Free IFC Practice Test Questions 2026

Your employer has a contributory group RRSP under which he matches employee contributions, up to a maximum of 5% of salary. Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

A. It is more costly and time consuming to administer than traditional pension plans.

B. If you leave your employer, your group RRSP stays with the employer

C. You need to wait until you file your taxes to receive your contribution tax deduction.

D. The employer chooses the plan provider

What type of risk is the fundamental risk factor for fixed-income securities?

A. Liquidity risk

B. Reinvestment risk

C. Market risk

D. Interest rate risk

Salvatore and Harriet recently got married. They are presently renting but are looking forward to buying a new home within 5 years. They both have separate savings established in their respective registered retirement savings plans (RRSPs) of $100,000 each. They have come to Dustin, a Dealing Representative, to open an additional joint investment account to increase their savings to assist with their future plans of buying a new home. What does Dustin need to ensure about his recommendation?

A. That the recommended investment is different from what they currently own to avoid over-concentration

B. That the risk profile for this new account is the same as what has been determined for other accounts.

C. That the risk profile of the investment and each client's individual risk profile are a match.

D. That the investment recommendation is based on the risk profile of the new joint account.

Jabir begins the registration process with his new dealer Prosper Wealth Inc. Jabir is excited about his new career and eager to start calling clients, opening new accounts, and selling investments. Which of the following CORRECTLY describes when Jabir will be eligible to open new client accounts and sell investments?

A. Upon employment with the dealer

B. Upon registration application by the dealer

C. Upon passing the proficiency course

D. Upon formal confirmation from the regulator

What type of transaction must be reported under current anti-money laundering and terrorist financing legislation?

A. Any cross-border transactions of $10,000 CDN or more

B. Deposit transactions of $5,000 CDN or more

C. Deposit transactions of $10,000 CDN or more

D. Any transaction of $10,000 CDN or more

Tristan is evaluating different mutual fund options for his client. What mutual fund option would be the most expensive to buy in dollar terms?

A. Purchase $1500 at 3% front-end load

B. Purchase $1000 at 4% front-end load

C. Purchase $5000 at 1% front-end load

D. Purchase $3000 at 2% front-end load

Josephine is a Dealing Representative with Sunshine Mutual Funds Inc. for over 10 years. Her brother Jonathan has an account with Sunshine Mutual Funds Inc., too. Jonathan wants Josephine to manage his portfolio and make investment decisions on his behalf. Jonathan trusts his sister to make better investment choices than he can. He also wants to give Power of Attorney (POA) to Josephine so she can have full authority over his account. How can Josephine respond to her brother's request?

A. Josephine can accept a limited POA.

B. Josephine cannot accept the POA as she is not the immediate family.

C. Josephine can accept the POA as it is an exception that is permitted under the MFDA rules.

D. Josephine should accept the POA after making a full disclosure to her dealer about the POA.

Which of the following statements is true when comparing fund of funds to traditional mutual funds?

A. Fund of funds have higher fees than traditional mutual funds since there are two sets of management fees.

B. Fund of funds have more asset class options available and lower fees than traditional mutual funds

C. Since fund of funds invest primarily outside Canada, they will have higher fees than traditional mutual funds

D. Fund of funds have more fee structure options available and lower fees than traditional mutual funds.

What items are typically classified as current assets on the statement of financial position?

A. Cash, accounts receivable, and retained earnings

B. Cash, accrued charges, and accounts receivable

C. Cash, accounts receivable, and inventories

D. Cash, inventories, and depreciation

Malik has been saving money for retirement but he is worried about the impact inflation may have on the value of his savings. He wants to purchase a bond that will give him a steady stream of income that is greater than the inflation rate. He has found a bond issued by a major airline with a market price of $9,200, a par value of $10,000, and a coupon rate of 6.75%. What is the current yield of this bond?

A. 7.34%

B. 6.75%

C. 6.25%

D. 6.21%

What is a key difference between marketable government bonds and treasury bills?

A. Treasury bills do not pay any coupon interest, while marketable bonds do

B. Marketable government bonds may be sold at a discount while Treasury bills are sold at a premium

C. Treasury bills trade in the over-the-counter market, while marketable bonds trade on the exchange

D. Marketable government bonds actively trade in the secondary market while Treasury bills can only be bought from and sold to the government

Your client Jerry's asset mix is deviating from the original target asset mix because the stock market has had strong performance. Equities are now over-weighted in Jerry's account. The original target asset mix is still valid since Jerry's situation has not changed. He is invested in several bond and equity mutual funds. What should you do?

A. advise him to change his know your client (KYC) form to reflect more growth

B. advise him to do nothing since equities could outperform bonds in the next year

C. advise him to sell a portion of assets invested in bond funds and reinvest the proceeds into equity funds

D. advise him to sell a portion of assets invested in equity funds and reinvest the proceeds into bond funds