SEGREGATED FUNDS AND ANNUITIES EXAM VERSION 1 -
COMPLETE QUESTIONS AND DETAILED SOLUTIONS LATEST
UPDATE THIS YEAR JUST RELEASED
Question 1: There is no ______in the application for a segregated
fund contract. This means that the health of the contracts policy
owner or annuitant is not accessed because guarantees are based
on the strength of the investment and not the persons life.
Answer:
Medical underwriting
Question 2: Funds are also subject to specific risks, based on their
type. For instance, a bond fund is highly susceptible to interest rate
risk but has little market risk. An ________fund, on the other hand,
has very high market risk and low interest rate risk.
Answer:
Equity
Question 3: Dividends received from ______are taxed at a lower
rate than interest income as a result of the dividend tax credit. This
increases investor appeal.
Answer:
Canadian corporations
Question 4: Balanced funds suit an investor who wants some
exposure to stocks, for growth potential, but is not prepared to
accept the volatility of stocks alone. A ________emphasizes binds
and security of capital, while having an equity component to
,provide growth potential to offset inflation.
Answer:
Balanced income fund
Question 5: If the investor needs to make a withdrawal before the
contract matures, she does not receive the benefit of the
______and receives market value for the withdrawal minus any
outstanding sales charges, such as the DSC.
Answer:
Maturity guarantee
Question 6: The ______feature allows the investor in a segregated
fund to lock in, at specified intervals, increases in the market value
of the investment. If market value has declined at a ______date,
then the______feature is not utilized.
Answer:
Reset
Question 7: ______are similar to GICs but come with the beneficial
features of a life insurance contract, such as the ability to name a
beneficiary and creditor protection.
Answer:
Accumulation annuities
Question 8: Group________do not offer the participants either
maturity or death benefit guarantees, thus not providing the plan
members with the down market "safety net" available to individual
,envestors in ________.
Answer:
Segregated funds
Question 9: A______annuity is an immediate life annuity with the
ability for the annuitant to earn market-linked returns. A
market-linked return is a return linked to performance of a market
index, such as the TSX.
Answer:
Variable Income
Question 10: ______is not based on performance and it is charged
regardless.
Answer:
Management expense ratio
Question 11: The ______is a dollar figure quoted to future policy
owners based on the current interest rate and other factors that
pertain to the annuitant and how the annuity contract is structured.
In effect, it represents a return on the sum invested in the annuity.
Answer:
Annuity rate
Question 12: Fund facts are part of the ______and are delivered to a
prospective investor before the application for the contract is
signed. They can be delivered in person or electronically via email
or through an online site. The client must acknowledge that she
, has received the ______in writing or in conversation with the agent.
Answer:
Information folder
Question 13: When the lump-sum option is selected, the annuity is
said to be ______.
Answer:
Commuted
Question 14: ______is always historical ;what has happened over a
specified period of time. It may be useful to compare funds, but
must never be used to predict what will happen in the future.
Answer:
Performance data
Question 15: The annuity is called a ______annuity if the
beneficiary receives a lump sum.
Answer:
Cash refund
Question 16: The ______is related to the MER because high
______translates into higher expenses due to buying and selling
costs. A low ______indicates a buy and hold investment
philosophy, and correspondingly lower costs for trading. A lower
MER can improve investor returns.
Answer:
COMPLETE QUESTIONS AND DETAILED SOLUTIONS LATEST
UPDATE THIS YEAR JUST RELEASED
Question 1: There is no ______in the application for a segregated
fund contract. This means that the health of the contracts policy
owner or annuitant is not accessed because guarantees are based
on the strength of the investment and not the persons life.
Answer:
Medical underwriting
Question 2: Funds are also subject to specific risks, based on their
type. For instance, a bond fund is highly susceptible to interest rate
risk but has little market risk. An ________fund, on the other hand,
has very high market risk and low interest rate risk.
Answer:
Equity
Question 3: Dividends received from ______are taxed at a lower
rate than interest income as a result of the dividend tax credit. This
increases investor appeal.
Answer:
Canadian corporations
Question 4: Balanced funds suit an investor who wants some
exposure to stocks, for growth potential, but is not prepared to
accept the volatility of stocks alone. A ________emphasizes binds
and security of capital, while having an equity component to
,provide growth potential to offset inflation.
Answer:
Balanced income fund
Question 5: If the investor needs to make a withdrawal before the
contract matures, she does not receive the benefit of the
______and receives market value for the withdrawal minus any
outstanding sales charges, such as the DSC.
Answer:
Maturity guarantee
Question 6: The ______feature allows the investor in a segregated
fund to lock in, at specified intervals, increases in the market value
of the investment. If market value has declined at a ______date,
then the______feature is not utilized.
Answer:
Reset
Question 7: ______are similar to GICs but come with the beneficial
features of a life insurance contract, such as the ability to name a
beneficiary and creditor protection.
Answer:
Accumulation annuities
Question 8: Group________do not offer the participants either
maturity or death benefit guarantees, thus not providing the plan
members with the down market "safety net" available to individual
,envestors in ________.
Answer:
Segregated funds
Question 9: A______annuity is an immediate life annuity with the
ability for the annuitant to earn market-linked returns. A
market-linked return is a return linked to performance of a market
index, such as the TSX.
Answer:
Variable Income
Question 10: ______is not based on performance and it is charged
regardless.
Answer:
Management expense ratio
Question 11: The ______is a dollar figure quoted to future policy
owners based on the current interest rate and other factors that
pertain to the annuitant and how the annuity contract is structured.
In effect, it represents a return on the sum invested in the annuity.
Answer:
Annuity rate
Question 12: Fund facts are part of the ______and are delivered to a
prospective investor before the application for the contract is
signed. They can be delivered in person or electronically via email
or through an online site. The client must acknowledge that she
, has received the ______in writing or in conversation with the agent.
Answer:
Information folder
Question 13: When the lump-sum option is selected, the annuity is
said to be ______.
Answer:
Commuted
Question 14: ______is always historical ;what has happened over a
specified period of time. It may be useful to compare funds, but
must never be used to predict what will happen in the future.
Answer:
Performance data
Question 15: The annuity is called a ______annuity if the
beneficiary receives a lump sum.
Answer:
Cash refund
Question 16: The ______is related to the MER because high
______translates into higher expenses due to buying and selling
costs. A low ______indicates a buy and hold investment
philosophy, and correspondingly lower costs for trading. A lower
MER can improve investor returns.
Answer:
