IFC Cheat Sheet 2026

The 30 highest-yield IFC facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which of the following is a key regulatory requirement for mutual fund dealers in Canada under MFDA rules? → Suitability assessment must be conducted before recommending any mutual fund
2. What response would a loss-averse investor be most likely to choose in selecting a preferred investment return scenario? → A 25% chance of gaining $2,000, and a 75% chance of losing nothing.
3. Which investment strategy seeks to profit from pricing discrepancies between a convertible bond and the underlying equity? → Convertible arbitrage
4. Following regulatory changes implemented in May 2024, what is the standard settlement cycle for most equity and long-term debt transactions in Canada? → T+1 (Trade date plus one business day)
5. Under the 'no-load' purchase option, how does a fund dealer typically earn compensation? → By collecting trailer fees paid by the fund company from the MER
6. A fund's maximum drawdown is −32%. This metric measures: → The largest peak-to-trough decline during a specific period
7. Which order type guarantees execution but not price when trading an ETF? → Market order
8. The 'style drift' problem in mutual fund performance analysis refers to: → A fund's investment style diverging from its stated mandate or benchmark
9. Which scenario represents a duration mismatch risk for a bond fund manager? → Funding long-duration bond purchases with short-term liabilities that reprice frequently
10. What distinguishes a clone fund from a standard mutual fund? → It mirrors the performance of a foreign fund using derivatives
11. Which economic theory argues that markets naturally self-correct and government intervention in the economy is generally unnecessary? → Classical economics
12. A mutual fund's performance report indicates that it is ranked in the 1st quartile for the past five years. What does this ranking signify? → The fund performed better than at least 75% of its peer group.
13. Which type of investor would benefit MOST from the potential creditor protection offered by segregated funds? → A self-employed professional or business owner with personal liability exposure
14. A mutual fund salesperson receives a gift from a fund company worth $300. Under MFDA rules, this situation: → Must be disclosed to the dealer and may require approval
15. Which regulatory body primarily oversees segregated funds in Canada? → Provincial insurance regulators
16. Which of the following is NOT a primary objective of the Know Your Client (KYC) process? → To guarantee the client will achieve their financial goals.
17. Which of the following scenarios best illustrates the 'crowding out' effect in economics? → Increased government borrowing raises interest rates, reducing private sector investment
18. What is the typical minimum holding period required before a segregated fund's maturity guarantee applies? → 10 years
19. A client opens a joint account with their spouse. Whose KYC information must be collected? → Both account holders
20. Which of the following is NOT a registered retirement savings vehicle in Canada? → RESP
21. What is the primary tax advantage of contributing to an RRSP? → Contributions generate a deduction reducing current taxable income
22. An investment fund holds bonds from a corporation that subsequently declares bankruptcy. Which type of risk has materialized? → Credit risk
23. When a client's time horizon shortens from 20 years to 5 years, how should their portfolio typically be adjusted? → Shift toward more fixed-income and less volatile assets
24. What is the age by which an RRSP must be converted or collapsed? → Age 71
25. Under NI 81-102, which regulatory change in 2019 allowed retail investors in Canada to access hedge-fund-like strategies through conventional mutual funds? → Creation of the alternative mutual fund category
26. How does naming a beneficiary directly on a segregated fund benefit the contract holder's estate plan? → It allows death proceeds to bypass the estate, potentially avoiding probate fees
27. Which newspaper article would be likely to result in foreign capital moving out of a country? → New Taxes on Foreign Direct Investment
28. If the Consumer Price Index (CPI) was 140.6 last year and 146.9 this year, what was the inflation rate over the year? → 4.48%
29. An 'arbitrage-free' price for an ETF means that: → The ETF's market price equals the NAV of its underlying basket of securities
30. Which of the following describes the tax treatment of dividends received from Canadian corporations in a non-registered account? → Eligible for the dividend tax credit