IFIC EXAM QUESTIONS AND ANSWERS
What term describes the range of possible future outcomes on the price of a security? -
answers -risk
Which newspaper article would be likely to result in foreign capital moving out of a
country? - answers -new taxes on foreign direct investment
Which of the following takes place in the secondary market? - answers -resale of
previously issued securities
Which exchange in canada deals exclusively with financial and equity futures and
options? - answers -the montreal exchange.
What term applies to unemployment created by a new technology that eliminates the
need for subway train drivers? - answers -structural
The demand for blue widgets increases sharply due to a newspaper report that using
blue widgets improves recovery from influenza. What can be said about the law of
supply? - answers -price and production both increase
If the cpi was 140.6 last year and 146.9 this year, what was the inflation rate over the
year? - answers -4.48%
Which organization regulates mutual and investment funds? - answers -securities
commissions
What stage in the business cycle typically has increasing wages, rising inflation, rising
interest rates, with slowing sales and decreasing business investments? - answers -
peak.
Based on financial planning pyramid, what security would be appropriate for a very
aggressive investor? - answers -over the counter (otc) securities
What bias results in investors valuing an asset that they own over an asset that another
individual owns? - answers -endowment.
What response would a loss-averse investor be most likely to choose in selecting a
preferred investment return scenario? - answers -a 25% chance of gaining $2,000, and
a 75% chance of losing nothing.
, What bias would influence an investors decision to continue to hold unprofitable
investment despite little likelihood of an improvement in the investments value? -
answers -loss aversion
Joanne's earned income last year was $45,000 and her pension adjustment was
$2,500, she has $2,000 in carry forwards registered retirement savings plan room for
the current taxation year. What is joanne's maximum tax-deductible rrsp contribution
amount for the current year? - answers -$7,600
Which form of investment income is taxed at an investor's marginal tax rate? - answers
-forgein dividend income
What type of benefit plan has a final benefit that is dependent on the investment returns
within the plan? - answers -defined contribution plan
What is the step in the financial planning process that includes a discussions of a clients
household budget? - answers -indeity financial situation and constraints
What is the characteristic of stage 2- family commitment investor that most affects the
ability to save for the long term? - answers -lack of liquidity
Ian is 25, employed, and has no dependents. He has no current financial or family
obligations. He has asked for your recommendation for investing a $50,000 inheritance.
What asset allocation would be suitable for him? - answers -10% in bond fund, 80% in
equity fund, 10% in money market funds
Your client contacts you, requesting the tyour purchase a mutual fund based on a "top
tip" from a friends who has been a successful investor. What bias is your client being
affected by? - answers -overconfidence
Jeff is a new, 50 years old. Low 6 figures. - answers -the advisor should moderate and
adapt to jeff's emotional biases.
What portion of the withdrawal from a registered education savings plan is tax-free? -
answers -original capital contributed
An employer wants to offer his employees a pension plan. The goal is to provide a
simple-to-understand plan that will reward all participants equally, regardless of their
income level. - answers -flat benefit plan
You client, a high-income earner in a high marginal tax bracket, is seeking to minimize
the amount of tax he pays on investment income while continuing to invest in mutual
funds. Which mutual fund would best meet his investment objective? - answers -
canadian equity fund
What term describes the range of possible future outcomes on the price of a security? -
answers -risk
Which newspaper article would be likely to result in foreign capital moving out of a
country? - answers -new taxes on foreign direct investment
Which of the following takes place in the secondary market? - answers -resale of
previously issued securities
Which exchange in canada deals exclusively with financial and equity futures and
options? - answers -the montreal exchange.
What term applies to unemployment created by a new technology that eliminates the
need for subway train drivers? - answers -structural
The demand for blue widgets increases sharply due to a newspaper report that using
blue widgets improves recovery from influenza. What can be said about the law of
supply? - answers -price and production both increase
If the cpi was 140.6 last year and 146.9 this year, what was the inflation rate over the
year? - answers -4.48%
Which organization regulates mutual and investment funds? - answers -securities
commissions
What stage in the business cycle typically has increasing wages, rising inflation, rising
interest rates, with slowing sales and decreasing business investments? - answers -
peak.
Based on financial planning pyramid, what security would be appropriate for a very
aggressive investor? - answers -over the counter (otc) securities
What bias results in investors valuing an asset that they own over an asset that another
individual owns? - answers -endowment.
What response would a loss-averse investor be most likely to choose in selecting a
preferred investment return scenario? - answers -a 25% chance of gaining $2,000, and
a 75% chance of losing nothing.
, What bias would influence an investors decision to continue to hold unprofitable
investment despite little likelihood of an improvement in the investments value? -
answers -loss aversion
Joanne's earned income last year was $45,000 and her pension adjustment was
$2,500, she has $2,000 in carry forwards registered retirement savings plan room for
the current taxation year. What is joanne's maximum tax-deductible rrsp contribution
amount for the current year? - answers -$7,600
Which form of investment income is taxed at an investor's marginal tax rate? - answers
-forgein dividend income
What type of benefit plan has a final benefit that is dependent on the investment returns
within the plan? - answers -defined contribution plan
What is the step in the financial planning process that includes a discussions of a clients
household budget? - answers -indeity financial situation and constraints
What is the characteristic of stage 2- family commitment investor that most affects the
ability to save for the long term? - answers -lack of liquidity
Ian is 25, employed, and has no dependents. He has no current financial or family
obligations. He has asked for your recommendation for investing a $50,000 inheritance.
What asset allocation would be suitable for him? - answers -10% in bond fund, 80% in
equity fund, 10% in money market funds
Your client contacts you, requesting the tyour purchase a mutual fund based on a "top
tip" from a friends who has been a successful investor. What bias is your client being
affected by? - answers -overconfidence
Jeff is a new, 50 years old. Low 6 figures. - answers -the advisor should moderate and
adapt to jeff's emotional biases.
What portion of the withdrawal from a registered education savings plan is tax-free? -
answers -original capital contributed
An employer wants to offer his employees a pension plan. The goal is to provide a
simple-to-understand plan that will reward all participants equally, regardless of their
income level. - answers -flat benefit plan
You client, a high-income earner in a high marginal tax bracket, is seeking to minimize
the amount of tax he pays on investment income while continuing to invest in mutual
funds. Which mutual fund would best meet his investment objective? - answers -
canadian equity fund
