Pass the IFSE Institute Investments & Banking CIFC Questions and answers with CertsForce

To calculate the federal tax liability from the investment income, we need to consider the following steps:

Convert the foreign dividend to Canadian dollars using the exchange rate. In this case, $882.02 USD x 1.3605 = $1,200.00 CAD.

Gross up the eligible dividend by the enhanced dividend gross-up rate of 38%. In this case, $1,800 x 1.38 = $2,484.

Add the grossed-up eligible dividend and the foreign dividend to get the total taxable income from dividends. In this case, $2,484 + $1,200 = $3,684.

Multiply the total taxable income from dividends by the federal marginal tax rate of 29% to get the gross federal tax payable. In this case, $3,684 x 0.29 = $1,068.36.

Multiply the grossed-up eligible dividend by the federal dividend tax credit rate of 15% to get the federal dividend tax credit. In this case, $2,484 x 0.15 = $372.60.

Subtract the federal dividend tax credit from the gross federal tax payable to get the net federal tax liability. In this case, $1,068.36 - $372.60 = $695.76.

Therefore, Firmansyah’s federal tax liability from his investment income is $695.76.

References: 1: Canadian Investment Funds Course - IFSE Institute 2 (Unit 9: Retirement)

 A registered retirement savings plan (RRSP) is a retirement savings and investing vehicle for employees and the self-employed in Canada. Contributions to an RRSP are tax-deductible and grow tax-deferred until withdrawal. However, RRSPs have a maturity date of December 31st of the year in which the holder turns 71. By then, the holder must convert the RRSP to a registered retirement income fund (RRIF), purchase an annuity, or withdraw the funds in cash (subject to tax). Therefore, B is the correct answer. References: Registered Retirement Savings Plan (RRSP): Definition and Types, Registered Retirement Savings Plan (RRSP) - Canada.ca

A mutual fund trust is a type of unit trust that meets certain conditions under the Canadian Income Tax Act and is eligible for favourable tax treatment. A unit trust is a collective investment vehicle that holds assets and distributes profits to individual unit owners, also called unitholders, instead of reinvesting them in the fund. A mutual fund trust is not a corporation and does not have a board of directors or shareholders. It is also not a closed-end fund, which has a fixed number of shares that trade on an exchange. A mutual fund trust is an open-end fund, which can issue and redeem units at any time based on the net asset value of the fund.

References: Canadian Investment Funds Course, Unit 5, Section 5.1

Your body language would be the most important to create an impressive first impression on your potential client. Body language is the non-verbal communication that includes your posture, gestures, facial expressions, eye contact, and physical distance. Body language can convey your confidence, enthusiasm, professionalism, and trustworthiness. According to research, body language accounts for 55% of the impact of a first impression, while tone of voice accounts for 38% and words account for only 7%. The other statements are less important than body language. Volume of your voice is part of your tone of voice, which can affect how your words are perceived by your potential client. However, volume alone is not enough to create an impressive first impression; you also need to consider your pitch, pace, and intonation. Your words are what you say to your potential client, which can include your introduction, your value proposition, and your questions. Your words are important to convey your message and establish rapport with your potential client. However, your words have less impact than your body language and tone of voice on your first impression. Tone of your voice is how you say your words, which can include your volume, pitch, pace, and intonation. Your tone of voice can influence how your potential client feels about you and your message. However, your tone of voice has less impact than your body language on your first impression. References: Unit 10: Sales Process, [The Importance Of Body Language In First Impressions]

 A commodity pool is a type of mutual fund that can invest in specified derivatives and forward contracts for commodities, such as grains, meats, metals, energy products, and coffee. A commodity pool allows investors to gain exposure to the commodity markets without having to buy or sell the physical commodities themselves. A commodity pool may also use leverage and hedging strategies to enhance returns and reduce risks. Therefore, B is the correct answer. References: Commodity Pool: Definition and How It Works - Investopedia, Canadian Investment Funds Course (CIFC) | IFSE Institute

Kerry’s taxable income would be $98,000 ($100,000 - $2,000). Using the federal tax rates provided in the image, the first $48,535 of her income would be taxed at 15%, the next $48,534 at 20.5%, and the remaining $931 at 26%. This would result in a total federal tax payable of $18,754. You can see the calculation in detail below:

Taxable Income

Marginal Tax Rate

Federal Tax Payable

$0 - $48,535

15%

$7,280.25

$48,536 - $97,069

20.5%

$9,934.47

$97,070 - $98,000

26%

$539.80

Total

$18,754.52

Note: The final answer is rounded to the closest whole dollar.

References: Canadian Investment Funds Course, Unit 8, Section 8.2; [4]

 Investment dealers are people or firms who buy and sell securities for their own account, whether through a broker or otherwise. They play an important role in the Canadian and global financial markets because they are market makers, create liquidity, and help promote long-term growth in the market. They also provide investment services to investors, such as underwriting securities, raising capital, and offering advice. By assisting with the exchange of capital for a financial instrument, they facilitate the flow of funds between savers and borrowers, and between different sectors and countries. The other options are not accurate descriptions of the role of investment dealers. References: Dealers: Definition in Trading, Meaning and Comparison to Brokers, Investment Dealers Definition

 Daisy could seek permission from her dealer to request a client mobility exemption with the Alberta Securities Commission. This exemption allows a registered individual in one jurisdiction to service a client who moves to another jurisdiction, without having to register in the new jurisdiction, subject to certain conditions. Some of these conditions are that the individual must be registered with a dealer that is registered in both jurisdictions, the individual must not have more than five clients in the new jurisdiction, and the individual must notify the regulator in the new jurisdiction of the exemption. References: Client Mobility Exemption

Loretta is looking for a well diversified equity fund that invests both within and outside Canada. She also wants a fund that invests in quality companies, which implies that she prefers lower risk and higher stability. A global equity fund would meet her criteria, as it can invest in any country, including Canada, and diversify across different regions and markets. A global equity fund that focuses on large, established companies, also known as blue chip stocks, would also suit her preference for quality and stability, as these companies tend to have strong financial performance, competitive advantages, and consistent dividends. Therefore, the Polar Global Blue Chip Equity Fund would be the best choice for Loretta among the given options.

References: Canadian Investment Funds Course, Unit 6, Section 6.2

A nominee name account is a type of account where the dealer, not the client, is the registered owner of the mutual funds held in the account. The dealer holds the funds in trust for the client and acts as the nominee for the client. The client is the beneficial owner of the funds and retains all the rights and benefits associated with the ownership. The dealer is responsible for maintaining the records of the client’s transactions and holdings, and for providing the client with confirmations, statements, and tax slips.

References = Canadian Investment Funds Course, Unit 8: Mutual Fund Administration, Lesson 1: Account Registration, Section 8.1.2: Nominee Name Accounts1; CIFC prepkit, Chapter 8: Mutual Fund Administration, Question 8.1.2 2