Investment Funds in Canada (IFIC) Practice Exam

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• How is pension calculated in a career average plan?
• What does the sacrifice ratio indicate in economic terms?
• What term describes a long-term asset mix that a manager is committed to maintaining?
• Which investment option typically pays a higher rate than Canada Savings Bonds?
• The calculation for dividend yield is defined as:
• What happens if RESP beneficiaries do not attend qualified post-secondary institutions?
• What is the maximum contribution amount in a Registered Education Savings Plan (RESP) per beneficiary?
• What describes a direct investment?
• In Canada, which plan stipulates benefits are pre-determined and based on a specific formula?
• What does a fund wrap provide to investors?
• Which of the following best describes current assets?
• What economic theory states that low unemployment can lead to high inflation?
• What is the primary focus of a defined contribution plan?
• Regarding bond pricing, which type of coupon bond is more volatile in price?
• What is a drawdown in economic context?
• Which bond pricing characteristic indicates a bond's price change as related to its coupon rate?
• What type of insurance contract combines an investment that produces returns and provides death benefits?
• What preferred shares might allow shareholders to receive additional dividends based on the performance of common stockholders?
• An order to purchase a stock if it drops to a certain price is called what?
• What type of preferred shares pays both a fixed dividend and an additional dividend based on common stockholder performance?
• What is the role of the Independent Review Committee in mutual funds?
• What type of assets are defined as those that will be held or used for more than one year?
• What is defined as cumulative declines in equity?
• What condition must be met for clients in a joint account to effectively manage investments?
• Which of the following refers to an investment strategy where the manager aims to earn excess returns?
• What does the current ratio measure in financial analysis?
• Who are retail investors?
• What does it mean when a bond is sold at a discount to its par value?
• What are retained earnings?
• What is a primary characteristic of a bond fund?
• What is a Life Annuity?
• Which risk pertains to sudden changes in market direction affecting interest rates and equities?
• In what type of investment are securities sold directly to institutional buyers?
• What is a laddered GIC?
• What describes the function of pooled RESPs?
• In what situation are withdrawals from a Spousal RRSP taxable to the contributor?
• What term refers to the difference between possible realized returns and expected returns?
• What is referred to when a portfolio's movement exceeds the expected beta?
• What is the primary goal when buying futures contracts?
• Which rate must a hedge fund earn before the manager can take an incentive fee?
• In a final average plan, how is the pension typically calculated?
• If a contributor starts to withdraw income from an RESP, what is the deadline for the plan's termination?
• What is the primary purpose of an investment fund's prospectus?
• What type of risk is associated with the direction of interest rates, equities, and currencies?
• What is one responsibility of the administrator in pooled RESPs?
• What is a requirement before accessing a Registered Retirement Income Fund (RRIF)?
• What does the Interest Ratio Coverage indicate?
• How is inflation calculated using CPI?
• How is performance measured in terms of NAVPS?
• What describes rapid inter-day price swings in the market?
• What strategy involves actively seeking out undervalued securities?
• What characterizes a Registered Retirement Income Fund (RRIF)?
• What portfolio strategy predominantly uses a buy-and-hold investment style?
• What term describes new profits that activate a fund manager's ability to take an incentive fee?
• Which type of fund requires investors to hold investments for a specific period to qualify for guarantees?
• What constitutes a non-conventional mortgage?
• What is meant by the term 'term' in finance?
• What is a key characteristic of a bond with a high duration?
• What are derivatives in the context of investments?
• What term describes the extent to which an ETF fails to track an index?
• What is the nature of professional engagements in investment and distribution discussions?
• Which financial statement summarizes a company's income and expenses over a specified period, usually one year?
• Inventories are excluded from which financial metric regarding current assets?
• What type of preferred shares accumulate unpaid dividends and ensure they are paid before common shareholders receive dividends?
• What components make up shareholders' equity?
• Which preferred shares can be exchanged for common shares, with the exchange ratio set prior to issuance?
• What does a flat benefit pension plan typically provide?
• What is the maximum term beyond which the CDIC does not cover GICs?
• Unsecured bonds are commonly referred to as what?
• What type of financial product typically has death benefits along with an investment component?
• Which term describes cash and other assets expected to be exchanged for cash or consumed within a year?
• What can happen to the funds in an RESP if the plan is not properly managed?
• What is a managed pool of securities that is traded on a stock exchange and has a fixed number of shares?
• What investment vehicles could be involved in an arbitrage transaction?
• Which concept best describes the benefit of maximizing returns while managing risk in a portfolio?
• Callable preferred shares typically get redeemed when which financial condition occurs?
• Which type of fund has the ability to buy back outstanding shares periodically?
• What is the relationship between longer term bonds and interest rate risk?
• Which of the following metrics indicates the health of a company's financial structure?
• What type of inflation is caused by an excess of demand over output at the existing price level?
• What do appraisal firms collect and report regarding mutual funds?
• What does a peak in the business cycle indicate?
• What are baskets of securities that are constructed like mutual funds but traded like individual stocks on an exchange?
• What are instalment debentures used for?
• Which characteristic is typically associated with capital?
• Which characteristic does not describe capital?
• Which type of preferred share is designed to be redeemed upon the discretion of the issuing corporation?
• In investment terminology, what is meant by "indirect investment"?
• Who can provide investment instructions in a tenants in common arrangement?
• What term is used to represent the consumed amount of fixed assets over time?
• What typically happens each year during the term of an instalment debenture?
• What type of risk involves aspects of trading such as dealing and implementing arbitrage structures?
• What is it called when clients request to receive the same amount of money through the redemption of units of a mutual fund?
• Which type of funds invest in other funds instead of buying securities directly?
• What is a characteristic feature of a perpetual preferred share relevant to dividends?
• Which account type involves multiple owners having proportional control over the account?
• Which of the following is a stipulation for RRSP contributions?
• What does NAVPS stand for?
• What feature distinguishes Canada Savings Bonds from Canada Premium Bonds?
• What is an escalating-rate GIC?
• Which of the following best describes an investment in mutual funds?
• What does a margin account allow investors to do?
• What term describes a client's request to receive a fixed percentage of the fund value consistently?
• Which type of fund would generally have the least volatility?
• Which of the following best describes the concept of return on equity (ROE)?
• What type of funds are structured and sold as mutual funds but manage futures?
• Which term refers to actively trading derivative products alongside physical commodities, financial assets, and currencies?
• What is a common feature of institutional investors?
• In financial terms, what does cash flow typically represent?
• What is an alternative structure for mutual funds?
• What is the term for a withdrawal plan where clients receive money for a designated period until the mutual fund investment is fully paid out?
• What is the minimum guaranteed return a client might expect from a Guaranteed Minimum Withdrawal Plan?
• What term refers to the proportion of total fund assets that are traded in a year?
• Which of the following is a determinant of bond quality?
• What type of pension plan provides benefits based on a formula involving years of service and income levels?
• What is a convertible bond?
• Which type of debt is typically short-term and unsecured, issued by large corporations?
• What does the term 'duration of bonds' indicate?
• Which of these elements is NOT included in shareholders' equity?
• What formula calculates the purchase price of a fund?
• Which type of bond can only be purchased by residents of the province and can be redeemed every six months?
• What feature allows a corporation to redeem bonds at any time, often requiring a premium?
• Which of the following statements is true about Canada Education Savings Grants?
• What commonly influences interest rates linked to GICs?
• Which of the following factors contributes to GDP growth?
• Which inflation type is characterized by production costs causing an increase in prices?
• What type of bond would require a call premium when the issuer decides to redeem early?
• Which GIC offers interest rates linked to changes in other rates, such as the prime rate?
• What does the term 'depreciation' specifically refer to in financial accounting?
• Which term refers to a bond's lack of backing by assets?
• Which financial instrument matures at face value but is sold at a discount?
• What does the return percentage formula represent?
• What mechanism is used to calculate payouts for principle protected notes?
• What type of transaction involves the simultaneous buying and selling of securities across different exchanges?
• Which term refers to buying or selling a stock at a specific price?
• What are the four phases of the business cycle?
• What do corporations issue to raise capital for investment projects, which generally has a stated dividend amount?
• What does EPS stand for in financial reporting?
• What term describes the record of exchanges of goods between Canada and foreign entities?
• What does technical analysis primarily focus on in the study of stock market behavior?
• What must a plan holder do if they die before de-registering an RRSP?
• In a defined contribution plan, how are the benefits at retirement determined?
• What is the process of transferring funds back to accounts at chartered banks from BOC known as?
• Which type of fund has a maturity date and typically involves a glide path?
• What does the P/E ratio measure in equity assessments?
• What is the maximum amount that can be transferred into a Registered Retirement Savings Plan (RRSP) from RESP contributions?
• What is the coupon rate's main function in finance?
• How is the annual yield on a perpetual preferred share calculated?
• Why may a fund of funds be appealing to investors?
• What term is commonly used to describe limits placed on trading during price extremes?
• What type of management style is often used in actively managed funds?
• Which measure indicates the degree to which individual equity securities or a portfolio of securities move in relation to the overall market?
• What does the output gap represent?
• What characterizes demand-pull inflation?
• In a perfectly negatively correlated portfolio, how do the securities behave?
• What type of analysis assesses the economic outlook and industry performance prospects?
• What must clients typically have in common to open a joint account?
• Which of the following describes Treasury Bills?
• Which type of financial instrument is typically issued with a maturity or redemption date of five years or longer?
• Which buying mechanism allows investors to leverage their investments through borrowed funds?
• Which financial statement details both the inflows and outflows of cash within a company?
• Which of the following is the common structure for hedge funds?
• What does the term "secondary market" refer to?
• Which type of GIC is insured by CDIC and has some exposure to equity markets?
• What tax benefit is provided when transferring a Spousal RRSP into the spouse’s own RRSP?
• What is the primary function of a mutual fund custodian?
• What condition is true when the arithmetic mean and geometric mean are the same?
• In investment management, what does KYC stand for?
• What is the process called that allows firms to file one registration statement for multiple issues of the same security?
• Which withdrawal plan involves a request for a fixed dollar amount regardless of the fund’s performance?
• What is a key feature of principle protected notes?
• What type of fund allows a client to own units in several mutual funds with a specified allocation?
• What does the capital/financial account record?
• Which of the following characteristics defines a secured bond?
• What is a characteristic of a flat benefit plan?
• What characterizes open mortgages?
• What is amortization?
• Which withdrawal plan is designed to match the expected remaining lifetime of the investor?
• Which of the following methods is used to assess investment performance?
• What stage follows an economic expansion in the business cycle?
• Which fund primarily targets investors seeking short-term returns?
• What is the maximum lifetime Canada Education Savings Grant an individual can receive?
• What formula is used to calculate the Current Yield on Bonds?
• What is a common feature of a defined benefit pension plan?
• What is a financial product that gives the plan holder the right to withdraw a fixed percentage of the plan until the principal is depleted?
• What typically happens during the trough phase of the business cycle?
• In a tenants in common arrangement, what is true about the ownership of the account?
• What term describes a network of dealers who trade with each other, often referred to as OTC markets?
• Which of the following is an example of a financial derivative?
• What type of fund consists of multiple mutual funds organized around a specific asset allocation model?
• Which type of investment plan allows clients to withdraw funds over a fixed duration?
• What is the limit on over-contributions to an RRSP?
• What does the risk-level of a portfolio with a perfect negative correlation indicate?
• What type of investors are pension funds classified as?
• What market structure involves buyers entering bids and sellers entering offers for a stock?
• What does a market review typically include?
• What is a prerequisite for all clients in a group plan regarding KYC?
• Which aspect of an annuity offers a predictable income stream during retirement?
• What is a key feature that characterizes joint accounts?
• What is a limit on contributions to a defined contribution plan (DCP)?
• What does it mean when a commodity contract reaches its daily price limit?
• What must each employee complete as part of the Know Your Client (KYC) requirements in a group plan?
• What is a key difference between a Life Income Fund (LIF) and a Registered Income Fund (RIF)?
• At what point can employees access funds in a locked-in RRSP?
• What is the structure of most mutual funds?
• Which type of preferred shares can be redeemed by the issuing company at any time?
• What are the implications of closed mortgages?
• What type of bond is backed by some form of collateral?
• What type of bonds are considered a promise to pay and are termed debentures?
• What type of payment includes both interest and principal?
• Which term best describes a plan where the withdrawal amount is determined by the investor's lifespan?
• What concept is associated with the potential for risk and reward in trading strategies?
• A fund that requires investment returns to exceed a specified benchmark before fees are taken is known for applying which principle?
• What is the key advantage of a laddered GIC?
• Which plan is intended for clients seeking withdrawals based on their life expectancy?
• Which of the following does not fall under CDIC coverage?
• What is the goal of a portfolio manager who practices market timing?
• Which of the following describes a mutual fund's 'net asset value' (NAV)?
• Which ratio measures the profitability of a company relative to its sales?
• Which financial metric is represented by the formula profit/equity?
• What is a primary benefit of contributing to an RESP?
• What is a commercial draft drawn by a borrower called, which matures at its face value?
• Which term is used for an order to sell a stock once its price has reached a certain predetermined level?
• What is the primary purpose of the statement of comprehensive income?
• What financial instrument is characterized by a lump-sum payment up front followed by installments?
• What is the formula to calculate RRSP contribution room for an individual?
• How are Canada Bonds generally characterized in terms of return?
• Which type of fund requires meeting minimum performance standards before managers can receive their incentive fees?
• What type of preferred share does not have a maturity date?
• What is cost-push inflation primarily caused by?
• What is the contribution limit for RRSP for the year?
• What is the main function of pension funds within the investment landscape?
• Who makes investment decisions in self-directed retirement plans?
• What aspect is regularly monitored by appraisal firms in terms of mutual fund performance?
• In a final average pension plan, what is typically used to calculate the pension?
• Which financial document shows a company's financial position at a specific date?
• Which formula is used to calculate dividend yield?