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【Hardware】 IFC Reliable Exam Braindumps | IFC Free Test Questions

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CISI Investment Funds in Canada (IFC) Exam Sample Questions (Q12-Q17):NEW QUESTION # 12
What is a statistical measure of price fluctuation that illustrates how a stock's price fluctuates around its average?
  • A. Sharpe ratio.
  • B. Correlation coefficient.
  • C. Spread.
  • D. Standard deviation.
Answer: D

NEW QUESTION # 13
Which of the following statements describes a feature of the Home Buyers' Plan (HBP)?
  • A. A qualifying home must be purchased by December 31 of the year of withdrawal.
  • B. If you have a spouse or common-law partner, each of you can withdraw up to JE50.000 from your registered retirement savings plans (RRSPs).
  • C. To qualify- as a first-time home buyer you or your spouse must never have previously owned a home
  • D. Once you are required to repay the amounts back to your RRSP. any missed or incomplete payments are subject to tax.
Answer: D
Explanation:
The Home Buyers' Plan (HBP) is a program that allows eligible first-time home buyers to withdraw up to
$35,000 from their registered retirement savings plans (RRSPs) to buy or build a qualifying home without paying any tax on the withdrawal. The withdrawn amount must be repaid to the RRSP over a period of up to
15 years, starting from the second year after the withdrawal. If the required repayment for a year is not made, it is added to the taxpayer's income and subject to tax. Therefore, option B describes a feature of the HBP.
The other options are not correct descriptions of the HBP. Option A is false because to qualify as a first-time home buyer, you or your spouse must not have owned and lived in another home as your principal place of residence during the four-year period before the date of withdrawal. Option C is false because a qualifying home must be purchased or built before October 1 of the year following the year of withdrawal. Option D is false because if you have a spouse or common-law partner, each of you can withdraw up to $35,000 from your RRSPs, not $50,000. References: [Home Buyers' Plan (HBP)], [Home Buyers' Plan (HBP) - Canada.ca],
[Home Buyers' Plan (HBP) | GetSmarterAboutMoney.ca]

NEW QUESTION # 14
Eleanora receives a $500 eligible Canadian dividend from her mutual fund. Her federal marginal tax rate for the year is 29%. Assuming the enhanced gross-up of 38% and a federal dividend tax credit of 15.02%, how much federal tax will she pay on her dividend?
  • A. $189.16
  • B. $96.46
  • C. $115.40
  • D. $69.90
Answer: B
Explanation:
The federal tax on eligible Canadian dividends is calculated as follows:
First, the dividend amount is grossed up by 38%, which means multiplying it by 1.38. This is to account for the corporate tax that has already been paid by the company. Eleanora's grossed-up dividend is $500 x 1.38 =
$690.
Second, the grossed-up dividend is multiplied by the federal marginal tax rate to get the gross federal tax.
Eleanora's gross federal tax is $690 x 0.29 = $200.10.
Third, the grossed-up dividend is multiplied by the federal dividend tax credit rate to get the federal tax credit.
This is to avoid double taxation of the dividend income. Eleanora's federal tax credit is $690 x 0.1502 =
$103.64.
Fourth, the federal tax credit is subtracted from the gross federal tax to get the net federal tax. Eleanora's net federal tax is $200.10 - $103.64 = $96.46.
Therefore, Eleanora will pay $96.46 in federal tax on her dividend. References: How Dividends Are Taxed and Reported on Tax Returns - Investopedia, Dividend Tax Credit in Canada - TurboTax

NEW QUESTION # 15
Which of the following statements about total return for money market funds is TRUE?
  • A. Current yield incorporates the compounding effect.
  • B. Effective yield will always be lower than current yield.
  • C. Performance is displayed with both current yield and effective yield.
  • D. Current yield reflects the income earned on a money market fund for the most recent 14 day period.
Answer: C
Explanation:
Current yield and effective yield are two ways of measuring the total return for money market funds. Current yield reflects the income earned on a money market fund for the most recent 14 day period, annualized.
Effective yield incorporates the compounding effect of reinvesting the income earned on a money market fund over a year. Both current yield and effective yield are displayed in the performance reports of money market funds, as they provide different information to investors.
References = Canadian Investment Funds Course, Unit 5: Types of Investments, Lesson 4: Money Market Instruments, Section 5.4.3: Total Return for Money Market Funds1; CIFC prepkit, Chapter 5: Types of Investments, Question 5.4.3 2

NEW QUESTION # 16
Which exemplifies the tendency of mutual fund companies to shut down poor performing funds?
  • A. Standard lot
  • B. Standby underwriting
  • C. Survivorship bias
  • D. Short selling
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Survivorship bias occurs when poor-performing funds are closed, excluding them from performance rankings and inflating the perceived performance of surviving funds. The feedback from the document states:
"All comparison universes also exhibit some degree of survivorship bias no matter how carefully the universes are constructed. Survivorship bias develops as defunct portfolios drop out and are excluded from rankings in subsequent quarters. A performance universe is essentially a universe of survivors." Reference:Chapter 14 - Understanding Mutual Fund PerformanceLearning Domain:Evaluating and Selecting Mutual Funds

NEW QUESTION # 17
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