IFC Study Guide 2026

Because segregated funds are insurance products, representatives must be licensed to sell life insurance under provincial insurance legislation, not a securities license.

The top of the cycle is called a peak. A peak is characterized by the following activities: demand begins to outstrip the capacity of the economy to supply it; wages increase; inflation rises; interest rates rise and bond prices fall; sales begin to decline; business investment slows, and stock market activity begins to decline.

The primary objective of the Bank of Canada's monetary policy is to promote the economic and financial well-being of Canadians by keeping inflation low, stable, and predictable. The target is to keep inflation around the 2 percent midpoint of a 1 to 3 percent range. This fosters confidence and contributes to sustainable economic growth.

The '2 and 20' structure is the classic hedge fund compensation model. It consists of a 2% management fee charged annually on the assets under management (AUM) to cover operational costs, and a 20% performance or incentive fee on the profits generated by the fund, often above a certain threshold or high-water mark.

Partial withdrawals reduce the net premiums paid calculation, proportionally lowering the maturity guarantee since the guarantee is tied to net premiums (contributions minus withdrawals).

Alpha measures the value a fund manager adds or subtracts from a fund's return, independent of the market's movement. A significantly positive alpha indicates that the manager has generated returns in excess of what would be expected based on the fund's level of market risk (beta), suggesting superior performance from active management decisions like stock selection.