IFIC: Chapter 1 questions with complete
solutions
Fixed Trusts - correct answer ✔✔First investment funds available to the general public. Consist of
domestic and foreign government bonds.
Closed-End Funds - correct answer ✔✔Corporations whose business is making investments. The firm
would issue shares to investors and use the proceeds to create an investment portfolio. After the initial
issue of shares, the fund is closed to other investors.
Open-ended mutual funds - correct answer ✔✔Mutual fund units are always available from the fund to
meet the purchasing demands of investors without restriction. Mutual funds are only available for
purchase through a fund company or financial institution and do not trade on a stock exchange.
Types of Responsibility - correct answer ✔✔Legal, Ethical, Professional
Legal Responsibility - correct answer ✔✔Make legal responsibilities clear, An investment is suitable if its
the client's goals, financial condition, personal circumstances, investment knowledge and risk tolerance.
All provincial securities act make this legal responsibility clear.
Ethical Responsibility - correct answer ✔✔You must place your client's needs before your own needs
(such as reaching a sales target) or those of your dealer.
Professional Responsibility - correct answer ✔✔You must provide the best client service possible.
Compliance - correct answer ✔✔Means following the rules, whether those rules are legal requirements
or dealer policies. If you are not in compliance you may be liable to subject to dismissal.
KYC - correct answer ✔✔1. Financial goals and objectives.
2. Financial circumstances.
solutions
Fixed Trusts - correct answer ✔✔First investment funds available to the general public. Consist of
domestic and foreign government bonds.
Closed-End Funds - correct answer ✔✔Corporations whose business is making investments. The firm
would issue shares to investors and use the proceeds to create an investment portfolio. After the initial
issue of shares, the fund is closed to other investors.
Open-ended mutual funds - correct answer ✔✔Mutual fund units are always available from the fund to
meet the purchasing demands of investors without restriction. Mutual funds are only available for
purchase through a fund company or financial institution and do not trade on a stock exchange.
Types of Responsibility - correct answer ✔✔Legal, Ethical, Professional
Legal Responsibility - correct answer ✔✔Make legal responsibilities clear, An investment is suitable if its
the client's goals, financial condition, personal circumstances, investment knowledge and risk tolerance.
All provincial securities act make this legal responsibility clear.
Ethical Responsibility - correct answer ✔✔You must place your client's needs before your own needs
(such as reaching a sales target) or those of your dealer.
Professional Responsibility - correct answer ✔✔You must provide the best client service possible.
Compliance - correct answer ✔✔Means following the rules, whether those rules are legal requirements
or dealer policies. If you are not in compliance you may be liable to subject to dismissal.
KYC - correct answer ✔✔1. Financial goals and objectives.
2. Financial circumstances.
