IFSE LATEST 2026 EXAM QUESTIONS AND SOLUTIONS
SCORED A+
✔✔In January, ABC common shares are trading at $28. Dodi owns 500 shares, which
he plans to sell in June to pay for the cost of his daughter's wedding. In order to protect
himself against a decline in the share price, Dodi decides to purchase put options that
allow him to sell the shares at $30. The premium for the options is $2 and the options
expire in June. In June, the stock is trading at $32. Which of the following statements is
most applicable? - ✔✔Dodi should let his options expire and sell his shares in the
market for $32.
✔✔35. Janine is interested in a short-term investment and is comparing the yields of
several products. She is considering a 360-day T-bill that is priced at $97,645. If the
face value of the T-bill is $100,000, what is the quoted yield for this T-bill?quoted yield =
(((face value - price) ÷ price) x (365 ÷ term)) x 100 - ✔✔2.45%
✔✔When do T-bill investors receive their interest? - ✔✔at maturity or redemption
✔✔Which of the following statements about yield curves is CORRECT? - ✔✔A yield
curve demonstrates the relationship between bond yield and term to maturity.
✔✔Roger owns shares of Stelco Inc. However, he plans on selling them sometime over
the next six to nine months. He is worried the stock price may drop during that time
period and wants to limit his potential loss. What is the most appropriate
recommendation given Roger's concern? - ✔✔Roger should buy put options on the
Stelco stock.
✔✔Doug purchases a $10,000 5-year bond with a coupon rate of 5%. He pays $9,700
for this bond. What is Doug's current yield? - ✔✔5.15%
✔✔40. Which of the following is a benefit of investing in mutual funds? - ✔✔ease and
convenience of buying and redeeming mutual fund units
✔✔What is the main difference between a closed-end fund and an open-end fund? -
✔✔open-end funds continuously issue and redeem units on demand while closed-end
funds issue a fixed number of shares
✔✔With closed-end funds, what is the relationship between the net asset value per
share (NAVPS) and the market price of the shares? - ✔✔The market price is not
necessarily equal to the net asset value per share.
✔✔What are the features of a global equity fund? - ✔✔long term capital appreciation
and significant potential for gains and losses due to currency fluctuations
, ✔✔Which of the following is a characteristic of exchange-traded funds (ETFs)? -
✔✔Lower management fees than comparable mutual funds.
✔✔45. In terms of risk, which one of the following statements is TRUE? - ✔✔Real
property funds are more volatile than mortgage funds.
✔✔Mischa has invested in the Halliwell Target Date Fund 2030. The fund invests part of
its portfolio in equities and part in fixed income products. The proportion depends on
how many years are left until maturity. Which of the following statements is TRUE? -
✔✔Target date funds are inappropriate for investors with a short time horizon.
✔✔How would you respond to a client question regarding strategic asset allocation? -
✔✔It is an investor strategy to decide upon an asset allocation and to periodically
rebalance the portfolio back to this original asset allocation.
✔✔Erna is looking for a mutual fund that can provide her with long-term capital
appreciation. She would also like the mutual fund to mimic the investments in the
S&P/TSX Composite Index. Which of the following mutual funds would be the most
appropriate? - ✔✔Latimer Canadian Index Fund
✔✔Hyacinth is considering moving out of her portfolio consisting of low risk guaranteed
investment certificates (GICs) and is reviewing the following four mutual funds as
investment possibilities.What would be the ranking of the following types of mutual
funds from the lowest risk and return to the highest risk and return? - ✔✔fixed income
fund, balanced fund, equity fund, specialty fund
✔✔50. Which of the following statements regarding fund of funds (FOFs) is TRUE? -
✔✔FOFs offer the professional expertise of a portfolio manager from each mutual fund
held in the FOFs.
✔✔Which of the following would appear on the income statement? - ✔✔net profit
✔✔What are retained earnings? - ✔✔portion of company profits retained by the
company after distribution of dividend to shareholders
✔✔What type of analysis focuses on studying past trends and patterns in a stock's price
and volume history? - ✔✔portion of company profits retained by the company after
distribution of dividend to shareholders
✔✔On August 31, Aishwarya purchases $1,000 of the Conquest European Equity Fund
at a net asset value per unit (NAVPU) of $14. On December 15 of the same year, she
decides to make another $1,000 purchase at a NAVPU of $12. On December 16, the
mutual fund distributes to its unitholders $4 per unit. Aishwarya's distributions are
automatically reinvested back into units of the mutual fund. Which of the following
SCORED A+
✔✔In January, ABC common shares are trading at $28. Dodi owns 500 shares, which
he plans to sell in June to pay for the cost of his daughter's wedding. In order to protect
himself against a decline in the share price, Dodi decides to purchase put options that
allow him to sell the shares at $30. The premium for the options is $2 and the options
expire in June. In June, the stock is trading at $32. Which of the following statements is
most applicable? - ✔✔Dodi should let his options expire and sell his shares in the
market for $32.
✔✔35. Janine is interested in a short-term investment and is comparing the yields of
several products. She is considering a 360-day T-bill that is priced at $97,645. If the
face value of the T-bill is $100,000, what is the quoted yield for this T-bill?quoted yield =
(((face value - price) ÷ price) x (365 ÷ term)) x 100 - ✔✔2.45%
✔✔When do T-bill investors receive their interest? - ✔✔at maturity or redemption
✔✔Which of the following statements about yield curves is CORRECT? - ✔✔A yield
curve demonstrates the relationship between bond yield and term to maturity.
✔✔Roger owns shares of Stelco Inc. However, he plans on selling them sometime over
the next six to nine months. He is worried the stock price may drop during that time
period and wants to limit his potential loss. What is the most appropriate
recommendation given Roger's concern? - ✔✔Roger should buy put options on the
Stelco stock.
✔✔Doug purchases a $10,000 5-year bond with a coupon rate of 5%. He pays $9,700
for this bond. What is Doug's current yield? - ✔✔5.15%
✔✔40. Which of the following is a benefit of investing in mutual funds? - ✔✔ease and
convenience of buying and redeeming mutual fund units
✔✔What is the main difference between a closed-end fund and an open-end fund? -
✔✔open-end funds continuously issue and redeem units on demand while closed-end
funds issue a fixed number of shares
✔✔With closed-end funds, what is the relationship between the net asset value per
share (NAVPS) and the market price of the shares? - ✔✔The market price is not
necessarily equal to the net asset value per share.
✔✔What are the features of a global equity fund? - ✔✔long term capital appreciation
and significant potential for gains and losses due to currency fluctuations
, ✔✔Which of the following is a characteristic of exchange-traded funds (ETFs)? -
✔✔Lower management fees than comparable mutual funds.
✔✔45. In terms of risk, which one of the following statements is TRUE? - ✔✔Real
property funds are more volatile than mortgage funds.
✔✔Mischa has invested in the Halliwell Target Date Fund 2030. The fund invests part of
its portfolio in equities and part in fixed income products. The proportion depends on
how many years are left until maturity. Which of the following statements is TRUE? -
✔✔Target date funds are inappropriate for investors with a short time horizon.
✔✔How would you respond to a client question regarding strategic asset allocation? -
✔✔It is an investor strategy to decide upon an asset allocation and to periodically
rebalance the portfolio back to this original asset allocation.
✔✔Erna is looking for a mutual fund that can provide her with long-term capital
appreciation. She would also like the mutual fund to mimic the investments in the
S&P/TSX Composite Index. Which of the following mutual funds would be the most
appropriate? - ✔✔Latimer Canadian Index Fund
✔✔Hyacinth is considering moving out of her portfolio consisting of low risk guaranteed
investment certificates (GICs) and is reviewing the following four mutual funds as
investment possibilities.What would be the ranking of the following types of mutual
funds from the lowest risk and return to the highest risk and return? - ✔✔fixed income
fund, balanced fund, equity fund, specialty fund
✔✔50. Which of the following statements regarding fund of funds (FOFs) is TRUE? -
✔✔FOFs offer the professional expertise of a portfolio manager from each mutual fund
held in the FOFs.
✔✔Which of the following would appear on the income statement? - ✔✔net profit
✔✔What are retained earnings? - ✔✔portion of company profits retained by the
company after distribution of dividend to shareholders
✔✔What type of analysis focuses on studying past trends and patterns in a stock's price
and volume history? - ✔✔portion of company profits retained by the company after
distribution of dividend to shareholders
✔✔On August 31, Aishwarya purchases $1,000 of the Conquest European Equity Fund
at a net asset value per unit (NAVPU) of $14. On December 15 of the same year, she
decides to make another $1,000 purchase at a NAVPU of $12. On December 16, the
mutual fund distributes to its unitholders $4 per unit. Aishwarya's distributions are
automatically reinvested back into units of the mutual fund. Which of the following
