Online Access Free IFC Exam Questions

A self-directed investor bases stock purchase decisions on internet recommendations and stock tips, believing this provides the most accurate information. What is the investor's behavioural bias?

• A.Overconfidence
• B.Representativeness
• C.Availability
• D.Endowment

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?

• A.retractable
• B.participating
• C.convertible
• D.redeemable

Which statement regarding Canada's income tax system is CORRECT?

• A.Tax credits will reduce an individual's taxable income and may lower that person's top marginal tax rate.
• B.Federal and provincial income tax brackets are both progressive and each respective jurisdiction determines the tax rates that will be used.
• C.Once a person's taxable income reaches the next income tax bracket level, all income is subject to be taxed at the higher tax rate.
• D.After federal and provincial tax rates have been applied to a person's taxable income, tax deductions are then applied to reduce taxes.

One of your clients, Harry, has heard that he can defer paying tax on capital gains. He wants to know if what he has heard is correct and if so, how to defer paying taxes on capital gains.
What would you tell Harry?

• A.He should invest in mutual funds just before the dividend paying date to pick up the dividend.
• B.He should hold unprofitable investments as long as possible.
• C.He should hold profitable investments as long as possible.
• D.Harry should buy and sell investments actively.

Lydia wants to transfer units of her Sussex Growth Fund to her registered retirement savings plan (RRSP) as her RRSP contribution. The current market value is $10,600 and the cost of the units is $4,500.
Which of the following statements is CORRECT?

• A.Lydia's RRSP contribution will be valued at $4,500.
• B.Lydia is only permitted to contribute cash to her RRSP not units of her mutual fund.
• C.Lydia will incur a capital gain of $4,500 from the contribution.
• D.Lydia's RRSP contribution will be valued at $10,600.