QUESTION 239
Charlotte has received proceeds from a deceased family member’s estate. Charlotte decides to visit Malik, who’s a Dealing Representative at her bank. She tells Malik, she does not know much about trading ETFs, but she wants to invest in ETFs. Charlotte says she feels fortunate to have this money and that she’s not worried about losing it because she never planned on having any of it.
What element of the Know Your Client (KYC) information has Malik been able to learn?

QUESTION 240
What personal information must be obtained from clients opening a non-registered account?
* Date of birth
* Social insurance number
* Permanent address
* Full legal name

QUESTION 241
If a Canadian investor was purchasing an international equity fund, in which countries would the fund potentially be invested?

QUESTION 242
What allocation strategy does an investment advisor apply when adjusting risk and return levels according to behavioural tendencies?

QUESTION 243
Pierre buys a call option on a stock. What is the implication of this transaction?

QUESTION 244
In what decade did the chartered banks make an aggressive entry into the mutual fund market?

QUESTION 245
What does a Sharpe ratio of 1 indicate?

QUESTION 246
The demand for blue widgets increases sharply due to a newspaper report that using blue widgets improves recovery from influenza. What can be said about the law of supply?

QUESTION 247
Irina Pluskova is a financial advisor for a multi-national firm. She is a well-known personality within the local community for her philanthropic work with children’s charities. What must Irina do to uphold the Standards of Conduct?

QUESTION 248
Zofia has held units of the ABC Monthly Income fund for many years and has reinvested all distributions by purchasing additional units. During this period, she received $2,500 in reinvested dividends. She originally purchased $10,000 of fund units, and after several years, the portfolio value rose to $15,000. What is the tax consequence if Zofia decides to sell her units?

QUESTION 249
Thomas, a resident of Ontario, is a full-time university student. He does food delivery to supplement his income. During the school year, he works on weekends and works full-time during his summer break.
Thomas’ pensionable earnings were $16,000 for the year. How much must Thomas contribute to CPP when CPP contribution rate is 5.95%?

QUESTION 250
BUG Inc. has a beta of 1.65. If the market drops by 18.48% over the next 12 months, by approximately how much could BUG Inc. shares fall over that time period?

QUESTION 251
A mutual fund sales representative is under pressure to meet certain sales objectives. However, he consistently ignores these quotas when making client recommendations. Which standard of conduct has he followed?

QUESTION 252
What is the step in the financial planning process that includes a discussion of a client’s household budget?

QUESTION 253
Grant is a Dealing Representative with WealthPlus Securities Inc. Grant becomes a volunteer member of his local arena’s Hockey Association and is appointed as the Association’s new Treasurer. Which of the following statements about Grant’s appointment as Treasurer is CORRECT?

QUESTION 254
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?

QUESTION 255
What is the level of risk associated with a mortgage fund compared to other types of funds?

QUESTION 256
Stanley, an investor, has the following four funds in his portfolio:
Fund – Strategy
MNO – High-yield bond
PQR – Canadian equities
STU – U.S. large-cap equities
VWX – International small-cap equities
Which fund is likely to have the highest management expense ratio?

QUESTION 257
Sofia, age 40, earns $120,000 annually working in upper management and hopes to be promoted to an executive-level position by age 50. She is a homeowner with no debt. Most likely, what are Sofia ‘ s investment objectives?

QUESTION 258
A mutual fund representative meets with a young family whose net worth/level of wealth is categorized as low, but they have the potential to become wealthy. In general, the family seems susceptible to believing that market events are predictable. Also, the family has a stronger impulse to avoid losses than earn gains. How might the mutual fund representative effectively address each of the two biases, respectively?

QUESTION 259
A fund manager has diversified the equity portfolio he manages in order to reduce the potential negative impact of unfavorable information relating to any one stock. What type of risk has he reduced?

QUESTION 260
A sales representative has accepted an instruction from a relatively new client to liquidate all positions and wire the proceeds. This request appears rather unusual and suspicious, so she escalates this to her compliance department. To whom should the compliance department report these transactions?

QUESTION 261
A mutual fund has the following investment objective: “This Fund invests in a diverse portfolio of equity securities that are judged to have fundamental growth opportunities.” What is this type of mutual fund?