Free IFC Practice Test Questions 2026

A client has $950,000 in his RRSP account and $550,000 in his non-registered account held in nominee name with Tradewell Mutual Funds. In the event of his dealer, Tradewell Mutual Funds declaring insolvency, what is the total amount the client be eligible to receive from the Mutual Fund Dealers Association of Canada Investor Protection Corporation (IPC)?

A. The client will not be eligible for any coverage

B. The client will be eligible for coverage of $950,000

C. The client will be eligible for coverage of $1,500.000

D. The client will be eligible for coverage of $550,000

Dave purchases 10,000 units of a no-load US-dollar denominated mutual fund for US$15 per unit for a total cost of $165,400 Canadian. He later sells the units for US$16 per unit, with a loss of $11,400 Canadian. To what type of risk has Dave been exposed?

A. Market risk

B. Unique risk

C. Exchange rate risk

D. Default risk

As it pertains to fixed-income securities, which yield metric factors in cash flows relative to ongoing bond prices rather than the initial amount invested?

A. Earnings

B. Current

C. Effective

D. Dividend

What purpose does it serve for non-money market mutual funds to hold money market instruments?

A. Money market instruments primarily generate investment income that provides investors with preferential tax treatment.

B. If the portfolio manager has an immediate need for cash, money market instruments are relatively easy to liquidate

C. They are purchased by non-money market funds to satisfy the regulatory requirement of fund diversification.

D. They ensure that the fair market value of a mutual fund will not drop below a minimal market value

What term refers to the minimum rate at which the Bank of Canada lends money on a short-term basis to chartered banks?

A. Bank rate

B. Nominal rate

C. Prime rate

D. Target rate

Frederic recently sold his units in a US dollar (USD) denominated mutual fund. He wants to convert the proceeds back to Canadian dollars (CAD). If he received proceeds of $1,200 USD from the sale and the exchange rate is $1 CAD for $0.99 USD, how much will Frederic receive in Canadian dollars?

A. $1-188.00

B. $1,200.00

C. $1, 12.12

D. $1,320.00

Which of the following transactions takes place in the secondary market?

A. Issue of new debt and equity securities

B. Sale of mutual funds

C. Issue of federal Treasury bills

D. Resale of previously issued securities

Why is it important that an investor receive a copy of the Fund Facts document when buying a mutual fund?

A. The investor can verify that his statutory rights have been respected

B. The investor can verify that the fund has not misstated any material facts

C. The investor can verify that the fund’s stated investment objectives and risk profile match his own

D. The investor can verify that the fund manager is adhering to the fund’s stated investment objectives

What may be used to determine which of two bond portfolios is more sensitive to interest rate changes?

A. Beta

B. Sharpe

C. Variance

D. Time-weighted maturity

Jabir recently joined Prosper Wealth Inc. and is looking forward to being a Dealing Representative for the firm. Which of the following statements CORRECTLY describe when Jabir will be eligible to open new client accounts and sell investments?

A. Upon registration application by the dealer

B. Upon employment with the dealer

C. Upon formal confirmation from the regulator

D. Upon passing the proficiency course

All else being equal, which factor impacts fixed-income duration?

A. Maturity term

B. Dividend yield

C. Tracking error

D. Leverage risk

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?

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.