Greg, one of your clients, has been advised by a friend to invest in open-end mutual funds. He is not sure about the differences between open and closed-end funds.
What would you tell Greg about open-end funds?

• A.The number of units is not fixed, and varies with investor demand and redemption orders.
• B.Investors holding open-end funds can buy and sell their mutual funds anytime the stock market is open.
• C.Units are bought and sold amongst the unitholders.
• D.Initial shares in the mutual fund are allotted through an initial public offering (IPO)

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Which of the following best describes how a target date fund works?

• A.Through the years, the asset allocation shifts from equities towards fixed income as the maturity date approaches.
• B.Through the years, the asset allocation shifts from fixed income towards equities as the maturity date approaches.
• C.The mutual fund is constantly rebalanced to maintain an even split between equities and fixed income through the life of the mutual fund.
• D.In exchange for a lump-sum purchase the unitholder receives guaranteed monthly payments for life.

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Which of the following form part of the disclosure documents relating to mutual funds?

• A.balance sheet, income and cash flow statements of the portfolio management company
• B.statement of net assets, annual information form, management reports of fund performance
• C.annual proxy voting record, audited financial statements, and proof of registration
• D.new account information form, quarterly financial statements, and security certification

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Sylvia decided to use the savings from her bank account to purchase a 5-year bond. The face value of the bond is $10,000, the market price is $9,230 and the coupon rate is 7%.
What is the current yield on the bond? Round to 2 decimal places.

• A.7.00%
• B.7.25%
• C.7.58%
• D.7.75%

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Lydia wants to transfer units of her Sussex Growth Fund to her registered retirement savings plan (RRSP) as her RRSP contribution. The current market value is $10,600 and the cost of the units is $4,500.
Which of the following statements is CORRECT?

• A.Lydia is only permitted to contribute cash to her RRSP not units of her mutual fund.
• B.Lydia's RRSP contribution will be valued at $4,500.
• C.Lydia's RRSP contribution will be valued at $10,600.
• D.Lydia will incur a capital gain of $4,500 from the contribution.

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