PIPEDA (Personal Information Protection and Electronic Documents Act) requires firms to obtain informed consent when collecting, using, or disclosing personal information. B (prohibit disclosure) is too absolute; exceptions exist (e.g., legal requirements). C (verify client ID) is under AML rules, not PIPEDA. D (must provide service if info refused) is incorrect; firms may deny services if info is not provided.
IFC Exam Question 82
Which statement about unused registered retirement savings plan (RRSP) contribution room is CORRECT?
Correct Answer: B
Unused RRSP contribution room is the amount of RRSP contributions that you did not deduct in previous years and are available to deduct in the current year. Unused RRSP contribution room can be carried forward to future years indefinitely, until you use it up or reach the age of 71. You can find your unused RRSP contribution room on your notice of assessment or by logging into your Canada Revenue Agency account. References: What to do with unused RRSP, PRPP or SPP contributions
IFC Exam Question 83
Which of the following individuals would qualify for a full or partial Old Age Security (OAS) pension?
Correct Answer: A
Lenny would qualify for a partial OAS pension, because he meets the following criteria: *He is 65 years old or older. *He is a Canadian citizen or a legal resident at the time of his OAS pension application. *He has resided in Canada for at least 10 years since the age of 18. The amount of his partial OAS pension would be proportional to the number of years he has lived in Canada after the age of 18, divided by 40. For example, if he has lived in Canada for 15 years, he would receive 15/40 or 37.5% of the full OAS pension1 References = web search results from search_web(query="Old Age Security pension eligibility")
IFC Exam Question 84
Which of the following statements is true when comparing fund of funds to traditional mutual funds?
Correct Answer: A
A fund of funds is a mutual fund that invests in other mutual funds. This means that there are two levels of management fees: one for the fund of funds itself and one for the underlying funds. Therefore, fund of funds have higher fees than traditional mutual funds that invest directly in securities.
IFC Exam Question 85
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?
Correct Answer: D
Beta is a measure of the systematic risk of an investment, which is the risk that is related to the movements of the market as a whole. Beta compares the volatility of an investment to the volatility of the market. A beta of 1 means that the investment has the same level of risk as the market, and it tends to move in the same direction and magnitude as the market. A beta of 0 means that the investment has no correlation with the market, and it is unaffected by market fluctuations. A beta greater than 1 means that the investment is more risky than the market, and it tends to amplify the market movements. A beta less than 1 means that the investment is less risky than the market, and it tends to dampen the market movements. Therefore, if an investor was looking for an investment with a risk equal to that of the market, she would want a beta of 1. References: Canadian Investment Funds Course (CIFC) Study Guide, Chapter 4: Mutual Funds, Section 4.5: Risk and Return of Mutual Funds, page 4-231 Beta Definition - Investopedia2