Maureen is 65 years old and will be retiring soon. She has a modest portfolio of mutual funds that focus on growth. As she approaches retirement, Maureen wants to switch to investments that provide steady income with low to medium risk.Given Maureen's wishes, which of the following mutual funds would be suitable for her?
Answer(s): A
Maureen is looking for investments that provide steady income with low to medium risk. Money market funds, mortgage funds, and bond funds are suitable for her because they invest in fixed- income securities that pay regular interest and have lower volatility than equity funds. Money market funds invest in short-term debt instruments such as treasury bills and commercial paper. Mortgage funds invest in mortgages or mortgage-backed securities that are secured by real estate properties. Bond funds invest in bonds issued by governments or corporations with varying maturities and credit ratings.
9 Best Retirement Income Funds Of 2023 Forbes Advisor, 5 Best Income Funds for Retirement - U.S. News, 7 Best Funds for Retirement | Investing | U.S. News
Which of the following statements about your mutual fund registration is CORRECT?
Answer(s): D
According to the Registered Investments (RIs) - Canada.ca, you must inform the regulatory authorities of any material or significant changes to your personal circumstances, such as a change of name, address, or employment status. You must also report any disciplinary actions, criminal charges, or civil lawsuits that may affect your suitability as a registrant. Failing to do so may result in suspension or revocation of your registration.
Greg, one of your clients, has been advised by a friend to invest in open-end mutual funds. He is not sure about the differences between open and closed-end funds.What would you tell Greg about open-end funds?
According to the Closed-End Funds vs. Open-End Funds: What's the Difference? - Investopedia, open- end funds are mutual funds that can issue an unlimited number of shares to investors. The number of units is not fixed, and varies with investor demand and redemption orders. Investors buy and sell open-end funds directly from the fund company at the net asset value (NAV) of the fund, which is calculated at the end of each trading day. Open-end funds are not traded on an exchange or in the secondary market.
Pierre buys a call option on a stock. What is the implication of this transaction?
According to the What Is a Call Option and How to Use It With Example - Investopedia, a call option is a contract that gives the buyer the right, but not the obligation, to buy an underlying stock at a specified price (the strike price) within a specified time period (the expiration date). The seller of a call option is obligated to sell the stock if the buyer exercises the option. Pierre buys a call option on a stock, which means he has the right to buy the stock if he exercises the option. He can also choose not to exercise the option or sell it before expiration.
Your clients, Philip and Helen, have a disabled son, Alex, age 22. They want to set up a registered disability savings plan (RDSP) for Alex and have asked you for some information.Which statement is TRUE?
Answer(s): C
A registered disability savings plan (RDSP) is a savings plan intended to help parents and others save for the long-term financial security of a person who is eligible for the disability tax credit (DTC). The DTC is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay. To be eligible for the DTC, a person must have a severe and prolonged impairment in physical or mental functions, as defined by the Income Tax Act and as certified by a medical practitioner. Therefore, Alex must qualify for the DTC in order to be eligible for an RDSP.
What is a registered disability savings plan (RDSP) - Canada.ca, Disability tax credit - Canada.ca
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