New Actualtests4sure CIFC Exam Questions Real CIFC Dumps Updated on Feb 09, 2024 [Q75-Q92]

QUESTION 75
Xian-Li believes she is a sophisticated investor. She has constructed her own portfolio and has had some success. She does not believe in studying a company’s details such as earnings, expenses, or assets. She is more concerned with patterns in a company’s stock price over time. She believes patterns form and can be used to predict future movements in the market.
How does Xian-Li evaluate the companies in her portfolio?

fundamental analysis

flowchart analysis

technical analysis

value analysis

QUESTION 76
What information does Fund Facts provide to potential investors?

What the mutual fund is currently investing in.

How to calculate the taxes owed from investment income.

The portfolio management strategy that is used.

The remuneration paid to the Independent Review Committee.

QUESTION 77
Pierre buys a call option on a stock. What is the implication of this transaction?

Pierre has the right to buy the stock if he exercises the option.

Pierre is obligated to sell the stock if the option is exercised.

Pierre has the right to sell the stock if he exercises the option.

Pierre is obligated to buy the stock if the option is exercised.

QUESTION 78
Louis is the portfolio manager for Quattro Fund. The mandate of the mutual fund is to invest in a combination of cash, fixed income, and equity securities; however, Louis has the ability to adjust the portfolio according to market conditions. If Louis feels that interest rates will fall, he could invest the whole portfolio in equities. If he feels the market is too high, he could take profits and sit totally in cash. What type of mutual fund is Quattro Fund?

Canadian equity fund

balanced fund

commodity pool

asset allocation fund

QUESTION 79
Justin and Yvonne both open a Registered Education Savings Plan (RESP) for their daughter Grace. They plan to regularly contribute $1,000 per year until Grace reaches the age of 17.
Which of the following statements relating to RESP is CORRECT?

Justin and Yvonne may contribute a combined lifetime maximum of $50,000 for Grace.

RESPs are attractive to Justin and Yvonne because they are tax-free investment plans.

There is an annual contribution limit of $2,500 that Justin and Yvonne can contribute to an RESP.

Contributions made by Justin and Yvonne are eligible for a tax deduction in the year they are contributed.

QUESTION 80
Eleanora receives a $500 eligible Canadian dividend from her mutual fund. Her federal marginal tax rate for the year is 29%. Assuming the enhanced gross-up of 38% and a federal dividend tax credit of 15.02%, how much federal tax will she pay on her dividend?

$69.90

$189.16

$96.46

$115.40

QUESTION 81
Evan owns retractable preferred shares of Ingram Corp. Which statement CORRECTLY describes a key feature of Evan’s shares?

Gives Evan the option to convert the Ingram Corp preferred shares into a fixed number of common shares at a predetermined price within a specified period.

Offers Evan the opportunity to receive additional dividends if Ingram Corp’s profit exceeds a stated level.

Entitles Evan to sell the shares back to Ingram Corp at a pre-determined price and time in the future.

Allows Ingram Corp to buy back the preferred shares at a pre-determined price within a defined period.

QUESTION 82
During the calendar year, Firmansyah received a $1,800 eligible dividend from a large Canadian bank and a foreign, dividend from his The USD/CAD exchange rates is 1.3605.
Firmansyah’s federal marginal tax bracket is 29%. The enhanced dividend gross-up rate is 38% and the federal dividend tax credit rate for eligible dividends is 15%.
What federal tax liability will be due from the investment income?

$522.00

$348.00

$695.76

$870.00

Explanation
To calculate Firmansyah’s federal tax liability from the investment income, we need to follow these steps:
Step 1: Convert the foreign dividend from USD to CAD using the exchange rate given in the question.
The exchange rate is 1.3605 CAD per USD, which means that 1 USD is equivalent to 1.3605 CAD.
Therefore, Firmansyah’s foreign dividend in CAD is:
500×1.3605=680.25
Step 2: Calculate Firmansyah’s grossed-up dividend income from both sources. A grossed-up dividend income is the actual dividend received plus a percentage of the dividend that reflects the corporate tax paid by the issuer. The percentage varies depending on whether the dividend is eligible or non-eligible.
According to [this site], an eligible dividend is a dividend paid by a Canadian corporation that meets certain criteria, such as being listed on a designated stock exchange or being a subsidiary of such a corporation. A non-eligible dividend is a dividend that does not meet these criteria, such as a dividend paid by a foreign corporation or a small Canadian business corporation. The gross-up rate for eligible dividends in 2020 was 38%, while the gross-up rate for non-eligible dividends in 2020 was 15%.
Therefore, Firmansyah’s grossed-up dividend income from both sources is:
(1800+680.25)×(1+0.38)=3426.35
Step 3: Apply Firmansyah’s federal marginal tax rate to his grossed-up dividend income to get his federal tax before credits. A marginal tax rate is the percentage of tax applied to an additional dollar of income. According to [this site], Firmansyah’s federal marginal tax rate for 2020 was 29%, as his taxable income was between $150,473 and $214,368. Therefore, Firmansyah’s federal tax before credits is:
0.29×3426.35=993.64
Step 4: Subtract Firmansyah’s federal dividend tax credit from his federal tax before credits to get his net federal tax liability from the investment income. A dividend tax credit is a percentage of the grossed-up dividend income that reflects the corporate tax paid by the issuer and avoids double taxation.
The percentage varies depending on whether the dividend is eligible or non-eligible. According to [this site], the federal dividend tax credit rate for eligible dividends in 2020 was 15%, while the federal dividend tax credit rate for non-eligible dividends in 2020 was 9.03%. Therefore, Firmansyah’s federal dividend tax credit from both sources is:
(1800+680.25)×0.38×0.15=297.88
Step 5: Subtract Firmansyah’s federal dividend tax credit from his federal tax before credits to get his net federal tax liability from the investment income. This is the amount of federal income tax that Firmansyah has to pay or has overpaid from the investment income. Therefore, Firmansyah’s net federal tax liability from the investment income is:
993.64297.88=695.76
Hence, option C is correct. References: [Canadian Investment Funds Course (CIFC) | IFSE Institute],
[Dividend Tax Credit | TurboTax Canada Tips], [Federal Income Tax Rates for Canada – TurboTax Canada Tips], [Eligible Dividends | TurboTax Canada Tips]

QUESTION 83
Which of the following individuals would qualify for a full or partial Old Age Security (OAS) pension?

Lenny, who is 65 years old and was born and raised in Canada, but lived in Jamaica from ages 25 to 65.

Marcus, who is 60 years old, a Canadian citizen, and has lived in Canada for 20 years.

Katrina, who is 75 years old and just immigrated to Canada from the U.S. last month.

Donald, who is 65 years old and has lived in Canada since his birth but worked in Australia for the past
10 years.

QUESTION 84
Jabir begins the registration process with his new dealer Prosper Wealth Inc. Jabir is excited about his new career and eager to start calling clients, opening new accounts, and selling investments. Which of the following CORRECTLY describes when Jabir will be eligible to open new client accounts and sell investments?

Upon employment with the dealer

Upon registration application by the dealer

Upon passing the proficiency course

Upon formal confirmation from the regulator

QUESTION 85
What type of shares offer its shareholders the opportunity to receive additional dividends if the company’s profit exceeds a stated level?

Redeemable preferred shares

Cumulative preferred shares

Convertible preferred shares

Participating preferred shares

QUESTION 86
Winter is a Dealing Representative with Top Tier Investing, a mutual fund dealer and member of the Mutual Fund Dealers Association of Canada (MFDA). Which of the following statements about Winter’s suitability obligation is CORRECT?
Winter is required to make a suitability determination every time:
i) she makes a recommendation to a client
ii) a client’s investment returns decline.
iii) she opens a new client account
iv) the markets fluctuate.

i and ii

i and iii

ii and iii

iii and iv

QUESTION 87
Your client Gerard is 30 years old and plans to retire at age 65. He has a mutual fund portfolio of $40,000 in which he invests $1,500 monthly. Gerard’s objective is to use these funds to meet the 20% down payment requirement to buy a house for $650,000.
What is Gerard’s investment time horizon not considering market fluctuations?

5 years

15 years

25 years

35 years

QUESTION 88
Loretta is looking for a well diversified equity fund. Her ideal mutual fund would hold investments within and outside Canada. Although she is seeking growth, Loretta also wants a mutual fund that invests in quality companies.
Which of the following mutual funds would be the best choice for Loretta?

Dominion International Growth Fund – this international equity fund invests in small and medium sized companies in countries all around the world.

Polar Global Blue Chip Equity Fund – this global equity fund invests in large, established companies in mostly stable and mature foreign markets.

Lennox Energy Fund – this sector fund invests primarily in Canadian oil and gas companies that sell both to domestic and foreign markets.

Auric Precious Metals Fund – this sector fund invests in Canadian companies that participate in the precious metals sector such as owning mines in foreign countries.

QUESTION 89
Frederic recently sold his units in a US dollar (USD) denominated mutual fund. He wants to convert the proceeds back to Canadian dollars (CAD). If he received proceeds of $1,200 USD from the sale and the exchange rate is $1 CAD for $0.99 USD, how much will Frederic receive in Canadian dollars?

$1-188.00

$1,200.00

$1, 12.12

$1,320.00

QUESTION 90
One of your clients, Harry, has heard that he can defer paying tax on capital gains. He wants to know if what he has heard is correct and if so, how to defer paying taxes on capital gains.
What would you tell Harry?

He should hold profitable investments as long as possible.

He should invest in mutual funds just before the dividend paying date to pick up the dividend.

Harry should buy and sell investments actively.

He should hold unprofitable investments as long as possible.

QUESTION 91
Which of the following statements about capital gains distributions from mutual fund trusts is correct?

Capital gains from mutual fund distributions are 100% taxable.

Capital gains distributions are not a disposition and are therefore not taxable.

Capital gains from mutual fund trusts are deferred until the investor exits the mutual fund.

Capital gains distributions from a mutual fund trust are reported annually on a T3.

QUESTION 92
One of your clients, Sheldon, is 65 years old. He has $30,000 to invest. He has a low risk profile, and an investment objective of receiving regular income. He has a time horizon of 5 years.
Based on Sheldon’s risk profile and investment objective, which of the following investment recommendations is MOST appropriate for Sheldon?

ABC common shares which had a 20% annual yield during the previous 5 years.

3% Government of Canada Bonds at par, which have a maturity that coincides with Sheldon’s time horizon.

FEG Labour-Sponsored Fund which will give him a tax benefit.

Debentures of XYZ Corporation will give Sheldon a regular income and an attractive yield.