Question 1

Quintin has been a Dealing Representative for Global Maximum Financial for 5 years. Today, he opened an account for his new client, Reginald. In addition to opening a new account, Reginald agreed to accept Quintin's investment recommendation and placed a purchase order to buy units of the Global Maximum Value Equity fund. Quintin informed his Branch Manager Lupita about this new account on the same day the purchase order was received. Lupita told Quintin that she would complete her review of the New Client Application Form (NCAF) by no later than tomorrow. Which statement regarding this new account opening is CORRECT?

Options :

A : Quintin cannot accept purchase orders from a client until Lupita completes her review of the NCAF.

B :

Lupita has two business days from the date of opening the new account to approve the NCAF completed by Quintin.

C :

Quintin and Lupita are both following proper procedure regarding new account openings and purchase orders.

D : Unless Quintin is presently under probation, he does not need Lupita-s approval regarding the NCAF.

Answer: A

Question 2

Lior is considering an investment that gains exposure to companies that trade on the Toronto Stock Exchange (TSX). He is not sure what the differences are between a Canadian equity fund and a Canadian dividend fund. What would you tell him?

Options :

A : Equity funds are more appropriate than dividend funds if Lior requires a steady flow of income

B : Dividend funds generate tax-preferred income while income from equity funds is fully taxable

C : Dividend funds tend to be less volatile and lower risk than equity funds.

D : Equity funds hold common shares while dividend funds hold only preferred shares.

Answer: C

Question 3

What is the role of a custodian?

Options :

A : to ensure safekeeping of all the securities in the portfolio

B : to oversee the general administration of the mutual fund

C : to construct and manage the portfolio of investments

D : to calculate the daily net asset value per unit (NAVPU) of the mutual fund

Answer: A

Question 4

Xian-Li believes she is a sophisticated investor. She has constructed her own portfolio and has had some success. She does not believe in studying a company’s details such as earnings, expenses, or assets. She is more concerned with patterns in a company’s stock price over time. She believes patterns form and can be used to predict future movements in the market. How does Xian-Li evaluate the companies in her portfolio?

Options :

A : fundamental analysis

B : flowchart analysis

C : technical analysis

D : value analysis

Answer: C

Question 5

Winter is a Dealing Representative with Top Tier Investing, a mutual fund dealer and member of the Mutual Fund Dealers Association of Canada (MFDA). Which of the following statements about Winter's suitability obligation is CORRECT? Winter is required to make a suitability determination every time: i) she makes a recommendation to a client ii) a client's investment returns decline. iii) she opens a new client account iv) the markets fluctuate.

Options :

A : i and ii

B : i and iii

C : ii and iii

D : iii and iv

Answer: B

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