What purpose does it serve for non-money market mutual funds to hold money market instruments?

• A.Money market instruments primarily generate investment income that provides investors with preferential tax treatment.
• B.If the portfolio manager has an immediate need for cash, money market instruments are relatively easy to liquidate.
• C.They are purchased by non-money market funds to satisfy the regulatory requirement of fund diversification.
• D.They ensure that the fair market value of a mutual fund will not drop below a minimal market value.

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Ellen and her only son Jeff live on the family farm with her father George. Jeff is five years old and Ellen has decided that it is time to start saving for Jeff's post-secondary education. She has called you to ask about registered education savings plans (RESPs).
Which of the following statements is TRUE?

• A.If Jeff qualifies for additional CESG. his CESG lifetime maximum increases to $10,000.
• B.If Jeff decides not to pursue a post-secondary education, he can keep all the CESG but it then becomes taxable.
• C.George may open an RESP for Jeff but it will not quality to receive Canada Savings Education Grants (CESGs).
• D.If Ellen receives the National Child Benefit Supplement (NCBS), Jeff may be eligible for the Canada Learning Bond

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Xerxes, 45 years old, is a successful architect, having an annual income of $185,000. He has around $10,000 in his non-registered account, which he is looking to invest in a tax-efficient manner.
From the following options, which would be the most tax-efficient?

• A.bond fund
• B.Canadian equity index fund
• C.asset allocation fund
• D.target date fund

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Which of the following statements regarding mutual fund fees is correct?

• A.Trading commissions are paid from the management fee.
• B.Redemptions are made from units held by investors to pay trailer fees.
• C.The mutual fund dealer receives trailer fees based on the value of assets under management.
• D.Trailer fees are only paid to mutual fund dealers when a purchase is made.

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Bernadette has a high-paying job and is in the top tax bracket. She recently received a payment of $5 million upon the settlement of her uncle's estate. Bernadette would like to invest her inheritance in financial products that would not only grow her money but is also income tax friendly.
Which of the following would provide the most favourable tax treatment?

• A.Dividends received from a large foreign corporation.
• B.Capital gains from a large Canadian corporation.
• C.Eligible dividends from a publicly-listed Canadian corporation
• D.Coupon payments from Government of Canada bonds.

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