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Free CIFC Exam Braindumps
Canadian Investment Funds Course Questions 56–60 (page: 13)

Updated On: 23-Feb-2026
Page 13 of 46
PDF with 224 Questions

Which of the followings describes segregated funds?

  1. Segregated funds have high returns, high management fees, and cannot be redeemed until the maturity date of the contract.
  2. Segregated funds flow through capital losses to investors because the investors are the owners of the underlying fund.
  3. Segregated funds offer some protection of the capital invested but there is an added cost for the protection.
  4. Segregated funds are subject to securities regulation because they are distributed by mutual fund dealing representatives.

Answer(s): C



What purpose does it serve for non-money market mutual funds to hold money market instruments?

  1. Money market instruments primarily generate investment income that provides investors with preferential tax treatment.
  2. If the portfolio manager has an immediate need for cash, money market instruments are relatively easy to liquidate.
  3. They are purchased by non-money market funds to satisfy the regulatory requirement of fund diversification.
  4. They ensure that the fair market value of a mutual fund will not drop below a minimal market value.

Answer(s): B



One of your clients, Rakesh, had a portfolio composed of 60% ABC Equity Fund and 40% ABC Bond Fund. Since equities were performing much better than fixed income, he had increased his holdings in ABC Equity Fund to 70% and had reduced his holding in ABC Bond Fund to 30% of his portfolio.

After benefitting the growth in his ABC Equity Fund for over 2 years, Rakesh is uncomfortable with this heavy exposure to equity funds and decides to rebalance his portfolio back to 60% of ABC Equity Fund and 40% of ABC Bond Fund.

He instructs you to switch 10% of the portfolio from the ABC Equity Fund to the ABC Bond Fund.

Which of the following statements is CORRECT?

  1. Rakesh will not be subjected to a switch fee if it is outlined in the prospectus.
  2. Rakesh will not be subjected to a switch fee if his equity fund is a no-load fund.
  3. Rakesh will not be subjected to a switch fee if his original units were purchased with a sales charge.
  4. Rakesh will not be subjected to a switch fee if his equity fund is a low-load fund.

Answer(s): A



The Mutual Fund Dealers Association of Canada (MFDA) has strict rules concerning conflicts of interest.
Which of the following is TRUE?

  1. Gifts and benefits may be provided to a client if your employer is aware of the benefits and has given approval.
  2. Activities that do not relate specifically to your employer need not be reported.
  3. Only actual conflicts must be reported to your employer. Potential conflicts need not be reported because they have not happened yet.
  4. Borrowing money from a client will always be acceptable provided there is a written contract detailing the nature of the agreement.

Answer(s): A



Jasmine received an inheritance from her grandmother of $10,000. She wants to invest her money wisely. She has seen in the news that a particular energy company is doing very well and has good prospects. She has also seen how volatile its share price has been in the last year. She knows the risks of the resource sector and wants to invest but is not comfortable with so much volatility.
Which of the following mutual fund benefits would address her concern?

  1. convenience
  2. low cost
  3. diversification
  4. liquidity

Answer(s): C



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