Free IFC Practice Test Questions 2026

An investor, whose marginal tax rate is 29%, owns non-registered units of a fund that have a beginning and ending NAVPS of $21.50 and $25.50, respectively. The inflation rate is 2%. Assuming dividends are reinvested and ignoring additions or withdrawals, what is the before-tax, one-year rate of return?

A. 16.60%

B. 18.60%

C. 15.69%

D. 13.21%

What role do investment dealers play in the Canadian and global financial markets?

A. They are contributors to a company's profits

B. They are contributors to an investor's earnings.

C. They assist with the exchange of capital for a financial instrument

D. By underwriting financial instruments, they raise capital for investors

Which statement about unused registered retirement savings plan (RRSP) contribution room is CORRECT?

A. It may not be more than the RRSP contribution limit for the year in which it is carried forward.

B. It can be carried forward to future years

C. It can be carried forward a maximum of seven years.

D. It may not be carried forward.

You are comparing the performance of ABC Equity Fund and XYZ Equity Fund to their benchmark. Indicate the correct statement. Return | Year 1 | Year 2 | Year 3 | 3 Year Compound Return Benchmark | -2.0% | 12.6% | 20.6% | 10.0% ABC Equity Fund | -10.0% | 16.0% | 24.0% | 9.0% XYZ Equity Fund | 8.0% | 9.0% | 10.0% | 9.0%

A. Fund XYZ would have offered a lower likelihood of loss if a client needed to sell the investment

B. Fund ABC showed greater consistency in its simple annual returns

C. Fund ABC demonstrated a superior performance in a bearish market

D. Fund XYZ offered less protection on the downside

Khuyen is a Dealing Representative for Stark Contrast Investments. Her dealer has relationships with 20 different mutual fund families. This gave her the flexibility to sell two different types of funds from two different fund families to her client, Bao. $5,000 was invested in the Blue Moon Global Balanced fund and an additional $5,000 was invested in the Orange Sun Asset Allocation fund. Khuyen has been reviewing the performance of both funds and has determined that Bao would be better off being fully invested in the Blue Moon Global Balance fund. Bao had previously signed a Limited Authorization Form (LAF) for Khuyen, so she goes ahead and does not worry about consulting with Bao before making the change. What type of activity has Khuyen performed?

A. Top-down management

B. Churning

C. Discretionary trading

D. Value investing

What is a general observation of the Canadian mutual fund industry's evolution?

A. Providers are advocating the development of more regulations

B. Providers are increasing the initial deposit requirements

C. Providers are expanding the number of fund types

D. Providers are raising the minimum locked-in periods

Which conduct standard addresses personal financial dealings with clients?

A. Integrity

B. Compliance

C. Professionalism

D. Confidentiality

Your clients, Philip and Helen, have a disabled son, Alex, age 22. They want to set up a registered disability savings plan (RDSP) for Alex and have asked you for some information. Which statement is TRUE?

A. Philip and Helen's contributions are refundable to them.

B. There is no annual or lifetime maximum limit on contributions

C. Alex must quality for the disability tax credit

D. Philip and Helen's contributions are tax-deductible

On which of the following does the Personal Information Protection and Electronic Documents Act (PIPEDA) impose requirements?

A. consumers

B. departments and agencies of the Government of Canada

C. organizations in the private sector subject to federal regulation

D. departments and agencies of provincial governments

Gershon is a Dealing Representative and he opens a new account for his client, Isaac. Gershon collects the necessary information from Isaac in order to designate the Trusted Contact Person (TCP) for Isaac’s account. Which of the following statements about Isaac’s TCP is CORRECT?

A. The TCP is an alternative to a Power of Attorney (PQA) and has the authority to make changes to Isaac's account and direct trading.

B. The TCP is an alternative authority on Isaac's account that has the power to place a temporary hold on Isaac's account to disallow trading

C. The TCP is the person whom Gershon can speak to if he becomes concerned about Isaac's mental capacity to make financial decisions

D. The TCP is the person who is designated with authority to direct financial dealings for Isaac's account and make financial decisions

What does PIPEDA require firms in Canada to do?

A. Obtain consent only when using or publicly disclosing personal information

B. Prohibit the disclosure of private information under any circumstance

C. Verify client identification regarding specific transactions

D. Provide service even if an individual refuses the collection of their information

One of your clients, Sheldon, is 65 years old. He has $30,000 to invest. He has a low risk profile, and an investment objective of receiving regular income. He has a time horizon of 5 years. Based on Sheldon's risk profile and investment objective, which of the following investment recommendations is MOST appropriate for Sheldon?

A. ABC common shares which had a 20% annual yield during the previous 5 years

B. 3% Government of Canada Bonds at par, which have a maturity that coincides with Sheldon's time horizon.

C. FEG Labour-Sponsored Fund which will give him a tax benefit

D. Debentures of XYZ Corporation will give Sheldon a regular income and an attractive yield.