Free Practice Questions for CSI IFC Exam

An RRIF (Registered Retirement Income Fund) requires annual minimum withdrawals starting the year after it is established.

It can be either self-directed or managed.

The RRSP must be converted to an RRIF or annuity by the end of the year the holder turns 71; the RRIF itself is not terminated at that age.

Withdrawals are based on the age of the annuitant or spouse.

Thus, the key requirement is minimum annual withdrawals.

When an investor purchases a mutual fund, the price is based on the next NAVPS (Net Asset Value Per Share) calculated after the order is entered. Orders placed before 4:00 p.m. ET are priced at that day’s closing NAV; orders after 4:00 p.m. are priced using the next business day’s NAV.

Since the order was placed at 2:30 p.m. ET, today’s NAV applies.

The portfolio shown is heavily concentrated in Canadian equities, across growth, index, resources, and value funds. Since all investments are in equities, the primary risk is market risk (systematic risk), meaning the portfolio’s value will fluctuate with overall stock market conditions.

Counterparty risk relates to derivative or trading partners.

Interest rate risk is most relevant to fixed-income securities.

Foreign exchange risk applies to foreign investments.

Thus, the correct answer is Market risk.

The Strategic Investment Planning (SIP) process is a four-step process that helps advisors to create and deliver customized investment plans for their clients. The four steps are:

Clarify Client Status, Problems and Opportunities: This step involves gathering information about the client’s personal and financial situation, goals, risk tolerance, and investment knowledge. The advisor also identifies the client’s problems and opportunities, such as tax issues, estate planning needs, or market trends.

Identify Strategies and Present the Plan: This step involves analyzing the information collected in the previous step and developing strategies to address the client’s problems and opportunities. The advisor also presents the plan to the client, explaining the rationale, benefits, costs, and risks of the proposed strategies. This is the stage where Sonya mentions factors such as inflation, interest rates, and rates of return, as they are relevant to the investment approaches she is offering to Elijah.

Implement the Plan: This step involves executing the agreed-upon strategies with the client’s consent. The advisor also ensures that the necessary documentation and transactions are completed.

Monitor and Update: This step involves reviewing the performance of the plan and making adjustments as needed. The advisor also communicates with the client regularly and updates the plan according to any changes in the client’s situation or goals.

Canadian Investment Funds Course (CIFC) Study Guide, Chapter 2: The Sales Process, Section 2.3: The Strategic Investment Planning (SIP) Process, page 2-81

Strategic Investment Planning Process - IFSE Institute2

A defining characteristic of mutual funds is that each investor owns a proportional interest in the fund’s portfolio. The Investment Funds in Canada text explains that mutual funds pool investor money to purchase a diversified portfolio of securities, and each unitholder owns a fractional interest based on the number of units they hold.

Options B and C are incorrect because mutual funds are not restricted to specific companies and are widely available to retail investors. Option D is incorrect because mutual fund units are typically sold in fractional amounts, allowing precise dollar investing.

This ownership structure allows investors to benefit proportionally from income, capital gains, and losses generated by the portfolio. Therefore, Option A is the correct and fully CIFC-aligned answer.

Mutual fund activities in Canada are regulated by administrative bodies, specifically provincial and territorial securities regulators, acting collectively through the Canadian Securities Administrators (CSA). The Investment Funds in Canada course explains that securities regulation in Canada is not federal, but rather administered at the provincial and territorial level through securities commissions such as the Ontario Securities Commission (OSC) and the Autorité des marchés financiers (AMF) in Québec.

These administrative bodies create, administer, and enforce securities legislation, including rules governing mutual fund distribution, disclosure, registration, and conduct. National Instruments such as NI 81-102 (Mutual Funds) and NI 31-103 (Registration Requirements) are developed through the CSA and enforced by these regulators.

The federal government does not directly regulate mutual funds. Transfer agents perform record-keeping functions only, and stock exchanges regulate listed securities, not mutual fund operations. The CIFC curriculum clearly emphasizes that securities regulation is carried out by administrative authorities, not political or commercial bodies.

Therefore, Option B is the correct and fully CIFC-verified answer.

The Annual Information Form (AIF) is a document that provides detailed information about a mutual fund, such as its history, structure, management, fees, expenses, risks, policies, and performance. The AIF also contains information regarding the Independent Review Committee (IRC) compensation, which is the amount of fees and expenses paid by the fund to the IRC members for their services. The IRC is a committee of independent individuals who oversee the fund manager’s decisions on conflict of interest matters and act in the best interests of the fund and its investors12

References = web search results from search_web(query="Independent Review Committee compensation")12 and Canadian Investment Funds Course (CIFC) - Module 2: Investment Products - Section 2.2: Mutual Funds3

3: https://www.ifse.ca/wp-content/uploads/2021/08/CIFC-Module-2.pdf