Prepare Smart with the Latest IFC Dumps (V8.02) 2026 – Check IFC Free Dumps (Part 1, Q1-Q40) First

1. A mutual fund sales representative receives a client’s purchase order for equity mutual funds and confirms that the order is appropriate based on the client’s recorded investment knowledge and risk tolerance. The client explains that she had inherited the funds from a family member. The client states her investment objective to be long term. The representative records this information and processes the order.

What the representative doesn’t know is that the client has recently lost her job and is living on unemployment insurance.

What step did the representative need to take in order to uphold her duty of care?

2. A mutual fund representative misrepresents the risks associated with a particular mutual fund in order to encourage a conservative client to purchase it.

What part of MFDA Rule No. 2 “Business Conduct” did the representative violate?

3. Based on the financial planning pyramid, what security would be appropriate for a very aggressive investor?

4. A husband wishes to transfer some of his non-registered mutual fund holdings to his wife, but wants to maintain trading authority over the transferred assets. He also wishes to ensure that should she die, the gift he is making will revert to him.

What is the appropriate account type?

5. You are the portfolio manager for the ABC asset allocation fund. Interest rates are going up; the stock market has been very volatile recently and is forecast to continue that way for the next two quarters.

What changes, if any, will you make to your current asset allocation of 50% bonds and 50% equities?

6. What equity investment philosophy places greater emphasis on industry weighting than on security selection?

7. Which of the following characteristics about mortgage mutual funds is CORRECT?

8. Which exchange in Canada deals exclusively with financial and equity futures and options?

9. Which example demonstrates direct use of capital savings?

10. In what circumstance would an investor receive a T3 or T5 reporting a capital gain from a mutual fund investment?

11. What type of risk is the fundamental risk factor for fixed-income securities?

12. What type of managed fund, recently introduced to Canada, is allowed greater use of short sales, leverage, and derivatives compared to mutual funds, but not to the same extent as hedge funds?

13. A mutual fund sales representative is asked to make a presentation to an investment club. During the presentation, he discusses personal experiences of a questionable nature.

What aspect of Professionalism is relevant to this situation?

14. An employer wants to offer his employees a pension plan. The goal is to provide a simple-to-understand plan that will reward all participants equally, regardless of their income level, and provide a retirement income based on a participant’s years of service with the company.

What plan will best meet his requirements?

15. A fund manager has diversified the equity portfolio he manages in order to reduce the potential negative impact of unfavorable information relating to any one stock.

What type of risk has he reduced?

16. Which drawback of the comparison universe method makes average fund managers look more like underperformers as the comparison period lengthens?

17. A portfolio manager first analyzes a variety of asset mixes to determine an optimal portfolio and then adjusts the mix by monitoring and rebalancing.

What is the name for the process the portfolio manager is following?

18. Rebecca, an investor in a 40% marginal tax bracket, receives $1,200 in Canadian dividends eligible for the dividend tax credit.

What is the dividend tax credit that applies to this income?

19. What criteria does the independent review committee use to determine if a potential conflict of interest, such as interfund trading, should be approved?

20. Which financial leverage ratio measures a company’s ability to repay its borrowings?

21. If the Consumer Price Index (CPI) was 140.6 last year and 146.9 this year, what was the inflation rate over the year?

22. What value are withdrawals under a ratio withdrawal plan based upon?

23. What is the step in the financial planning process that includes a discussion of a client’s household budget?

24. 1.Marc asks his new client for copies of his mortgage documents.

Which Know Your Client component is Marc researching?

25. The ZZZ Money Market Fund has a 7-day yield of 0.05%.

What is the current yield for the fund? Round your answer to two decimal places.

26. David had $10,000 in his investment account with Dynamic Investments, a mutual funds dealer. On June 28, David wants to buy 500 units in ABC Canadian Dividend Fund that has a Net Asset Value Per Unit (NAVPU) of $14.10. His friend Robert suggests that he may get a better price if he used the strategy of dollar-cost averaging. David then instructs his Dealing Representative to place a purchase order for 100 units on the first of every month starting July 1st for the next 5 months.

The orders are executed at the following NAVPUs.

July 01, $14.00

Aug. 01, $14.50

Sep. 01, $15.00

Oct. 01, $14.25

Nov. 01, $16.50

Did David get a better purchase price following the dollar-cost averaging strategy compared to making a lump-sum purchase of 500 shares on Jun 28, 20xx?

27. Quinton, a Dealing Representative, meets with his client Banji. Banji’s Know Your Client (KYC) indicates that her risk profile is “medium’’. Banji currently has $35,000 in her account which is invested 50% in the Middleton Balanced Fund and 50% in the Hector Growth Fund. She tells Quinton that she would like to contribute an additional $10,000 to purchase the Prospect Labour-Sponsored Fund.

Which of the following statements about Banji’s proposed transaction is CORRECT?

28. Which statement is most accurate about fund wraps?

29. Jeff is a new client. He is 50 years old with modest savings in the low six figures, and wants to reinvest his portfolio to ensure that he can retire comfortably at age 65. In his meeting with Jeff, the advisor uncovered some of Jeff’s biases. Jeff displayed several strong emotional biases along with a few weak cognitive biases.

What should the advisor do?

30. The performance of ABC Mutual Fund ranks 54 out of 100 funds in its peer group.

What is its quartile ranking?

31. A dealing representative explains the past performance of a mutual fund to a potential client, discussing the annual simple returns and compound returns that the fund had earned. She concluded by indicating she expects the fund’s NAVPU was likely to rise at similar rates in the future, given the economic outlook.

What unacceptable selling practice has occurred?

32. What information does Fund Facts provide to potential investors?

33. What is a key difference between marketable government bonds and treasury bills?

34. What personal information must be obtained from clients opening a non-registered account?

1) Date of birth

2) Social insurance number

3) Permanent address

4) Full legal name

35. Wilma has always used the services of a tax preparation firm to file her taxes but is skeptical that she has really benefitted. This year she plans to file her own taxes for the first time.

What would be useful for her to know?

36. What items are typically classified as current assets on the statement of financial position?

37. Xian-Li believes she is a sophisticated investor. She has constructed her own portfolio and has had some success. She does not believe in studying a company’s details such as earnings, expenses, or assets. She is more concerned with patterns in a company’s stock price over time. She believes patterns form and can be used to predict future movements in the market.

How does Xian-Li evaluate the companies in her portfolio?

38. Which statement about market risk is true?

39. Why do speculators tend to avoid diversification?

40. Sofie is a busy mutual fund sales representative. She would like to move clients that are invested in low-yielding cash accounts to her firm’s higher-yielding proprietary money market mutual fund. She confirms the orders with the clients, then instructs her new sales assistant, who will write the IFC exam next week, to enter orders to buy units in this fund.

How has Sofie violated the standards of conduct?