IFSE Test Questions & Answers
To whom are you permitted to make an unsolicited telephone call to market new products ("cold-call")
if they have signed up on the National Do Not Call List (DNCL)? - ANS - someone with wh
...
IFSE Test Questions & Answers
To whom are you permitted to make an unsolicited telephone call to market new products ("cold-call")
if they have signed up on the National Do Not Call List (DNCL)? - ANS - someone with whom you
already have a business relationship
Which of the following statements about Mutual Fund Dealers Association of Canada (MFDA) is
CORRECT? - ANS - It is a self-regulatory organization for the distribution side of the Canadian mutual
funds industry
What is the role of the Ombudsman for Banking and Investments (OBSI)? - ANS - OBSI helps resolve
disputes between participating banking services and investment firms and their clients
Jeff Thomson is a newly licensed dealing representative. He has received a cash deposit of $12,000 and
would like you to guide him as to whether he is required to report the transaction to the Financial
Transactions and Reports Analysis Centre of Canada (FINTRAC). What is the minimum dollar amount
of a cash deposit that Jeff is required to report to FINTRAC? - ANS - $10,000
Which of the following dealing representatives is in a conflict of interest situation? - ANS - Jonathan,
who recommends mutual funds to his clients based on which funds pay the highest commission.
Which of the following statements regarding ethical conduct is true? - ANS - Ethical conduct means
conforming to approved standards.
The Mutual Fund Dealers Association of Canada (MFDA) has several rules dealing with different
aspects of the mutual fund business. Conduct Rule 2 offers details on how both you and your employer
are to carry out business. Which of the following is covered in Rule 2? - ANS - standard of conduct for
ethical behaviour
Josephine is a newly registered dealing representative. Which of the following actions constitute proper
conduct expected of her? - ANS - Protecting the confidentiality of client information.
Which statement about the registration process is TRUE? - ANS - Objections to your registration may
be due to unacceptable past employment history in the securities industry.
Which of the following statements is TRUE? - ANS - All unethical actions are breaches of the standard
of conduct.
Under Mutual Fund Dealers Association of Canada (MFDA) Rules you have the duty to disclose which
of the following? - ANS - outside business activities
Sarah, a mutual fund dealing representative, was reviewing the features and characteristics of an
emerging markets mutual fund that she was considering for a client. Based on her client's objectives and
risk profile, Sarah thought it would be a suitable investment. If Sarah makes the following statements, in
which instance would she be following best practices as a mutual funds dealing representative? - ANS -
"The prospectus indicates that this is a speculative fund that is suitable for investors with a growth
objective and a high risk tolerance."
Today is Sheldon's first day as a dealing representative. He is in the process of opening an account for
his client. He is not sure of how to furnish the relationship disclosures to his first client. How should
Sheldon provide the relationship disclosures required under the Client Relationship Model (CRM)? -
ANS - Disclosures should be provided in writing to the client on the account opening form or on a
separate form.
Your clients , Ravi and Nuzah Patel, both 30 years of age, recently married. Ravi earns an annual salary
of $55,000 as an X-ray technician. Nuzah earns $72,000 per year as a pharmacist. They are currently
viewing houses in the $200,000-to-$225,000 price range and hope to purchase a house within the next
year. They plan to use their wedding gifts of cash totalling $12,000 as a down payment. What is the
Patels' investment objective for the $12,000 in cash? - ANS - capital preservation
Diego, a mutual fund dealing representative, is reviewing his notes from a recent client meeting. His
client, Linda, wants to retire next year with an annual pre-tax income of $50,000. However, she does not
have the financial resources necessary to do so. Before his next meeting with Linda, Diego prepares
several scenarios for her to review. The first scenario requires Linda to delay her retirement for another
five years. The second scenario requires Linda to accept a pre-tax income of $45,000 per year. The third
scenario requires Linda to take greater investment risk with her portfolio. Diego will discuss these
scenarios with Linda to determine which one is appropriate. Where are Diego and Linda in the strategic
investment planning process? - ANS - clarify client status, problems and opportunities
Which of the following statements regarding the suitability process is true? - ANS - Suitability is a
cyclical multi-step process.
One of your clients, Rahman, is a retired senior citizen with a conservative portfolio of around $750,000.
He is always on the lookout for investments that can offer him a better yield to supplement his income.
In his quest for a higher yield, he comes to your office and asks you to liquidate half of his portfolio and
invest the proceeds in a start-up mining company. The proposed trade is entirely unsuitable based on
Rahman's know your client (KYC) information. What is the most appropriate action you should take? -
ANS - Clear the transaction with your Compliance
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