Question 1

A client has $950,000 in his RRSP account and $550,000 in his non-registered account held in nominee name with Tradewell Mutual Funds.

In the event of his dealer, Tradewell Mutual Funds declaring insolvency, what is the total amount the client be eligible to receive from the Mutual Fund Dealers Association of Canada Investor Protection Corporation (IPC)?

AThe client will not be eligible for any coverage.

BThe client will be eligible for coverage of $950,000.

CThe client will be eligible for coverage of $1,500.000.

DThe client will be eligible for coverage of $550,000.

Answer : B

Question 2

Your clients, Philip and Helen, have a disabled son, Alex, age 22. They want to set up a registered disability savings plan (RDSP) for Alex and have asked you for some information.

Which statement is TRUE?

APhilip and Helen's contributions are refundable to them.

BThere is no annual or lifetime maximum limit on contributions.

CAlex must quality for the disability tax credit.

DPhilip and Helen's contributions are tax-deductible.

Answer : C

Question 3

Iliana owns 1,000 participating preferred shares in the First Canadian Bank. Which of the following features are characteristic of her investment?

AIliana has the right to purchase more preferred shares in the company before common shareholders.

BIliana is able to vote at the annual general meeting and elect members of the board of directors.

CIliana can convert her preferred shares to common shares at a fixed price and within a specified time period.

DIliana has a right to share in the bank's net profits over and above the specified dividend rate.

Answer : D

Question 4

Which of the following is a characteristic of a bond fund?

AIncome from a bond fund will primarily be interest but may also be capital gains

BBond funds are very low risk because they never go down in value.

CIf interest rates rise the value of a bond fund will also tend to rise.

DSecurities regulation specifies that bond funds must invest in investment grade bonds.

Answer : A

Question 5

Sandra presently participates in her employer-sponsored defined contribution pension plan (DCPP). As contributions continue to be made into her plan, what can she expect?

ARetirement benefits will be based on a prescribed formula that can be referenced from the plan's terms and conditions.

BThe employer will solely make contributions to her DCPP based on a prescribed formula noted within her plan.

CHer available registered retirement savings plan (RRSP) contribution room will be reduced by what is being contributed to her plan.

DTo ensure she has savings at retirement, the employer will choose stable investments to grow her retirement savings.