IFC Practice Test 1 UPDATED ACTUAL Questions and CORRECT Answers
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Course
IFC
Institution
IFC
IFC Practice Test 1 UPDATED ACTUAL
Questions and CORRECT Answers
What is the purpose of fund facts?
A. To provide clients with key fund information that is relevant to their investment decisions.
B. To better align the interests of the fund with the client.
C. To determine if a fiduciary duty...
IFC Practice Test 1 UPDATED ACTUAL
Questions and CORRECT Answers
What is the purpose of fund facts?
A. To provide clients with key fund information that is relevant to their investment decisions.
B. To better align the interests of the fund with the client.
C. To determine if a fiduciary duty is present in the representative-client relationship.
D. To clarify for clients the nature and terms of their relationship with the dealer of the fund. -
CORRECT ANSWER✔✔- A
2. What term describes the range of possible future outcomes on the price of a security?
A. Beta.
B. Return.
C. Fluctuation.
D. Risk. - CORRECT ANSWER✔✔- D
3. A client has $100,000 in a savings account, $5,000 in a chequing account, and $10,000 in
loans. Calculate his net worth.
A. $90,000 B. $105,000 C. $95,000 D. $115,000 - CORRECT ANSWER✔✔- C
4. Which newspaper article would be likely to result in foreign capital moving out of a
country?
A. Government Re-elected for a Fourth Consecutive Term.
B. New Taxes on Foreign Direct Investment.
C. Corporate Taxes Reduced.
D. International Ranking of Domestic Level of Education Rises Significantly. - CORRECT
ANSWER✔✔- B
,5. Which example demonstrates direct use of capital savings?
A. Depositing funds in a Canadian bank account.
B. Purchasing an investment fund.
C. Purchasing a company's stocks.
D. Building a new factory. - CORRECT ANSWER✔✔- D
6. Which of the following transactions takes place in the secondary market?
A. Resale of previously issued securities.
B. Issue of federal Treasury bills.
C. Sale of mutual funds.
D. Issue of new debt and equity securities - CORRECT ANSWER✔✔- A
7. Which exchange in Canada deals exclusively with financial and equity futures and
options?
A. Canadian Securities Exchange.
B. The TSX Venture Exchange.
C. The Montreal Exchange.
D. The Toronto Stock Exchange - CORRECT ANSWER✔✔- C
8. What term applies to unemployment created by a new technology that eliminates the need
for subway train drivers?
A. Cyclical.
B. Frictional.
C. Structural.
D. Natural. - CORRECT ANSWER✔✔- C
, 9. 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?
A. Price and production both decrease.
B. Price and production both increase.
C. Price decreases and production increases.
D. Price increases and production decreases. - CORRECT ANSWER✔✔- B
10.If the Consumer Price Index (CPI) was 140.6 last year and 146.9 this year, what was the
inflation rate over the year?
A. 4.12% B. 6.04% C. 5.20% D. 4.48% - CORRECT ANSWER✔✔- D
(End CPI - Beginning CPI) / Beginning CPI
11. Gary chooses not to recommend that his client sell a current mutual fund to purchase a
similar new mutual fund despite pressure to meet a sales target for the new fund. What
responsibility applies to Gary's action?
A. Professional.
B. Legal.
C. Compliance.
D. Ethical - CORRECT ANSWER✔✔- D
12. What does suitability mean?
A. Recommendations are not based on the personal and financial knowledge of the client.
B. Understanding the personal and financial knowledge of the client.
C. Recommendations are appropriate for the client's unique situation and investment
objectives.
D. The investor's major concerns are addressed. - CORRECT ANSWER✔✔- C
13. Which organization regulates mutual and investment funds?
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