CSI Investment Funds in Canada (IFC) Part 1 Practice Exam

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• How are mutual fund distributions taxed in a non-registered account?
• What is NI 81-102?
• One basis point equals 0.01 percentage points.
• Which unemployment type results from normal labour turnover in a healthy economy, where people enter and leave the workforce and jobs are created and terminated?
• What is the difference between a 'no-load' fund and a front-end loaded fund?
• What is the difference between a sector fund and a diversified fund?
• Which term describes unemployment that rises during economic downturns and falls when the economy improves?
• Which concept describes the client's reason for selecting an investment, such as growth or safety, or liquidity?
• Which of the following is a standard performance metric commonly reported for mutual funds?
• What is the role of independent fund directors?
• Which description best characterizes a sector or specialty fund?
• Which policy involves deliberate government action to influence the economy through changes in spending or taxation?
• An investment that offers investors an interest in a pool of securities, including mutual funds, is called?
• Which inflation occurs when demand is greater than supply and inflation results?
• Which term describes securities that generate predetermined periodic interest or dividend income, including government and corporate bonds, mortgages, and preferred shares?
• The length of time within which an investor expects an investment to satisfy their objectives is called?
• What is a trailer fee and who pays it?
• Define a deferred sales charge (DSC) and typical vesting.
• NAV per unit is calculated at the end of each trading day using what inputs?
• Investments that provide an ownership stake in a company are known as what?
• What term measures the periodic change in returns relative to the average return, with greater changes indicating higher risk?
• Increase in the costs of production resulting in inflation
• Which statement best describes dollar-cost averaging?
• Risk tolerance is defined as what?
• Which statement about open-end mutual funds is true?
• Which term refers to the minimum rate at which the Bank of Canada provides short-term advances to member banks?
• Which term refers to the regulatory or firm policies governing how client information and disclosures are handled?
• Which term describes the professional who provides guidance and strategies to help clients achieve financial goals, potentially beyond selling funds?
• Which term describes savings from retail, institutional, and foreign investors that fund investments?
• When performance is described net of fees, what does this mean?
• What does 'since inception' performance represent?
• What is return of capital and how does it affect tax?
• When are mutual fund distributions typically paid?
• Capital means different things to economists and investors. In investor terms, it may mean the total of financial assets invested in securities, a home and other fixed assets, plus cash.
• What is the term for the highest price that a buyer is willing to pay for a financial instrument being quoted?
• The balance of payments comprises two separate accounts recording a country's international activities. Which two accounts are they?
• Which term describes the aim of fully understanding and satisfying the unique needs of each client?
• Which term refers to the process of learning a client's financial status, family, commitments, and goals to inform investment orders?
• What is the primary difference in how mutual funds and ETFs are priced and traded in Canada?
• What term refers to paper certificates or electronic records evidencing ownership of equity or debt obligations?
• Which term covers the size of the client's investment portfolio, employment and investment income, and periodic expenses?
• Which policy seeks to expand the money supply to encourage economic growth or combat inflationary price increases?
• Which type of unemployment occurs when work is not needed in certain seasons, such as in golf courses?
• What must be included in a fund's prospectus?
• What is a money market fund?
• Which item is explicitly excluded from the MER?
• A legal document that must accompany all new security issues and outlines the issuer's finances, use of funds, and risk is called a what?
• What is beta and alpha in performance measurement?
• Which underwriting arrangement is characterized by the dealer not guaranteeing that all or part of an issue will be sold?
• What is dollar-cost averaging and how can it relate to fund purchases?
• To an economist it means machinery, factories, and inventory required to produce other products. To an investor it may mean the total of financial assets invested in securities, a home and other fixed assets, plus cash.
• Economic indicators that behave similarly and simultaneously with the economy. Includes GDP, personal income, and retail sales
• Which market would you be in when a company issues new shares to raise capital for the first time?
• How is NAV per unit calculated for a mutual fund?
• What is the difference between a registered fund and a non-registered fund?
• Which organization establishes, operates, and maintains systems for clearing and settlement of payments among member financial institutions on behalf of their clients?
• What is the minimum rate at which the Bank of Canada lends short-term advances to chartered banks and other eligible institutions?
• Which statement defines the real interest rate?
• What is credit risk in a bond fund?
• What is liquidity risk in a mutual fund context?
• What is the term for the total assets minus total liabilities?
• What is the registrant's major concern in making investment recommendations, analyzing information about client and security to determine suitability when exemptions do not apply?
• What is a target-date fund?
• A mutual funds advisor must use due diligence to learn essential facts relevant to every client and order, including income and net worth, family commitments, and goals. This is known as?
• Which statement describes a no-load fund compared with a front-end loaded fund?
• What is the impact of a return of capital on tax reporting?
• What is the primary purpose of risk disclosure in a fund prospectus?
• Which factor includes age, marital status, number of children, and lifestyle, affecting risk bearing?
• Which market is for securities that have previously been sold by the issuer?
• Why are Fund Facts used to compare funds rather than only the prospectus?
• What is the purpose of annual and semi-annual reports for mutual funds?
• Which term describes a fund that pools investors’ money to invest in a diversified portfolio of securities?
• Which term represents the sum of the population aged 15 and over who are either employed or unemployed?
• Which statement about tax treatment of distributions in RRSP, TFSA, and non-registered accounts is true?
• What is the term for the lowest price at which a seller is willing to accept for a financial instrument being quoted?
• Which term describes a fund with an unlimited number of units issued and unit value determined by the NAV of its portfolio?
• If a fund has a low expense ratio but still underperforms its benchmark, which statement is supported by the material?
• What is the MER and what costs does it cover?
• Which term refers to the aggregate savings from retail, institutional, and foreign investors that fund investments?
• Which of the following best describes vesting under a deferred sales charge (DSC) plan?
• Which document primarily outlines the financial condition of the issuer, the use of funds, and the risk associated with the securities?
• How is fund performance typically presented to investors?
• Which unemployment category results from time spent by people searching for new jobs or transitioning to new careers?
• Suppliers and users of capital access the markets through the chartered banks, trust companies, life insurance companies, and investment dealers. These financial intermediaries can be either deposit taking or non deposit taking institutions.
• A security whose price is determined by the value of some other security or asset. E.g. an option or a future
• What does the term 'fund manager identity' refer to in a prospectus?
• How does a fund's expense ratio affect long-term returns?
• What is the difference between real GDP and potential GDP known as?
• Which unemployment arises from a mismatch between workers' skills and available jobs?
• The process in which a new issue is purchased by an investment dealer and the dealer bears the risk that the issue will be sold at the desired price is called
• Name three Canadian fund structures and a key distinction for each.
• Which inflation scenario describes a general rise in prices with the rate of increase slowing down?
• What is a global or international fund?
• Which measure is inflation-adjusted to compare real growth across time?
• Which of the following statements correctly describes the purpose of the Fund Facts disclosure sheet?
• What are Canadian-dollar hedged funds?
• Investments that provides an ownership stake in the company
• How does volatility relate to risk?
• Which fund structure is traded on an exchange with market prices that can differ from its NAV?
• A professional with a recognized designation who assists clients in establishing and reaching financial goals beyond mutual funds sales rep is called?
• What is the term for an aggregate that measures the quantity of money held by households, firms and governments, including M1, M2 or M3?
• What term describes an interest rate that does not take into account the effects of inflation?
• What is portfolio rebalancing and why is it done?
• Compared with actively managed funds, index funds typically have which of the following?
• What is the primary function of Know Your Product (KYP) in the sales process?
• What is the purpose of the NAV-based unit price in a mutual fund?
• What is Fund Facts and why is it important?
• Net trade of goods and services, net payments of interest abroad and net transfers between countries
• Which policy framework aims to regulate money supply and credit to sustain economic growth and price stability?
• Which organization regulates the distribution side of mutual funds in Canada and oversees dealer conduct?
• Who would most likely be responsible for advising clients on mutual fund products within their licensed territory?
• Which type of unemployment is primarily associated with downturns in economic activity causing job losses?
• Which term refers to the total money in circulation across households, firms and government, categorized by liquidity levels?
• What is the typical settlement period for Canadian mutual fund trades?
• Which method involves the Bank of Canada influencing interest rates by trading securities with money market participants?
• A monetary policy that decreases the money supply, usually with the intention of raising interest rates and combating inflation.
• Which of the following is NOT typically considered a financial intermediary?
• What term refers to the flow of payments between countries to finance acquisition of assets such as stocks and real estate?
• Which unemployment type occurs due to seasonal patterns in certain industries?
• The component of the balance of payments that includes net trade of goods and services, net payments of interest abroad and net transfers between countries is the
• Which curve is used to depict the short-run trade-off between inflation and unemployment?
• What is the measure of the market value in current dollars of all goods and services produced domestically in a year?
• Which term describes a policy that uses government spending and taxation to influence economic activity?
• A short mutual fund document giving investors key information including fund details, performance history, investments, and costs is called?
• What is a balanced fund?
• A market in which securities are bought and sold over the counter in which dealers act as principals when buying and selling securities for clients. Also referred to as the unlisted market.
• An economic indicator that measures the change after an economy has passed through a phase in the business cycle, including unemployment, private sector equipment spending, labour costs, inflation rate, and related interest rates.
• Why is diversification important in fund selection?
• What is currency risk in global funds?
• Which measure represents the economy's potential output at full employment?
• What market is for newly issued and underwritten securities that have never been offered to the public?
• Which national self-regulatory organization oversees the proficiency, business conduct of dealer firms and their registered employees in Canada and enforces market integrity on equity marketplaces?
• Which term best describes the documents or electronic records that prove ownership of equity or debt?
• Which statement about currency hedging in global funds is true?
• What is the term for the interest rate at which Canadian financial institutions lend each other money on an overnight basis?
• Which policy instrument is used to influence short-term interest rates by trading securities?
• Which statement best describes what annual fund reports typically include?
• Which body administers the regulatory framework surrounding Quebec's financial sector, including the securities, financial institution and compensation sectors?
• Prices in a market are determined by supply and demand.
• What is a unit equal to 1/100th of 1% called?
• Which bond fund duration is more sensitive to interest rate changes?
• What is a risk-adjusted return, and which measure is commonly used?
• Which statement best contrasts an active fund with an index fund?
• What describes the portion of one year's GDP that must be sacrificed to reduce inflation by 1 percentage point?
• Which statement correctly describes the real interest rate?
• Who is licensed to sell and provide advice on mutual fund products to clients in the province or territory where licensed?
• What is a redemption fee (or exit fee) and when might it apply?
• Which statement about MER is accurate?
• Which term includes timely disclosure of material changes in a company's affairs and examination of prospectuses to ensure full, true and plain disclosure?
• Which term describes the ongoing evaluation of whether a mutual fund investment is appropriate for a client?
• Which term best describes monetary aggregates?
• Which account records the flow of payments between countries to finance the acquisition of assets such as stocks, bonds, and real estate?
• How does interest rate risk affect bond funds?
• What is the term for the economy's output when all resources are fully employed?
• What is ex-distribution?
• Which curve illustrates the short-run relationship between inflation and unemployment?
• Which term is most directly involved with gathering data such as income, net worth, and investment goals to determine suitability for investment recommendations?
• Which organization is responsible for market integrity rules regarding trading activity on Canadian equity marketplaces?
• Which market is a large computer network through which investment dealers negotiate transactions; most bonds trade there, and some stocks as well?
• Which GDP measure is adjusted for changes in price levels over time?
• Which document serves as a concise disclosure sheet for ongoing updates to investors?
• Define a front-end sales charge (load).
• What term describes a period of slowing growth that does not turn negative?
• Which phrase corresponds to the obligation to understand risk level, fees, income type, and tax consequences of funds offered for sale?
• How do 'return of capital' and 'adjusted cost base' interact for tax purposes?
• Which statement best describes the investment guide's obligation to provide the best client service and refuse to sell a product that is unsuitable?
• What is a fund of funds (FOF)?
• In an RRSP, when are distributions taxed?
• At this level, the economy is thought to be operating at full capacity. Which concept is this?
• Which policy is aimed at increasing the money supply to stimulate economic growth?
• Which entity is responsible for setting and monitoring continuing education requirements and for enforcing a code of ethics in the province of Quebec?
• Which economic condition denotes a general decline in the price level?
• Which organization is responsible for clearing and settling payments among Canadian banks?
• What is the term for the offering of shares by a company that has never issued shares before?
• Which term best defines the obligation to ensure recommendations match client risk and goals?
• Which statement best defines an index fund?
• Which document is designed to give investors key information about a fund, including the fund's objectives, performance history, holdings, and costs?
• What is Know Your Client (KYC) and Know Your Product (KYP) in fund sales?
• Which of the following periods is NOT typically shown when presenting fund performance?
• What distinguishes an equity fund from a fixed-income fund?
• Which is a mutual fund whose shares are issued and redeemed by the investment company at the request of investors?
• Why might an investor choose a global equity fund?
• What term is associated with the potential for variability in investment returns? The source equates volatility with risk.
• What term refers to the regulation of the money supply and available credit for promoting sustained economic growth and price stability?
• How is risk tolerance used in IFC Part 1?
• Which concept is described as the degree of price fluctuation of an investment?
• Which term describes a decline in the rate of price increases, with prices still rising?
• What is true about liquidity in Canadian mutual funds?
• What is the marketplace where buyers and sellers of securities meet to trade, with prices established by supply and demand?
• Which term describes an economic indicator used to predict the next phase of the business cycle, often including stock prices, money supply, housing starts, and new orders?
• What is a key trade-off of hedged funds?
• Which organization regulates the distribution (dealer) side of the mutual fund industry in Canada?