Question 1

Which of the following statements about your mutual fund registration is CORRECT?

Options :

A : You can sell mutual funds anywhere in Canada as long as you are registered with one of the provincialor territorial securities commissions.

B : Your online application must be reviewed and approved by your mutual fund dealer before you canbegin to sell mutual funds.

C : You must renew your registration through the online NRD system every two years.

D : You must inform the regulatory authorities of any material or significant changes to your personalcircumstances.

Answer: D

Question 2

Ian is 25, employed, and has no dependents. He has no current financial or family obligations. He has askedfor your recommendation for investing a $50,000 inheritance. What asset allocation would typically suit aninvestor with Ian’s characteristics?

Options :

A : 10% in a bond fund, 80% in equity funds, 10% in a money market fund

B : 10% in equity funds, 70% in a bond fund, 20% in a money market fund

C : 35% in equity, 25% in a money market fund, 60% in a bond fund

D : 50% in equity funds, 20% in a bond fund, and 30% in a money market fund

Answer: A

Question 3

An investor who wants to deplete their funds within the next five years is considering various withdrawalplans. Assuming the investor is less concerned about predictable annual cash flows, what withdrawal plantype is most appropriate for the investor?

Options :

A : Ratio.

B : Fixed-dollar.

C : Life.

D : Fixed-period.

Answer: D

Question 4

When selecting an investment to add to a portfolio, what feature would reduce the overall risk?

Options :

A : High standard deviation

B : High beta

C : Low variance

D : Low alpha

Answer: C

Question 5

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

Options :

A : Mutual funds are required to calculate the MER on a daily basis.

B : Trailer and brokerage fees are charged separately from the MER.

C : The MER reflects the percentage of each dollar of fund assets that is used to pay for managementservices.

D : Mutual fund performance is not impacted by the MER since rates of return are published net of fees.

Answer: C

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