CIFC Types of Investment Funds 5

Question 1

Which investment fund structure is regulated under the Insurance Companies Act rather than provincial securities legislation?

Accepted Answer

Segregated fund

Answer

Open-end mutual fund

Answer

Exchange-traded fund

Answer

Closed-end fund

Question 2

A global equity fund differs from an international equity fund primarily because:

Accepted Answer

A global fund can invest worldwide including Canada and the US, while an international fund typically excludes the investor's home country

Answer

A global fund holds only developed-market stocks, while an international fund holds only emerging markets

Answer

A global fund is denominated in US dollars while an international fund uses local currencies

Answer

A global fund is actively managed while an international fund must be passively managed

Question 3

An investor redeems mutual fund units before the fund's holding period expires and incurs a fee. This fee is called a:

Accepted Answer

Deferred sales charge (DSC) or redemption fee

Answer

Front-end load

Answer

Trailer fee

Answer

Management expense ratio

Question 4

What is the primary purpose of a 'fund facts' document under Canadian regulations?

Accepted Answer

To give investors a concise, plain-language summary of key facts about a mutual fund before purchase

Answer

To provide audited financial statements for the previous fiscal year

Answer

To outline the fund manager's compensation and bonus structure

Answer

To register the fund with the applicable provincial securities regulator

Question 5

Which of the following fund types is designed to profit in both rising AND falling markets?

Accepted Answer

Long/short hedge fund

Answer

Money market fund

Answer

Index fund

Answer

Government bond fund

Question 6

A mutual fund that invests at least 90% of its assets in a single foreign country is best classified as a:

Accepted Answer

Country or regional fund

Answer

Global equity fund

Answer

Balanced fund

Answer

Sector fund

Question 7

Under National Instrument 81-102, Canadian mutual funds are generally prohibited from:

Accepted Answer

Holding more than 10% of net assets in a single issuer's securities

Answer

Investing in government of Canada treasury bills

Answer

Distributing income to unitholders on a monthly basis

Answer

Charging a management fee disclosed in the Fund Facts