client, Hildie, wants to buy a life insurance policy and Fred is dually licensed as an Insurance Agent.

D.  

Jamal's client, Laila, wants to buy the Focus Canadian Growth Fund that pays Jamal trailer fees.

A.  

If Jeff qualifies for additional CESG. his CESG lifetime maximum increases to $10,000.

B.  

If Jeff decides not to pursue a post-secondary education, he can keep all the CESG but it then becomes taxable.

C.  

George may open an RESP for Jeff but it will not quality to receive Canada Savings Education Grants (CESGs).

D.  

If Ellen receives the National Child Benefit Supplement (NCBS), Jeff may be eligible for the Canada Learning Bond

A.  

Quintin cannot accept purchase orders from a client until Lupita completes her review of the NCAF.

B.  

Lupita has two business days from the date of opening the new account to approve the NCAF completed by Quintin.

C.  

Quintin and Lupita are both following proper procedure regarding new account openings and purchase orders.

D.  

Unless Quintin is presently under probation, he does not need Lupita's approval regarding the NCAF.

A.  

David got his 500 units at the same price as the lump sum price he would have paid.

B.  

David got his 500 units at a lower price than the lump sum price he would have paid.

C.  

David realizes that Dollar cost averaging is the best strategy for getting lower prices.

D.  

David got his 500 units at a higher price than the lump sum price he would have paid

A.  

To qualify- as a first-time home buyer you or your spouse must never have previously owned a home

B.  

Once you are required to repay the amounts back to your RRSP. any missed or incomplete payments are subject to tax.

C.  

A qualifying home must be purchased by December 31 of the year of withdrawal.

D.  

If you have a spouse or common-law partner, each of you can withdraw up to JE50.000 from your registered retirement savings plans (RRSPs).

A.  

$37,888

B.  

$36,698

C.  

$42,861

D.  

$35,859

A.  

money market funds, mortgage funds, bond funds

B.  

money market funds. Canadian dividend funds, sector funds

C.  

Canadian dividend funds, global equity index funds, bond funds

D.  

money market funds, global equity funds, bond funds

A.  

Fernando may make contributions to his LIF if he continues working.

B.  

Fernando is free to withdraw any amount from his LIF above the minimum amount.

C.  

Fernando can transfer money from his registered retirement savings plan (RRSP) to a LIF.

D.  

Fernando can transfer money from his locked-in retirement account (LIRA) to a LIF.

A.  

the equity fund

B.  

the bond fund

C.  

either since it makes no difference

D.  

it depends on her marginal tax rate

A.  

A period of economic expansion is followed by a period of economic contraction.

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 at least 3 consecutive months of contraction is called a recession.

A.  

Justin and Yvonne may contribute a combined lifetime maximum of $50,000 for Grace.

B.  

RESPs are attractive to Justin and Yvonne because they are tax-free investment plans.

C.  

There is an annual contribution limit of $2,500 that Justin and Yvonne can contribute to an RESP.

D.  

Contributions made by Justin and Yvonne are eligible for a tax deduction in the year they are contributed.

A.  

bottom-up

B.  

growth at a reasonable price (GARP)

C.  

value investing

D.  

top-down

A.  

typically monthly distributions of interest

B.  

if interest rates fall, the mutual fund's net asset value per unit (NAVPU) will decline

C.  

suitable only for high risk investors

D.  

risk-free where the mortgages are National Housing Act (NHA) insured

A.  

i and ii

B.  

i and iii

C.  

ii and iii

D.  

iii and iv

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.

A.  

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

B.  

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

C.  

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

D.  

She can purchase a registered term or life annuity.

A.  

Client's responsibilities

B.  

Process for complaints

C.  

Investment Objective

D.  

Payee for deposits

A.  

Include investments paying capital gains in the registered plan and foreign pay investments in the non-registered plan.

B.  

Include domestic pay assets in the registered plan and foreign pay assets in the non-registered plan.

C.  

Include interest paying investments in the registered plan and dividend paying investments in the non-registered plan.

D.  

Include dividend paying investments in the registered plan and interest paying investments in the non-registered plan.

A.  

global equity fund

B.  

commodity pool

C.  

labour-sponsored investment fund

D.  

specialty fund

A.  

Capital gains from mutual fund distributions are 100% taxable.

B.  

Capital gains distributions are not a disposition and are therefore not taxable.

C.  

Capital gains from mutual fund trusts are deferred until the investor exits the mutual fund.

D.  

Capital gains distributions from a mutual fund trust are reported annually on a T3.

A.  

balance sheet, income and cash flow statements of the portfolio management company

B.  

statement of net assets, annual information form, management reports of fund performance

C.  

annual proxy voting record, audited financial statements, and proof of registration

D.  

new account information form, quarterly financial statements, and security certification

A.  

Capital gains from mutual fund trusts are deferred until the investor exits the mutual fund.

B.  

Capital gains distributions from a mutual fund trust are reported annually on a T3.

C.  

Capital gains distributions are not a disposition and are therefore not taxable.

D.  

Capital gains from mutual fund distributions are 100% taxable.

A.  

What the mutual fund is currently investing in.

B.  

How to calculate the taxes owed from investment income.

C.  

The portfolio management strategy that is used.

D.  

The remuneration paid to the Independent Review Committee.

A.  

Whether the couple saves on income tax will be dependent on Minu's marginal tax rate.

B.  

Minu will be exposed to a pension adjustment (PA) if she receives income from his pension.

C.  

This is a form of tax evasion and is therefore considered illegal based on income tax legislation.

D.  

Regardless of how much income each person reports, the total amount of income taxes will not change.

A.  

Regular secured bonds offer a higher level of income than debentures.

B.  

Bonds are secured by the specific assets of a company whereas debentures are not secured by real assets or collateral.

C.  

Debentures have higher priority than bondholders for the company's assets in the event that the company goes bankrupt.

D.  

Debentures are considered high risk because they are not backed by the reputation or credit worthiness of the issuer.

A.  

Potential

B.  

Disclosure

C.  

Avoidance

D.  

Control

A.  

bond fund

B.  

Canadian equity index fund

C.  

asset allocation fund

D.  

target date fund

A.  

Speculating

B.  

Modern portfolio theory

C.  

Passively managing

D.  

Hedging

A.  

$17,472

B.  

$18,754

C.  

$24,000

D.  

$25,480

A.  

The TCP is an alternative to a Power of Attorney (PQA) and has the authority to make changes to Isaac's account and direct trading.

B.  

The TCP is an alternative authority on Isaac's account that has the power to place a temporary hold on Isaac's account to disallow trading.

C.  

The TCP is the person whom Gershon can speak to if he becomes concerned about Isaac's mental capacity to make financial decisions.

D.  

The TCP is the person who is designated with authority to direct financial dealings for Isaac's account and make financial decisions.

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

A.  

The return of dividend funds relies only on interest rates; whereas with bond funds, the return also depends on the general direction of stock markets.

B.  

When interest rates rise, the net asset value per unit (NAVPU) of bond funds decreases; whereas with dividend funds it rises.

C.  

Bond funds receive fixed interest payments from most of their investments.

D.  

Bond fund distributions receive more favorable tax treatment than that of dividend funds.

A.  

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

B.  

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

C.  

It will reduce Suiay's contribution room by

D.  

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

A.  

Gifts and benefits may be provided to a client if your employer is aware of the benefits and has given approval.

B.  

Activities that do not relate specifically to your employer need not be reported.

C.  

Only actual conflicts must be reported to your employer. Potential conflicts need not be reported because they have not happened yet.

D.  

Borrowing money from a client will always be acceptable provided there is a written contract detailing the nature of the agreement.

A.  

Nelson may retain a copy of the RDI in the client file with detailed notes to confirm that he provided and explained the RDI to the client.

B.  

Nelson may deliver the RDI to clients who request it and keep detailed notes of the clients who were provided with the RDI.

C.  

Nelson can formalize his relationship under the RDI using a Letter of Engagement that specifies duties, responsibilities, and level of service.

D.  

Nelson can record detailed notes which confirm that he provided and explained the Fund Facts to the client within 2 days of the RDI.

A.  

Fund of funds have higher fees than traditional mutual funds since there are two sets of management fees.

B.  

Fund of funds have more asset class options available and lower fees than traditional mutual funds.

C.  

Since fund of funds invest primarily outside Canada, they will have higher fees than traditional mutual funds.

D.  

Fund of funds have more fee structure options available and lower fees than traditional mutual funds.

A.  

Redwood can flow the foreign dividends to unitholders, who can then take advantage of the dividend gross-up and tax credit mechanism.

B.  

Unitholders will receive $12.25 per unit of net capital gains from Redwood, of which only 50% is subject to tax.

C.  

Redwood can distribute the $2.00 per unit of capital losses to unitholders, who can then use them to offset their capital gains.

D.  

Since Redwood pays the tax on foreign income, it does not distribute dividend or capital gains income from foreign sources to unitholders.

A.  

increasing taxes

B.  

increasing transfer payments to particular provinces

C.  

increasing the cost of borrowing

D.  

increasing spending on road construction and maintenance

A.  

If Grant is not compensated for the Treasurer position, his firm's approval is not required.

B.  

Grant must obtain the firm's approval before he starts the Treasurer position.

C.  

Since Grant holds the Treasurer position on a voluntary basis, it is not an outside activity.

D.  

Grant must disclose the Treasurer position to his firm once he has accepted the position.

A.  

The number of units is not fixed, and varies with investor demand and redemption orders.

B.  

Investors holding open-end funds can buy and sell their mutual funds anytime the stock market is open.

C.  

Units are bought and sold amongst the unitholders.

D.  

Initial shares in the mutual fund are allotted through an initial public offering (IPO)

A.  

Dominion International Growth Fund - this international equity fund invests in small and medium sized companies in countries all around the world.

B.  

Polar Global Blue Chip Equity Fund - this global equity fund invests in large, established companies in mostly stable and mature foreign markets.

C.  

Lennox Energy Fund - this sector fund invests primarily in Canadian oil and gas companies that sell both to domestic and foreign markets.

D.  

Auric Precious Metals Fund - this sector fund invests in Canadian companies that participate in the precious metals sector such as owning mines in foreign countries.

A.  

$1,198

B.  

$1,216

C.  

$1,256

D.  

$1,332

A.  

inflation risk

B.  

interest rate risk

C.  

market risk

D.  

liquidity risk

A.  

While ETFs are prone to tracking errors, index funds are perfectly aligned with their underlying index.

B.  

ETFs can be purchased continuously throughout the trading day while index funds can only be bought or sold at the end of the day.

C.  

The market price of ETFs always matches the underlying basket of securities while there can be a discrepancy in pricing index funds.

D.  

ETFs do not have management fees since they are exchange traded while index funds do incur such fees.

A.  

LSIFs are appropriate for investors with a short-term time horizon.

B.  

All provinces offer some sort of additional tax credit for investors.

C.  

LSIFs are suitable for investors with a low risk tolerance.

D.  

Investors will forfeit their tax credits if they redeem their LSIF investment before 8 years have elapsed.

A.  

Pierre has the right to buy the stock if he exercises the option.

B.  

Pierre is obligated to sell the stock if the option is exercised.

C.  

Pierre has the right to sell the stock if he exercises the option.

D.  

Pierre is obligated to buy the stock if the option is exercised.

A.  

Philip and Helen's contributions are refundable to them.

B.  

There is no annual or lifetime maximum limit on contributions.

C.  

Alex must quality for the disability tax credit.

D.  

Philip and Helen's contributions are tax-deductible.

A.  

Through the years, the asset allocation shifts from equities towards fixed income as the maturity date approaches.

B.  

Through the years, the asset allocation shifts from fixed income towards equities as the maturity date approaches.

C.  

The mutual fund is constantly rebalanced to maintain an even split between equities and fixed income through the life of the mutual fund.

D.  

In exchange for a lump-sum purchase the unitholder receives guaranteed monthly payments for life.