Pass IFSE Institute CIFC exam Dumps 100 Pass Guarantee With Latest Demo [Q72-Q94]

NEW QUESTION 72
Which investor’s needs would be BEST met with an income trust?

Tina wants a product that guarantees the return of at least 75% of her capital upon maturity of the contract or upon her death.

Leanne wants a product that employs alternative strategies such as leverage and short selling to amplify returns.

Gary wants to invest in a product which provides a consistent cash flow of interest, royalties, and lease payments passed along to unitholders.

Phil wants to invest in a product where the performance is linked to that of an underlying asset and the issuer is obligated to repay his principal at maturity.

NEW QUESTION 73
Bernadette has a high-paying job and is in the top tax bracket. She recently received a payment of $5 million upon the settlement of her uncle’s estate. Bernadette would like to invest her inheritance in financial products that would not only grow her money but is also income tax friendly.
Which of the following would provide the most favourable tax treatment?

Dividends received from a large foreign corporation.

Coupon payments from Government of Canada bonds.

Capital gains from a large Canadian corporation.

Eligible dividends from a publicly-listed Canadian corporation

NEW QUESTION 74
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.

NEW QUESTION 75
Xerxes, 45 years old, is a successful architect, having an annual income of $185,000. He has around $10,000 in his non-registered account, which he is looking to invest in a tax-efficient manner.
From the following options, which would be the most tax-efficient?

target date fund

bond fund

asset allocation fund

Canadian equity index fund

Explanation
A Canadian equity index fund would be the most tax-efficient option for Xerxes. A Canadian equity index fund is a type of mutual fund that invests in a portfolio of Canadian stocks that track a specific market index, such as the S&P/TSX Composite Index. A Canadian equity index fund would be tax-efficient for Xerxes because it would generate mostly capital gains and eligible dividends, which are taxed at lower rates than interest income or foreign dividends. A Canadian equity index fund would also have low turnover and minimal distributions, which would defer taxes until Xerxes sells his units. The other options are less tax-efficient than a Canadian equity index fund. A target date fund is a type of mutual fund that adjusts its asset allocation over time based on a predetermined retirement date. A target date fund would be less tax-efficient than a Canadian equity index fund because it would have higher turnover and more distributions, which would trigger taxes every year. A target date fund would also invest in a mix of asset classes, such as bonds and foreign equities, which would generate interest income and foreign dividends that are taxed at higher rates than capital gains and eligible dividends. A bond fund is a type of mutual fund that invests in a portfolio of fixed-income securities, such as government bonds, corporate bonds, and mortgage-backed securities. A bond fund would be less tax-efficient than a Canadian equity index fund because it would generate mostly interest income, which is taxed at the highest rate among different types of investment income. A bond fund would also have regular distributions, which would trigger taxes every year. An asset allocation fund is a type of mutual fund that invests in a portfolio of other mutual funds that cover different asset classes, such as stocks, bonds, and cash equivalents. An asset allocation fund would be less tax-efficient than a Canadian equity index fund because it would have higher fees and more distributions, which would reduce the net returns and trigger taxes every year. An asset allocation fund would also invest in a mix of asset classes, some of which would generate interest income and foreign dividends that are taxed at higher rates than capital gains and eligible dividends.
References: [Canadian Equity Index Funds], [Tax-Efficient Investing], [Target Date Funds], [Bond Funds],
[Asset Allocation Funds]

NEW QUESTION 76
Kerry’s total income this past year was $100,000 and she claimed a tax deduction of $2,000. When the tax return is filed, what would be the federal tax payable when applying the following federal tax rates?
(Round to the closest whole dollar for the final answer.)

$17,472

$18,754

$24,000

$25,480

NEW QUESTION 77
Which of the following statements about registered education savings plans (RESPs) is CORRECT?

Contributions to RESPs are tax deductible.

There is a yearly contribution limit per beneficiary.

RESPs must be collapsed by the end of the 31st year of its starting date

Contributed funds grow tax-free within the plan.

NEW QUESTION 78
Charlotte has received proceeds from a deceased family member’s estate. Charlotte decides to visit Malik, who’s a Dealing Representative at her bank. She tells Malik, she does not know much about trading ETFs, but she wants to invest in ETFs. Charlotte says she feels fortunate to have this money and that she’s not worried about losing it because she never planned on having any of it.
What element of the Know Your Client (KYC) information has Malik been able to learn?

Risk Profile

Risk Capacity

Risk Preference

Risk Tolerance

NEW QUESTION 79
Hamid, the portfolio manager of the Trabant Canadian Equity Fund is deciding on some new investments. He has identified a retirement residence company as well as a discount clothing retailer that both seem to have good prospects and appear undervalued. What investment approach is Hamid using?

top-down

bottom-up

growth at a reasonable price

technical investing

NEW QUESTION 80
Frederic recently sold his units in a US dollar (USD) denominated mutual fund. He wants to convert the proceeds back to Canadian dollars (CAD). If he received proceeds of $1,200 USD from the sale and the exchange rate is $1 CAD for $0.99 USD, how much will Frederic receive in Canadian dollars?

$1-188.00

$1,200.00

$1, 12.12

$1,320.00

NEW QUESTION 81
Your client Jerry’s asset mix is deviating from the original target asset mix because the stock market has had strong performance. Equities are now over-weighted in Jerry’s account. The original target asset mix is still valid since Jerry’s situation has not changed. He is invested in several bond and equity mutual funds. What should you do?

advise him to change his know your client (KYC) form to reflect more growth

advise him to do nothing since equities could outperform bonds in the next year

advise him to sell a portion of assets invested in bond funds and reinvest the proceeds into equity funds

advise him to sell a portion of assets invested in equity funds and reinvest the proceeds into bond funds

Explanation
According to the Canadian Investment Funds Course, asset mix rebalancing is the process of restoring the portfolio to its original or target asset allocation by selling or buying assets. Asset mix rebalancing is necessary to maintain the desired level of risk and return, as well as to align the portfolio with the investor’s objectives and circumstances. Asset mix rebalancing can be done periodically, such as annually or quarterly, or based on a threshold, such as when an asset class deviates from its target weight by a certain percentage.
In this case, Jerry’s asset mix is deviating from the original target asset mix because the stock market has had strong performance. Equities are now over-weighted in Jerry’s account. The original target asset mix is still valid since Jerry’s situation has not changed. He is invested in several bond and equity mutual funds.
Therefore, the best course of action is to advise him to sell a portion of assets invested in equity funds and reinvest the proceeds into bond funds. This will bring his portfolio back to its target asset mix and reduce his exposure to equity risk.
The other options are not advisable because:
Advising him to change his know your client (KYC) form to reflect more growth would imply that his risk tolerance and objectives have changed, which is not the case. Changing the KYC form would also require a new suitability assessment and documentation.
Advising him to do nothing since equities could outperform bonds in the next year would ignore the importance of asset mix rebalancing and expose him to more risk than he is comfortable with. Doing nothing would also mean that his portfolio is not aligned with his original plan and expectations.
Advising him to sell a portion of assets invested in bond funds and reinvest the proceeds into equity funds would further increase his equity weight and risk, which is contrary to his original target asset mix and risk tolerance.
Therefore, the correct answer is D. advise him to sell a portion of assets invested in equity funds and reinvest the proceeds into bond funds.
References: 1: Canadian Investment Funds Course – IFSE Institute 2 (Unit 10: Portfolio Management)

NEW QUESTION 82
Last year Peter’s earned income from employment was $50,000.
Last year, after receiving a $2 per share in dividends from 500 shares in ABC Inc., a publicly-traded Canadian corporation, he sold his shares. The sale resulted in a capital gain of $15,000.

Based on the tax rates mentioned above, what is Peter’s net federal tax liability for the year? (Round to 2 decimal places).

$9,953.30

$9,193.69

$9,113.53

$9,696.15

Explanation
To calculate Peter’s net federal tax liability for the year, we need to follow these steps:
* Step 1: Calculate Peter’s taxable income. This is the amount of income that is subject to federal income tax. It is equal to his earned income from employment plus his net capital gain plus his grossed-up dividend income. A net capital gain is 50% of the capital gain realized from selling an asset. 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. According to the image, the dividend gross-up rate is
15.02%. Therefore, Peter’s taxable income is:
50000+0.5*15000+(500*2)*(1+0.1502)=68251.00
* Step 2: Apply the federal tax rates to Peter’s taxable income according to the tax brackets shown in the image. The federal tax rates are progressive, meaning that higher income is taxed at higher rates.
Therefore, Peter’s federal tax before credits is:
0.15*(485350)+0.205*(6825148535)=11293.69
* Step 3: Subtract the federal tax credits from Peter’s federal tax before credits. A tax credit is an amount that reduces the tax payable by a taxpayer. There are two types of federal tax credits: non-refundable and refundable. Non-refundable tax credits can only reduce the tax payable to zero, but not below zero.
* Refundable tax credits can reduce the tax payable below zero, resulting in a refund to the taxpayer. In this question, we assume that Peter only has two non-refundable tax credits: the basic personal amount and the dividend tax credit. The basic personal amount is a fixed amount that every taxpayer can claim to reduce their taxable income. According to this site, the basic personal amount for 2021 is $13,808.
The 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. According to this site, the federal dividend tax credit rate for eligible dividends in 2021 is 15.0198%. Therefore, Peter’s federal tax credits are:
0.15*13808+0.150198*(500*2)*0.1502=2100
* Step 4: Subtract Peter’s federal tax credits from his federal tax before credits to get his net federal tax liability. This is the amount of federal income tax that Peter has to pay or has overpaid for the year.
Therefore, Peter’s net federal tax liability is:
11293.692100=9193.69
Hence, option B is correct. References: Canadian Investment Funds Course (CIFC) | IFSE Institute, Federal Income Tax Rates for Canada – TurboTax Canada Tips, Capital Gains Tax in Canada | Wealthsimple, Dividend Tax Credit | TurboTax Canada Tips, Basic Personal Amount (BPA)

NEW QUESTION 83
Sven owns preferred shares that give him the option to sell his holdings back to the issuing company at a predetermined price and within a specified time. What type of preferred shares does Sven own?

retractable

participating

convertible

redeemable

NEW QUESTION 84
Which statement regarding the underwriting process and over-the-counter (OTC) markets is CORRECT?

Corporations must have their shares listed both on an exchange and the OTC market during the underwriting process.

During the underwriting process investment bankers raise investment capital from investors on behalf of corporations and governments issuing securities.

Many new stock issues that are underwritten by securities firms are first listed on a stock exchange before they are sold over-the-counter.

The disclosure standards for stock exchanges are not as stringent as those imposed by the OTC market.

NEW QUESTION 85
What information does Fund Facts provide to potential investors?

What the mutual fund is currently investing in.

How to calculate the taxes owed from investment income.

The portfolio management strategy that is used.

The remuneration paid to the Independent Review Committee.

NEW QUESTION 86
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?

It will have no effect. RRSP contribution room is based on earned income only.

It will reduce Suiay’s contribution room by 51,800.

It will reduce Suiay’s contribution room by

It will reduce Suiay’s contribution room by $3,600.

NEW QUESTION 87
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

NEW QUESTION 88
Your client has very limited investment knowledge and is confused about what is meant by “marginal tax rate”. What do you tell him?

It is the tax rate applied to the next dollar earned.

It is the tax rate used in calculating taxable capital gains.

It is an amount resulting from dividing your total tax liability by your taxable income for the year.

It is the number used to gross-up Canadian dividend income.

NEW QUESTION 89
Last year Peter’s earned income from employment was $50,000.
Last year, after receiving a $2 per share in dividends from 500 shares in ABC Inc., a publicly-traded Canadian corporation, he sold his shares. The sale resulted in a capital gain of $15,000.

Based on the tax rates mentioned above, what is Peter’s net federal tax liability for the year? (Round to 2 decimal places).

$9,953.30

$9,193.69

$9,113.53

$9,696.15

NEW QUESTION 90
Kendrick is a newly registered Dealing Representative for Oak Solid Financial. He has been assigned the task of contacting existing clients where there has been no record of consultation within the last 12 months. The first person he sees on his list is a client named Chandra Ruffino. He double-checks if her phone number is on the Do Not Call List (DNCL) registry. Which of the following statements apply?

If Chandra is on the DNCL registry, Kendrick is still eligible to contact the client of Oak Solid Financial.

If Chandra has been on the DNCL registry for 18 months, then Kendrick is not allowed to contact her.

If Chandra is on the DNCL, then Kendrick can only contact her if she is specifically his client.

If Chandra had closed her account within the last 12 months and registered herself on the DNCL, then Kendrick cannot call her.

NEW QUESTION 91
Danny is a Dealing Representative for Everbright Investments. He met with his client Adele, who has
$1,000,000 to invest. During their meeting Danny determines that Adele has a high-risk profile. In addition, he learns that she has an excellent understanding of equities and how volatile they can be. Danny is considering recommending growth funds specifically, and making a recommendation from the following investment options:

Based on the information provided, which mutual fund should Danny recommend?

ABC Global Equity Fund.

DEF European Equity Fund.

LMN Asia Pacific Equity Fund.

Invest equally in all 3 funds.

NEW QUESTION 92
Yesterday, Mariana who is new to investing and purchased mutual funds for the very first time. She shared her excitement with her good friend, Julius. However, after Julius learned about her investment, he admits that he had a bad experience with mutual fund investing and that he lost money. Mariana regrets not talking to Julius prior to making her decision. Her feelings of enthusiasm have changed to fear. She is wondering if it is too late to change her mind and cancel her purchase order.
Which statement regarding the right of withdrawal is CORRECT?

The right of withdrawal for investors can be different depending on which province (or territory) the fund was purchased within.

The Canadian Securities Administrators (CSA) created legislation that addresses the right of withdrawal for investors.

The Mutual Fund Dealers Association of Canada (MFDA) have written conduct rules regarding the right of withdrawal.

Mariana has to wait two business after her purchase order has been settled to exercise the right of withdrawal.

NEW QUESTION 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.

NEW QUESTION 94
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.

Pass IFSE Institute CIFC exam Dumps 100 Pass Guarantee With Latest Demo [Q72-Q94]

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