Question 1

Which document must be provided to investors before they can purchase mutual fund units, according to National Instrument 81-101?

Options :

A : The AIF.

B : The annual financial statements.

C : The simplified prospectus.

D : The Fund Facts document.

Answer: D

Question 2

An investor receives $500 in eligible dividends from a Canadian corporation. What is the net tax payable if the investor is taxed at a rate of 30%?

Options :

A : $207.

B : $250.

C : $103.

D : $60.

Answer: C

Question 3

In the context of conventional mutual funds and alternative mutual funds, which of the following accurately describes the maximum allowed short sales for a fund?

Options :

A : Conventional mutual funds can short sell up to 20% of the fund’s NAV, while alternative mutual funds can short sell up to 50% of the fund’s NAV.

B : Conventional mutual funds can short sell up to 50% of the fund’s NAV, while alternative mutual funds can short sell up to 20% of the fund’s NAV.

C : Conventional mutual funds can short sell up to 5% of the fund’s NAV, while alternative mutual funds can short sell up to 10% of the fund’s NAV.

D : Conventional mutual funds can short sell up to 10% of the fund’s NAV, while alternative mutual funds can short sell up to 20% of the fund’s NAV.

Answer: A

Question 4

Why might a designated broker engage in the removal of ETF units from the market?

Options :

A : To adjust the index tracking error.

B : To capitalize on arbitrage opportunities when ETFs trade at a premium.

C : To increase the NAV of the underlying securities.

D : To reduce liquidity in the ETF market.

Answer: B

Question 5

Alex, a 55-year-old investor, currently holds a portfolio of $200,000, allocated as follows: 50% equities, 30% fixed income, and 20% cash. Over the past year, the equity component has appreciated by 15%, the fixed income by 5%, and the cash balance has remained unchanged. Given these changes, what is Alex’s new allocation percentage in equities?

Options :

A : 50.00%.

B : 52.75%.

C : 55.25%.

D : 54.00%.

Answer: B