FREE IFC Investment Strategies Questions and Answers

Question 1

What is the purpose of the fund facts?

Accepted Answer

To provide clients with key fund information that is relevant to their investment decisions.

Answer

To better align the interests of the fund with the client.

Answer

To determine if a fiduciary duty is present in the representative-client relationship.

Answer

To clarify for clients the nature and terms of their relationship with the dealer of the fund.

Question 2

What term describes the range of possible future outcomes on the price of a security?

Accepted Answer

Risk

Answer

Beta

Answer

Return

Answer

Fluctuation

Question 3

A client has $100,000 in a savings account, $5,000 in a chequing account, and $10,000 in loans. Calculate his net worth.

Accepted Answer

$95,000

Answer

$115,000

Answer

$90,000

Answer

$105,000

Question 4

Which newspaper article would be likely to result in foreign capital moving out of a country?

Accepted Answer

New Taxes on Foreign Direct Investment

Answer

Corporate Taxes Reduced

Answer

Government Re-elected for a Fourth Consecutive Term.

Answer

International Ranking of Domestic Level of Education Rises Significantly

Question 5

Which example demonstrates direct use of capital savings?

Accepted Answer

Building a new factory

Answer

Depositing funds in a Canadian bank account.

Answer

Purchasing a company’s stocks

Answer

Purchasing an investment fund.

Question 6

Which of the following transactions takes place in the secondary market?

Accepted Answer

Resale of previously issued securities.

Answer

Sale of mutual funds

Answer

Issue of federal Treasury bills.

Answer

Issue of new debt and equity securities.

Question 7

Which exchange in Canada deals exclusively with financial and equity futures and options?

Accepted Answer

The Montreal Exchange

Answer

The TSX Venture Exchange

Answer

Canadian Securities Exchange

Answer

The Toronto Stock Exchange

Question 8

What term applies to unemployment created by a new technology that eliminates the need for subway train drivers?

Accepted Answer

Structural

Answer

Natural

Answer

Cyclical

Answer

Frictional

Question 9

The demand for blue widgets increases sharply due to a newspaper report that using blue widgets improves recovery from influenza. What can be said about the law of supply?

Accepted Answer

Price and production both increase

Answer

Price and production both decrease

Answer

Price increases and production decreases

Answer

Price decreases and production increases

Question 10

If the Consumer Price Index (CPI) was 140.6 last year and 146.9 this year, what was the inflation rate over the year?

Accepted Answer

4.48%

Answer

5.20%

Answer

4.12%

Answer

6.04%