One of your clients, Fernando, is approaching 71 years of age and has a few questions regarding life income funds (LIFs).
Which of the following statements about LIFs is TRUE?

• A.Fernando may make contributions to his LIF if he continues working.
• B.Fernando is free to withdraw any amount from his LIF above the minimum amount.
• C.Fernando can transfer money from his registered retirement savings plan (RRSP) to a LIF.
• D.Fernando can transfer money from his locked-in retirement account (LIRA) to a LIF.

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Maxine is a portfolio manager who 15 years ago, purchased 100 shares of Never2Tacky, a social media corporation for Aspirations Global Technology Fund. She purchased the stock when it was trading at $10. Last year, the peak market price was $120. Presently, it is trading at $99. News agencies are now reporting that additional regulations regarding social media companies are about to be agreed upon by G7 countries. Maxine is concerned the market value of Never2Tacky is going to drop. She buys a put option with an exercise price of $95 with an expiry of 9 months.
What type of strategy is Maxine using?

• A.Speculating
• B.Modern portfolio theory
• C.Hedging
• D.Passively managing

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Which of the following statements about registered education savings plans (RESPs) is CORRECT?

• A.Contributions to RESPs are tax deductible.
• B.There is a yearly contribution limit per beneficiary.
• C.RESPs must be collapsed by the end of the 31st year of its starting date
• D.Contributed funds grow tax-free within the plan.

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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?

• A.$1-188.00
• B.$1,200.00
• C.$1, 12.12
• D.$1,320.00

Correct Answer: C

Explanation
To convert the proceeds from USD to CAD, Frederic needs to divide the amount in USD by the exchange rate.
The exchange rate is $1 CAD for $0.99 USD, which means that $0.99 USD is equivalent to $1 CAD.
Therefore, Frederic will receive

CAD in Canadian dollars. References: Canadian Investment Funds Course (CIFC) | IFSE Institute, Unit 8, Lesson 2

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Quinton, a Dealing Representative, meets with his client Banji. Banji's Know Your Client (KYC) indicates that her risk profile is "medium''. Banji currently has $35,000 in her account which is invested 50% in the Middleton Balanced Fund and 50% in the Hector Growth Fund. She tells Quinton that she would like to contribute an additional $10,000 to purchase the Prospect Labour-Sponsored Fund. Which of the following statements about Banji's proposed transaction is CORRECT?

• A.Quinton must provide Banji with full disclosure about the risks so that he can proceed with the purchase of the Prospect Labour-Sponsored Fund.
• B.Quinton should update Banji's risk profile to "high" so that he can proceed with the purchase of the Prospect Labour-Sponsored Fund.
• C.Quinton should not proceed with the purchase of the Prospect Labour-Sponsored Fund because it is not suitable for Banji based on her current KYC.
• D.Quinton can proceed with the purchase of the Prospect Labour-Sponsored Fund because it is suitable for Banji based on her current KYC.

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