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QUESTION: 61

Faruq is a Dealing Representative with Smart Planning Group, a mutual fund dealer. Faruq meets with his new client, Taline, and learns that she lives on a low, fixed income. Taline tells Faruq that she wants to maximize her investment returns as high as possible to make up the difference. Taline also indicates that she cannot afford large investment losses because her income is low.
Which of the following CORRECTLY describes how Faruq should assess Taline's risk profile?

Taline's risk profile should be "high"" because she is willing to accept risk in order to maximize her investment returns.
Faruq should override the risk that Taline is able to accept because her return expectations cannot otherwise be met.
Faruq should assess Taline's risk profile based on the higher of her: (1) risk tolerance and (2) risk capacity
Taline's risk profile should be "low" because her risk capacity is low and she cannot afford lame investment losses.

Answer(s): D

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QUESTION: 62

Ellen and her only son Jeff live on the family farm with her father George. Jeff is five years old and Ellen has decided that it is time to start saving for Jeff's post-secondary education. She has called you to ask about registered education savings plans (RESPs).

Which of the following statements is TRUE?

If Jeff qualifies for additional CESG. his CESG lifetime maximum increases to $10,000.
If Jeff decides not to pursue a post-secondary education, he can keep all the CESG but it then becomes taxable.
George may open an RESP for Jeff but it will not quality to receive Canada Savings Education Grants (CESGs).
If Ellen receives the National Child Benefit Supplement (NCBS), Jeff may be eligible for the Canada Learning Bond

Answer(s): D

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QUESTION: 63

Sean purchases 500 units of Penn Canadian Equity Fund when the net asset value per unit (NAVPU) is $16.70. On December 15, the mutual fund's NAVPU is $21. On December 16, the mutual fund declares a distribution of $1.25 per unit. Sean's distribution is immediately reinvested and he purchases additional units of the mutual fund.

Which of the following statements about the effect of the distribution is correct?

After the distribution. Sean will have J&625 in cash and JB8.350 worth of the Penn Canadian Equity Fund.
The total value of Sean's mutual fund holdings after the distribution and reinvestment is §9,875.
The NAVPU of the mutual fund does not change after the distribution since Sean reinvests his distribution and purchases additional units.
Sean's distribution is reinvested at a NAVPU of $19.75 and he receives approximately 31.65 additional units.

Answer(s): D

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QUESTION: 64

Which of the following best describes implied needs of your clients?

They are needs reflected by statements made by clients regarding problems and dissatisfactions.
They are statements made by you showing readiness to solve a client's problem.
They are statements made by clients expressing the desire for lower commissions.
They are statements of wants and needs made by clients.

Answer(s): A

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