[2024] CIFC Dumps are Available for Instant Access [Q82-Q106]

NO.82 Reginald is a Dealing Representative, who feels pressure from management at the beginning of every calendar year, to open new registered retirement savings plans (RRSPs) and generate RRSP contributions. It is the end of February, and Reginald is close to reaching his personal sales objectives. He just finished an appointment with a prospective new client, Orel. Orel wants to open a tax-free savings account (TFSA) to build emergency savings. However, Reginald recommended to Orel that he should first contribute to an RRSP, and then use the tax savings for a TFSA contribution. With regards to account suitability, what can be said about Reginald’s advice?

Reginald is putting the client’s interest first by informing Orel why he should change his investment strategy.

Based on Orel’s stated need, recommending an RRSP contribution is unsuitable.

Recommending an investment solution that addresses two needs, is putting Reginald’s client’s interest first.

By convincing Orel to contribute to an RRSP, instead of a TFSA, Reginald has put his client’s interest first.

NO.83 What does a normal yield curve look like?

slopes upward to the left

is flat and has no slope

slopes down to the right

slopes upward to the right

NO.84 Which of the followings describes segregated funds?

Segregated funds have high returns, high management fees, and cannot be redeemed until the maturity date of the contract.

Segregated funds flow through capital losses to investors because the investors are the owners of the underlying fund.

Segregated funds offer some protection of the capital invested but there is an added cost for the protection.

Segregated funds are subject to securities regulation because they are distributed by mutual fund dealing representatives.

NO.85 Pierre buys a call option on a stock. What is the implication of this transaction?

Pierre has the right to buy the stock if he exercises the option.

Pierre is obligated to sell the stock if the option is exercised.

Pierre has the right to sell the stock if he exercises the option.

Pierre is obligated to buy the stock if the option is exercised.

NO.86 Gershon is a Dealing Representative and he opens a new account for his client, Isaac. Gershon collects the necessary information from Isaac in order to designate the Trusted Contact Person (TCP) for Isaac’s account.
Which of the following statements about Isaac’s TCP is CORRECT?

The TCP is an alternative to a Power of Attorney (PQA) and has the authority to make changes to Isaac’s account and direct trading.

The TCP is an alternative authority on Isaac’s account that has the power to place a temporary hold on Isaac’s account to disallow trading.

The TCP is the person whom Gershon can speak to if he becomes concerned about Isaac’s mental capacity to make financial decisions.

The TCP is the person who is designated with authority to direct financial dealings for Isaac’s account and make financial decisions.

NO.87 Ken is a member of his employer’s Defined Benefit Pension Plan (DBPP). Which of the following statements about Ken’s plan is CORRECT?

Contributions to the plan do not result in a Pension Adjustment (PA) for Ken.

The amount Ken receives in retirement depends on the performance of the investments he has selected within the plan.

The amount that Ken will receive at retirement is not guaranteed.

Income received from the plan is eligible for pension income splitting even if Ken retires before 65.

NO.88 You ask a new client, Brad, “what are your financial obligations and what are your assets?” What information are you trying to gather in order to comply with the know your client (KYC) rule?

net worth

marginal tax rate

income and cash-flow

tax consequences

NO.89 Your client, Cosmo, recently inherited $50,000 from his uncle. He wants to use this money towards his retirement savings. Cosmo is a 50-year old, self-employed carpenter and he earns on average $65,000 per year. He has a registered retirement savings plan (RRSP) with the bank worth $425,000 and a tax-free savings account (TFSA) worth $46,000. He started saving when he was 25 years old and has always made his own investment decisions. His money is mostly invested in balanced funds. He feels most comfortable with these types of mutual funds since they offer potential investment growth but without being too aggressive. Cosmo has no other assets.
What additional information do you need about Cosmo to fulfill your know your client obligation?

time horizon

income and net worth

risk tolerance

investment objectives

NO.90 Pierre buys a call option on a stock. What is the implication of this transaction?

Pierre has the right to buy the stock if he exercises the option.

Pierre is obligated to sell the stock if the option is exercised.

Pierre has the right to sell the stock if he exercises the option.

Pierre is obligated to buy the stock if the option is exercised.

NO.91 You are meeting a new client, Steven, and you are trying to determine his level of understanding of different investments. Which question would give you the most information regarding your client’s familiarity with investing?

Do you want to minimize taxes from your investments?

What rate of return do you expect from investing?

Do you understand the relationship between risk and return?

Do you have the resources to invest for the long-term?

NO.92 During the calendar year, Firmansyah received a $1,800 eligible dividend from a large Canadian bank and a foreign, dividend from his The USD/CAD exchange rates is 1.3605.
Firmansyah’s federal marginal tax bracket is 29%. The enhanced dividend gross-up rate is 38% and the federal dividend tax credit rate for eligible dividends is 15%.
What federal tax liability will be due from the investment income?

$522.00

$348.00

$695.76

$870.00

Explanation
To calculate Firmansyah’s federal tax liability from the investment income, we need to follow these steps:
Step 1: Convert the foreign dividend from USD to CAD using the exchange rate given in the question.
The exchange rate is 1.3605 CAD per USD, which means that 1 USD is equivalent to 1.3605 CAD.
Therefore, Firmansyah’s foreign dividend in CAD is:
500×1.3605=680.25
Step 2: Calculate Firmansyah’s grossed-up dividend income from both sources. A grossed-up dividend income is the actual dividend received plus a percentage of the dividend that reflects the corporate tax paid by the issuer. The percentage varies depending on whether the dividend is eligible or non-eligible.
According to [this site], an eligible dividend is a dividend paid by a Canadian corporation that meets certain criteria, such as being listed on a designated stock exchange or being a subsidiary of such a corporation. A non-eligible dividend is a dividend that does not meet these criteria, such as a dividend paid by a foreign corporation or a small Canadian business corporation. The gross-up rate for eligible dividends in 2020 was 38%, while the gross-up rate for non-eligible dividends in 2020 was 15%.
Therefore, Firmansyah’s grossed-up dividend income from both sources is:
(1800+680.25)×(1+0.38)=3426.35
Step 3: Apply Firmansyah’s federal marginal tax rate to his grossed-up dividend income to get his federal tax before credits. A marginal tax rate is the percentage of tax applied to an additional dollar of income. According to [this site], Firmansyah’s federal marginal tax rate for 2020 was 29%, as his taxable income was between $150,473 and $214,368. Therefore, Firmansyah’s federal tax before credits is:
0.29×3426.35=993.64
Step 4: Subtract Firmansyah’s federal dividend tax credit from his federal tax before credits to get his net federal tax liability from the investment income. A dividend tax credit is a percentage of the grossed-up dividend income that reflects the corporate tax paid by the issuer and avoids double taxation.
The percentage varies depending on whether the dividend is eligible or non-eligible. According to [this site], the federal dividend tax credit rate for eligible dividends in 2020 was 15%, while the federal dividend tax credit rate for non-eligible dividends in 2020 was 9.03%. Therefore, Firmansyah’s federal dividend tax credit from both sources is:
(1800+680.25)×0.38×0.15=297.88
Step 5: Subtract Firmansyah’s federal dividend tax credit from his federal tax before credits to get his net federal tax liability from the investment income. This is the amount of federal income tax that Firmansyah has to pay or has overpaid from the investment income. Therefore, Firmansyah’s net federal tax liability from the investment income is:
993.64297.88=695.76
Hence, option C is correct. References: [Canadian Investment Funds Course (CIFC) | IFSE Institute],
[Dividend Tax Credit | TurboTax Canada Tips], [Federal Income Tax Rates for Canada – TurboTax Canada Tips], [Eligible Dividends | TurboTax Canada Tips]

NO.93 When comparing mutual funds, what information would help a Dealing Representative determine a suitable mutual fund for a client?

Comparing historical rates of return between different types of mutual funds.

Assessing historical differences in the rate of return per unit of risk of similar mutual funds.

Referencing the fund code for each mutual fund that is being compared.

The rights a client has if there is a desire to cancel the purchased mutual fund.

NO.94 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?

While ETFs are prone to tracking errors, index funds are perfectly aligned with their underlying index.

ETFs can be purchased continuously throughout the trading day while index funds can only be bought or sold at the end of the day.

The market price of ETFs always matches the underlying basket of securities while there can be a discrepancy in pricing index funds.

ETFs do not have management fees since they are exchange traded while index funds do incur such fees.

NO.95 Solomon is a Dealing Representative who is excited about a new equity fund his dealer recently approved. He thinks investors will be attracted to the fund’s historical performance. He has a prospective new client, Madira, who is 25 years old. Madira has invested in mutual funds before, but not with Solomon’s dealer. She has made an appointment to open a new RRSP with Solomon’s firm.
What does Solomon need to do to make this a suitable recommendation?

Show from past fund performance, that mutual fund costs are not important if there are high returns.

Rely on the risk rating of the mutual fund when offering an investment solution.

Identify how the proposed investment is in alignment with the investor’s profile and holdings.

Match the past rates of return of the mutual fund with what is the anticipated rate of return.

NO.96 Which of the following best describes how a target date fund works?

Through the years, the asset allocation shifts from equities towards fixed income as the maturity date approaches.

Through the years, the asset allocation shifts from fixed income towards equities as the maturity date approaches.

The mutual fund is constantly rebalanced to maintain an even split between equities and fixed income through the life of the mutual fund.

In exchange for a lump-sum purchase the unitholder receives guaranteed monthly payments for life.

NO.97 Your employer has a contributory group RRSP under which he matches employee contributions, up to a maximum of 5% of salary.
Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

It is more costly and time consuming to administer than traditional pension plans.

If you leave your employer, your group RRSP stays with the employer.

You need to wait until you file your taxes to receive your contribution tax deduction.

The employer chooses the plan provider.

NO.98 Ayan wants to make a registered retirement savings plan (RRSP) contribution and deduct it from his Year 1 income. What is the deadline for this contribution (assume that it is NOT a leap year)?

March 1, Year 1

March 1, Year 2

December 31, Year 1

December 31, Year 2

NO.99 Which of the following statement about Exchange Traded Funds (ETFs) is TRUE?

Usually the market price of an ETF is the net asset value per unit (NAVPU) of the Fund on that day.

Investors may sell their ETFs in the stock market or redeem them through the Fund at the NAVPU of the day.

ETFs have lower MERs compared to mutual funds.

All ETFs are actively managed.

NO.100 Nelson is a Dealing Representative with True Wealth Advisors Inc., a mutual fund dealer. Nelson follows proper procedures related to his firm’s Relationship Disclosure Information (RDI). Which of the following CORRECTLY describes how Nelson is permitted to evidence that he satisfied his RDI obligation?

Nelson may retain a copy of the RDI in the client file with detailed notes to confirm that he provided and explained the RDI to the client.

Nelson may deliver the RDI to clients who request it and keep detailed notes of the clients who were provided with the RDI.

Nelson can formalize his relationship under the RDI using a Letter of Engagement that specifies duties, responsibilities, and level of service.

Nelson can record detailed notes which confirm that he provided and explained the Fund Facts to the client within 2 days of the RDI.

NO.101 Last year at age 70, Gregory opened a registered retirement income fund (RRIF). Recently, Gregory unexpectedly received a large cash gift and presently does not need to depend on any payments from his RRIF.
He contacts his financial advisor Eric for guidance.
Which of the following statements by his financial advisor would be CORRECT?

Periodic contributions to a RRIF are permitted until Gregory reaches the age of 71.

Withdrawals become mandatory within the first year of the plan being started.

Gregory’s account will be subjected to no maximum withdrawal limit but to an annual minimum withdrawal.

Gregory must have attained the minimum age of 71 to open a RRIF.

NO.102 Your client, Cosmo, recently inherited $50,000 from his uncle. He wants to use this money towards his retirement savings. Cosmo is a 50-year old, self-employed carpenter and he earns on average $65,000 per year. He has a registered retirement savings plan (RRSP) with the bank worth $425,000 and a tax-free savings account (TFSA) worth $46,000. He started saving when he was 25 years old and has always made his own investment decisions. His money is mostly invested in balanced funds. He feels most comfortable with these types of mutual funds since they offer potential investment growth but without being too aggressive. Cosmo has no other assets.
What additional information do you need about Cosmo to fulfill your know your client obligation?

time horizon

income and net worth

risk tolerance

investment objectives

NO.103 If an investor was looking for an investment with a risk equal to that of the market, which factor would she want in an investment?

a beta of 0

a standard deviation of 1

a standard deviation of 0

a beta of 1

NO.104 Salvatore and Harriet recently got married. They are presently renting but are looking forward to buying a new home within 5 years. They both have separate savings established in their respective registered retirement savings plans (RRSPs) of $100,000 each. They have come to Dustin, a Dealing Representative, to open an additional joint investment account to increase their savings to assist with their future plans of buying a new home.
What does Dustin need to ensure about his recommendation?

That the recommended investment is different from what they currently own to avoid over-concentration.

That the risk profile for this new account is the same as what has been determined for other accounts.

That the risk profile of the investment and each client’s individual risk profile are a match.

That the investment recommendation is based on the risk profile of the new joint account.

NO.105 Which of the following is a characteristic of a bond fund?

Income from a bond fund will primarily be interest but may also be capital gains

Bond funds are very low risk because they never go down in value.

If interest rates rise the value of a bond fund will also tend to rise.

Securities regulation specifies that bond funds must invest in investment grade bonds.

NO.106 What trait or characteristic is normally associated with a person who would be designated as a Trusted Contact Person (TCP)?

Normally has a financial interest in the client’s account or assets.

Often involved with providing care for the client who requires personal assistance.

Has the authority to make financial decisions on behalf of the client.

Can simplify difficult financial concepts for the client.

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