Question 1

Saheed is a retiree who is considering splitting his pension income with his wife, Minu. Which of the following outcomes may occur if he shares his pension benefits?

Options :

A : Whether the couple saves on income tax will be dependent on Minu’s marginal tax rate.

B : Minu will be exposed to a pension adjustment (PA) if she receives income from his pension

C : This is a form of tax evasion and is therefore considered illegal based on income tax legislation

D : Regardless of how much income each person reports, the total amount of income taxes will not change.

Answer: A

Question 2

Exchange traded funds (ETFs) that track an index and index mutual funds have many similarities. However, what is a major difference between these two products?

Options :

A : While ETFs are prone to tracking errors, index funds are perfectly aligned with their underlying index

B :

ETFs can be purchased continuously throughout the trading day while index funds can only be bought or sold at the end of the day.

C :

The market price of ETFs always matches the underlying basket of securities while there can be a discrepancy in pricing index funds.

D : ETFs do not have management fees since they are exchange traded while index funds do incur such fees.

Answer: B

Question 3

Which of the following statements about registered education savings plans (RESPs) is CORRECT?

Options :

A : Contributions to RESPs are tax deductible.

B : There is a yearly contribution limit per beneficiary

C : RESPs must be collapsed by the end of the 31st year of its starting date

D : Contributed funds grow tax-free within the plan.

Answer: D

Question 4

During the calendar year, Firmansyah received a $1,800 eligible dividend from a large Canadian bank and a foreign, dividend from his The USD/CAD exchange rates is 1.3605. Firmansyah’s federal marginal tax bracket is 29%. The enhanced dividend gross-up rate is 38% and the federal dividend tax credit rate for eligible dividends is 15%. What federal tax liability will be due from the investment income?

Options :

A : $522.00

B : $348.00

C : $695.76

D : $870.00

Answer: C

Question 5

Maalik opens an account for a new client, John. During the new account process, Maalik determines that he will need to confirm John’s identity. Which of the following statements about Maalik’s identification requirements is CORRECT?

Options :

A :

If Maalik determines that there is anything suspicious about John’s transaction, he is required to report the matter to his dealer. The dealer must report the matter to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

B :

If Maalik learns that John is the president of a state-owned company, Maalik is required to report John as a Politically Exposed Foreign Person (PEFP) to his dealer. If John is not a US person, the dealer must report the account to the Internal Revenue Service (IRS)

C :

If John wants to make a large cash deposit of $10,000 or more, Maalik is required to collect personal information about John and report it to his dealer. The dealer must report the information to the Canada Revenue Agency (CRA)

D :

If John attempts to make a suspicious deposit, Maalik is required to report the attempt to his dealer. The dealer must keep records of attempted suspicious transactions that are not reported to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Answer: A

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