IFSE - CIFC Practice Questions and Answers
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someone with whom you already have a business relationship answer - 1. To whom are you
permitted to make an unsolicited telephone call to market new products ("cold-call") if they
have signed up on the National Do Not Call List (DNCL)?
It is a self-regulatory organization for the distribution side of the Canadian mutual funds
industry. answer - Which of the following statements about Mutual Fund Dealers Association of
Canada (MFDA) is CORRECT?
OBSI helps resolve disputes between participating banking services and investment firms and
their clients. answer - What is the role of the Ombudsman for Banking and Investments (OBSI)?
$10,000 answer - Jeff Thomson is a newly licensed dealing representative. He has received a
cash deposit of $12,000 and would like you to guide him as to whether he is required to report
the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
What is the minimum dollar amount of a cash deposit that Jeff is required to report to FINTRAC?
Jonathan, who recommends mutual funds to his clients based on which funds pay the highest
commission. answer - 5. Which of the following dealing representatives is in a conflict of
interest situation?
Ethical conduct means conforming to approved standards. answer - Which of the following
statements regarding ethical conduct is true?
standard of conduct for ethical behaviour answer - The Mutual Fund Dealers Association of
Canada (MFDA) has several rules dealing with different aspects of the mutual fund business.
,Conduct Rule 2 offers details on how both you and your employer are to carry out business.
Which of the following is covered in Rule 2?
Protecting the confidentiality of client information. answer - Josephine is a newly registered
dealing representative. Which of the following actions constitute proper conduct expected of
her?
Objections to your registration may be due to unacceptable past employment history in the
securities industry. answer - Which statement about the registration process is TRUE?
All unethical actions are breaches of the standard of conduct. answer - 10. Which of the
following statements is TRUE?
outside business activities answer - Under Mutual Fund Dealers Association of Canada (MFDA)
Rules you have the duty to disclose which of the following?
"The prospectus indicates that this is a speculative fund that is suitable for investors with a
growth objective and a high risk tolerance." answer - Sarah, a mutual fund dealing
representative, was reviewing the features and characteristics of an emerging markets mutual
fund that she was considering for a client. Based on her client's objectives and risk profile, Sarah
thought it would be a suitable investment. If Sarah makes the following statements, in which
instance would she be following best practices as a mutual funds dealing representative?
Disclosures should be provided in writing to the client on the account opening form or on a
separate form. answer - Today is Sheldon's first day as a dealing representative. He is in the
process of opening an account for his client. He is not sure of how to furnish the relationship
disclosures to his first client. How should Sheldon provide the relationship disclosures required
under the Client Relationship Model (CRM)?
capital preservation answer - Your clients , Ravi and Nuzah Patel, both 30 years of age, recently
married. Ravi earns an annual salary of $55,000 as an X-ray technician. Nuzah earns $72,000 per
year as a pharmacist. They are currently viewing houses in the $200,000-to-$225,000 price
, range and hope to purchase a house within the next year. They plan to use their wedding gifts
of cash totalling $12,000 as a down payment. What is the Patels' investment objective for the
$12,000 in cash?
low tolerance for risk answer - 15. Gilles and Marielle Lachette, both 59, are the lucky winners
of the latest home lottery sponsored by their local children's hospital. The Lachettes sold their
prize and received $500,000 in cash after transaction costs. They have decided to use this
money to retire early within two years. Since the money will be used to supplement their
retirement, they do not want to take on unnecessary risk. Gilles is a city bus driver earning
$49,000. Marielle works as a bookkeeper, earning $35,000 annually. The Lachettes have paid
down the mortgage on their home, which is now worth $200,000. Their two children, now
grown, have good jobs and are financially independent. The only financial asset they own is an
RRSP in Marielle's name worth $78,000. The RRSP holds five guaranteed investment certificates
(GICs) with maturities between one to five years. Given that the Lachettes have no investment
knowledge or experience, they req
clarify client status, problems and opportunities answer - Diego, a mutual fund dealing
representative, is reviewing his notes from a recent client meeting. His client, Linda, wants to
retire next year with an annual pre-tax income of $50,000. However, she does not have the
financial resources necessary to do so. Before his next meeting with Linda, Diego prepares
several scenarios for her to review. The first scenario requires Linda to delay her retirement for
another five years. The second scenario requires Linda to accept a pre-tax income of $45,000
per year. The third scenario requires Linda to take greater investment risk with her portfolio.
Diego will discuss these scenarios with Linda to determine which one is appropriate. Where are
Diego and Linda in the strategic investment planning process?
Suitability is a cyclical multi-step process. answer - Which of the following statements regarding
the suitability process is true?
Clear the transaction with your Compliance Department or Branch Manager. answer - One of
your clients, Rahman, is a retired senior citizen with a conservative portfolio of around
$750,000. He is always on the lookout for investments that can offer him a better yield to
supplement his income. In his quest for a higher yield, he comes to your office and asks you to
liquidate half of his portfolio and invest the proceeds in a start-up mining company. The
Rated 100% Correct
someone with whom you already have a business relationship answer - 1. To whom are you
permitted to make an unsolicited telephone call to market new products ("cold-call") if they
have signed up on the National Do Not Call List (DNCL)?
It is a self-regulatory organization for the distribution side of the Canadian mutual funds
industry. answer - Which of the following statements about Mutual Fund Dealers Association of
Canada (MFDA) is CORRECT?
OBSI helps resolve disputes between participating banking services and investment firms and
their clients. answer - What is the role of the Ombudsman for Banking and Investments (OBSI)?
$10,000 answer - Jeff Thomson is a newly licensed dealing representative. He has received a
cash deposit of $12,000 and would like you to guide him as to whether he is required to report
the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
What is the minimum dollar amount of a cash deposit that Jeff is required to report to FINTRAC?
Jonathan, who recommends mutual funds to his clients based on which funds pay the highest
commission. answer - 5. Which of the following dealing representatives is in a conflict of
interest situation?
Ethical conduct means conforming to approved standards. answer - Which of the following
statements regarding ethical conduct is true?
standard of conduct for ethical behaviour answer - The Mutual Fund Dealers Association of
Canada (MFDA) has several rules dealing with different aspects of the mutual fund business.
,Conduct Rule 2 offers details on how both you and your employer are to carry out business.
Which of the following is covered in Rule 2?
Protecting the confidentiality of client information. answer - Josephine is a newly registered
dealing representative. Which of the following actions constitute proper conduct expected of
her?
Objections to your registration may be due to unacceptable past employment history in the
securities industry. answer - Which statement about the registration process is TRUE?
All unethical actions are breaches of the standard of conduct. answer - 10. Which of the
following statements is TRUE?
outside business activities answer - Under Mutual Fund Dealers Association of Canada (MFDA)
Rules you have the duty to disclose which of the following?
"The prospectus indicates that this is a speculative fund that is suitable for investors with a
growth objective and a high risk tolerance." answer - Sarah, a mutual fund dealing
representative, was reviewing the features and characteristics of an emerging markets mutual
fund that she was considering for a client. Based on her client's objectives and risk profile, Sarah
thought it would be a suitable investment. If Sarah makes the following statements, in which
instance would she be following best practices as a mutual funds dealing representative?
Disclosures should be provided in writing to the client on the account opening form or on a
separate form. answer - Today is Sheldon's first day as a dealing representative. He is in the
process of opening an account for his client. He is not sure of how to furnish the relationship
disclosures to his first client. How should Sheldon provide the relationship disclosures required
under the Client Relationship Model (CRM)?
capital preservation answer - Your clients , Ravi and Nuzah Patel, both 30 years of age, recently
married. Ravi earns an annual salary of $55,000 as an X-ray technician. Nuzah earns $72,000 per
year as a pharmacist. They are currently viewing houses in the $200,000-to-$225,000 price
, range and hope to purchase a house within the next year. They plan to use their wedding gifts
of cash totalling $12,000 as a down payment. What is the Patels' investment objective for the
$12,000 in cash?
low tolerance for risk answer - 15. Gilles and Marielle Lachette, both 59, are the lucky winners
of the latest home lottery sponsored by their local children's hospital. The Lachettes sold their
prize and received $500,000 in cash after transaction costs. They have decided to use this
money to retire early within two years. Since the money will be used to supplement their
retirement, they do not want to take on unnecessary risk. Gilles is a city bus driver earning
$49,000. Marielle works as a bookkeeper, earning $35,000 annually. The Lachettes have paid
down the mortgage on their home, which is now worth $200,000. Their two children, now
grown, have good jobs and are financially independent. The only financial asset they own is an
RRSP in Marielle's name worth $78,000. The RRSP holds five guaranteed investment certificates
(GICs) with maturities between one to five years. Given that the Lachettes have no investment
knowledge or experience, they req
clarify client status, problems and opportunities answer - Diego, a mutual fund dealing
representative, is reviewing his notes from a recent client meeting. His client, Linda, wants to
retire next year with an annual pre-tax income of $50,000. However, she does not have the
financial resources necessary to do so. Before his next meeting with Linda, Diego prepares
several scenarios for her to review. The first scenario requires Linda to delay her retirement for
another five years. The second scenario requires Linda to accept a pre-tax income of $45,000
per year. The third scenario requires Linda to take greater investment risk with her portfolio.
Diego will discuss these scenarios with Linda to determine which one is appropriate. Where are
Diego and Linda in the strategic investment planning process?
Suitability is a cyclical multi-step process. answer - Which of the following statements regarding
the suitability process is true?
Clear the transaction with your Compliance Department or Branch Manager. answer - One of
your clients, Rahman, is a retired senior citizen with a conservative portfolio of around
$750,000. He is always on the lookout for investments that can offer him a better yield to
supplement his income. In his quest for a higher yield, he comes to your office and asks you to
liquidate half of his portfolio and invest the proceeds in a start-up mining company. The
