Free IFC Practice Test Questions 2026

Francis wants to redeem his US Asset Allocation Fund as he needs the money for a down payment for a home purchase. The current proceeds from the redemption are USD $27,859, and the current CAD/USD exchange rate is 0.7353. How much will Francis receive in Canadian dollars when he redeems the Funds? Please round your answer to the nearest dollar

A. $37,888

B. $36,698

C. $42,861

D. $35,859

What term refers to surplus cash flow after expenses have been paid?

A. Gross income

B. Variable income

C. Discretionary income

D. Excess income

David is reviewing a simplified prospectus and is particularly interested in one of the funds. The investment objective stated for this fund is to provide dividend income, capital preservation, and some potential for capital gains. What fund is David interested in?

A. Mortgage fund

B. Preferred dividend fund

C. Equity growth fund

D. Bond fund

What statement shows a company’s position at a specific date?

A. Statement of financial position

B. Cash flow statement

C. Statement of comprehensive income

D. Bank statement

A mutual fund representative meets with a young family whose net worth/level of wealth is categorized as low, but they have the potential to become wealthy. In general, the family seems susceptible to believing that market events are predictable. Also, the family has a stronger impulse to avoid losses than earn gains. How might the mutual fund representative effectively address each of the two biases, respectively?

A. Moderate the first bias and adapt to the second.

B. Conform to the first bias and moderate the second.

C. Conform to both biases identified

D. Moderate both biases identified.

Samantha will be retiring from her full-time job when she turns 60 and would like to use her non-registered investment plan as income until she is eligible to receive her full pension benefit at age 65. What systematic withdrawal plan should she choose?

A. Constant

B. Life

C. Fixed-Period

D. Ratio

Lucas is 60 years old and continues to work. He presently is a plan holder of a registered retirement savings plan (RRSP). He is considering changing his RRSP to a registered retirement income fund (RRIF). Which of the following statements is CORRECT?

A. There is no minimum age to be an annuitant to a RRIF.

B. Once he changes his RRSP to a RRIF, his unused total RRSP contribution room is lost.

C. Minimal withdrawals are required to start in the current calendar year his RRIF was established

D. Investments that qualify as an eligible investment for a RRIF are different than for an RRSP.

The Mutual Fund Dealers Association of Canada (MFDA) has strict rules concerning conflicts of interest. Which of the following is TRUE?

A. Gifts and benefits may be provided to a client if your employer is aware of the benefits and has given approval.

B. Activities that do not relate specifically to your employer need not be reported.

C. Only actual conflicts must be reported to your employer. Potential conflicts need not be reported because they have not happened yet.

D. Borrowing money from a client will always be acceptable provided there is a written contract detailing the nature of the agreement.

What do Guaranteed Income Supplement (GIS) and Allowance for the Survivor have in common?

A. ability to defer benefits

B. benefits start at the age of 65

C. eligibility depends on income level

D. benefit amounts depend on individual contribution

Who has the ultimate responsibility for the activities of a mutual fund corporation?

A. The board of directors

B. The portfolio manager

C. Canadian Investment Regulatory Organization

D. The shareholders

With respect to the tax treatment of dividends received from a taxable Canadian corporation, which of the following statements is CORRECT?

A. Dividends are taxed the same way interest income is taxed.

B. Dividends from both preferred and common shares of Canadian corporations receive preferential tax treatment

C. Dividends from non-resident corporations receive preferential tax treatment

D. Only 50% of dividend income is subject to tax

You are concerned about upcoming weakness in the Canadian dollar. Which type of fund should you invest in?

A. A specialty fund that uses derivatives to hedge the value of its portfolio

B. An international fund that hedges its foreign currency risk

C. A global fund that hedges its foreign currency risk

D. A global fund that does not hedge its foreign currency risk