IFSE EXAM 16

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School

George Brown College Canada *

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Course

4502

Subject

Finance

Date

Apr 26, 2024

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pdf

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5

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4/22/24, 3:51 AM IFSE Institute Canadian Investment Funds Course - CIFC Exam Questions [2024] https://www.pass4test.com/CIFC-exam-questions.html 1/5 (/) (https://mylivechat.com/chatnoscript.aspx?HCCID=66608068) Cart (/cart.php) My Orders (/member.php?ac=myorder) Limited Time Discount Offer! 15% Off - Ends in 02:13:41 - Use Discount Coupon Code P4TCOM2024 IFSE Institute Canadian Investment Funds Course - CIFC Exam Questions QUESTION NO: 96 Which of the following statement about Exchange Traded Funds (ETFs) is TRUE? Hide answers/explanation Home (/) Products (/allproducts.php) Certifications (/certifications.php) Free Demo (/samples.php) Guarantee (/page_guarantee.html) How to pay? (/page_howtopay.html) F.A.Q (/page_faqs.html) A. Usually the market price of an ETF is the net asset value per unit (NAVPU) of the Fund on that day. B. Investors may sell their ETFs in the stock market or redeem them through the Fund at the NAVPU of the day. C. ETFs have lower MERs compared to mutual funds. D. All ETFs are actively managed. Chat now
4/22/24, 3:51 AM IFSE Institute Canadian Investment Funds Course - CIFC Exam Questions [2024] https://www.pass4test.com/CIFC-exam-questions.html 2/5 Correct Answer: C Explanation An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. ETFs have lower management expense ratios (MERs) compared to mutual funds because they are passively managed and do not incur high costs for research, analysis, and portfolio rebalancing. Therefore, this statement is true about ETFs. References: Exchange-Traded Fund (ETF) Explanation With Pros and Cons - Investopedia, The Best ETFs - Exchange Traded Funds Rankings | US News Investing QUESTION NO: 97 Which of the following statements regarding mutual fund fees is correct? Hide answers/explanation Correct Answer: C Explanation Trailer fees are ongoing fees that are paid by mutual fund managers to mutual fund dealers for providing ongoing services to their clients who hold units of their funds. Trailer fees are calculated as a percentage of the value of assets under management (AUM) of the clients who hold units of the fund. Trailer fees are paid out of the management fee that is charged by the mutual fund manager to cover the costs of operating and administering the fund. Therefore, option C is correct regarding mutual fund fees. The other options are incorrect. Option A is false because redemptions are not made from units held by investors to pay trailer fees; rather, trailer fees are paid out of the management fee that is deducted from the net asset value (NAV) of the fund. Option B is false because trailer fees are not only paid to mutual fund dealers when a purchase is made; rather, trailer fees are paid on an ongoing basis as long as the clients hold units of the fund. Option D is false because trading commissions are not paid from the management fee; rather, trading commissions are paid from the trading expense ratio (TER) that reflects the costs of buying and selling securities within the fund. A. Redemptions are made from units held by investors to pay trailer fees. B. Trailer fees are only paid to mutual fund dealers when a purchase is made. C. The mutual fund dealer receives trailer fees based on the value of assets under management. D. Trading commissions are paid from the management fee. Chat now
4/22/24, 3:51 AM IFSE Institute Canadian Investment Funds Course - CIFC Exam Questions [2024] https://www.pass4test.com/CIFC-exam-questions.html 3/5 References: [Mutual Fund Fees Explained | Wealthsimple], [Mutual Fund Fees | GetSmarterAboutMoney.ca], [Understanding Mutual Fund Fees | Investopedia] QUESTION NO: 98 Iliana owns 1,000 participating preferred shares in the First Canadian Bank. Which of the following features are characteristic of her investment? Hide answers/explanation Correct Answer: D Explanation Participating preferred shares are a type of preferred shares that give the holder a right to share in the issuer's net profits over and above the specified dividend rate. This means that participating preferred shareholders may receive additional dividends if the issuer performs well. Iliana owns participating preferred shares in the First Canadian Bank, which means she has a right to share in the bank's net profits over and above the specified dividend rate. References: Investment Funds in Canada (IFC) | Canadian Securities Institute QUESTION NO: 99 Which statement about unused registered retirement savings plan (RRSP) contribution room is CORRECT? A. Iliana has the right to purchase more preferred shares in the company before common shareholders. B. Iliana is able to vote at the annual general meeting and elect members of the board of directors. C. Iliana can convert her preferred shares to common shares at a fixed price and within a specified time period. D. Iliana has a right to share in the bank's net profits over and above the specified dividend rate. A. It may not be more than the RRSP contribution limit for the year in which it is carried forward. B. It can be carried forward to future years. C. It can be carried forward a maximum of seven years. Chat now
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