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Free CIFC Exam Braindumps
Canadian Investment Funds Course Questions 21–25 (page: 6)

Updated On: 23-Feb-2026
Page 6 of 46
PDF with 224 Questions

Which of the following statements about capital gains distributions from mutual fund trusts is correct?

  1. Capital gains from mutual fund trusts are deferred until the investor exits the mutual fund.
  2. Capital gains distributions from a mutual fund trust are reported annually on a T3.
  3. Capital gains distributions are not a disposition and are therefore not taxable.
  4. Capital gains from mutual fund distributions are 100% taxable.

Answer(s): B



Which of the following is a rationale for a portfolio manager to use a passive portfolio management strategy?

  1. The manager does not believe in using benchmarks.
  2. The manager wishes to create capital gains in the mutual fund by frequently buying and selling stocks
  3. The manager believes he or she can outperform the market with his or her stock picking skills.
  4. The manager believes that as the markets are fairly priced, it would be futile to look for mis-priced securities.

Answer(s): D



Your client, Rinaldo, wants to know more about the fees associated with his mutual funds.
What can you tell him about a mutual fund's management expense ratio (MER)?

  1. Mutual funds are required to calculate the MER on a daily basis.
  2. Trailer and brokerage fees are charged separately from the MER.
  3. The MER reflects the percentage of each dollar of fund assets that is used to pay for management services.
  4. Mutual fund performance is not impacted by the MER since rates of return are published net of fees.

Answer(s): C



Sujay contributes 3% of his $60,000 salary to his employer's defined contribution pension plan. His employer contributes the same amount to the plan. How will this affect his registered retirement savings plan (RRSP) contribution room for the year?

  1. It will have no effect. RRSP contribution room is based on earned income only.
  2. It will reduce Suiay's contribution room by 51,800.
  3. It will reduce Suiay's contribution room by $1800
  4. It will reduce Suiay's contribution room by $3,600.

Answer(s): D



Exchange traded funds (ETFs) that track an index and index mutual funds have many similarities. However, what is a major difference between these two products?

  1. While ETFs are prone to tracking errors, index funds are perfectly aligned with their underlying index.
  2. ETFs can be purchased continuously throughout the trading day while index funds can only be bought or sold at the end of the day.
  3. The market price of ETFs always matches the underlying basket of securities while there can be a discrepancy in pricing index funds.
  4. ETFs do not have management fees since they are exchange traded while index funds do incur such fees.

Answer(s): B



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