Segregated Funds And Annuities Exam
SEGREGATED FUNDS AND ANNUITIES EXAM NEWEST 2025 EXAM
COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
The interest, dividends and capital gains earned in a fund are reinvested in that fund. They
increase unit value and increase the investors ______per unit. The ______is a calculation that
determines the tax cost of an investment to its investors. Increasing the ______reduces tax
when the units are sold. - ANSWER-Adjusted cost base
______is measured by the investor's ability to replace her losses. ______is an especially
important consideration for investors who are approaching retirement or retired. - ANSWER-
Risk capacity
______is the process in which the will of a deceased is proven valid and the person appointed
as executor of the will is accepted. It occurs in the provincial home court of the deceased and is
finalized when "letters______" or an equivalent document is issued. ______fees are a charge by
the province against the value of the deceased's estate. - ANSWER-Probate
When a withdrawal is made from a registered account, it must be declared for tax purposes and
the entire amount withdrawn is taxed at the same rate as ________. - ANSWER-Interest income
______fees do not apply when the beneficiary of a segregated fund contract is not the estate.
The ability to put the proceeds in the hands of the beneficiary without going to ________is one
of the single most important benefits of segregated fund ownership. - ANSWER-Probate
Money transferred from another investment or savings account, registered or non-registered,
can form the lump-sum deposit. If a registered account is the source of transferred money, then
the contract is set up as another registered account to continue its ______. - ANSWER-Tax
deferral
1|Page
, Segregated Funds And Annuities Exam
______guarantees that a segregated fund contract owner will retain up to $60,000 or 85% of
guarantees, whichever is higher. In other words, it allows a segregated fund contract owner to
retain 100% of her guaranteed investment if it is equal to or smaller than $60,000. - ANSWER-
Assuris
________permit withdrawals, subject to minimum and maximum amounts. Payout annuities do
not permit withdrawals. - ANSWER-Accumulation annuities
There is no ______in the application for a segregated fund contract. This means that the health
of the contracts policy owner or annuitant is not accessed because guarantees are based on the
strength of the investment and not the persons life. - ANSWER-Medical underwriting
Funds are also subject to specific risks, based on their type. For instance, a bond fund is highly
susceptible to interest rate risk but has little market risk. An ________fund, on the other hand,
has very high market risk and low interest rate risk. - ANSWER-Equity
Dividends received from ______are taxed at a lower rate than interest income as a result of the
dividend tax credit. This increases investor appeal. - ANSWER-Canadian corporations
Balanced funds suit an investor who wants some exposure to stocks, for growth potential, but is
not prepared to accept the volatility of stocks alone. A ________emphasizes binds and security
of capital, while having an equity component to provide growth potential to offset inflation. -
ANSWER-Balanced income fund
If the investor needs to make a withdrawal before the contract matures, she does not receive
the benefit of the ______and receives market value for the withdrawal minus any outstanding
sales charges, such as the DSC. - ANSWER-Maturity guarantee
The investor who pays a _______pays no further sales fee if she redeems units during the term
of the contract. - ANSWER-front end load
2|Page
, Segregated Funds And Annuities Exam
A segregated fund in a _____is bound by the rule that apply to all_____. Therefore, the oldest
age at which a contract can begin as an _____is 71, deposits can be made untill December 31 of
the year in which the contract owner turns 71 Then, the _____is converted to a registered
retirement income fund (RRIF). - ANSWER-Registered retirement savings plan
Deposits or premiums paid into a non registered account or TFSA are not tax-deductible,
however, they are tax-deductible when paid into a _____, except when the account is a RESP or
RDSP. - ANSWER-Registered account
Annuities that pay an income are called _____, they are differentiated by whether the payout
begins immediately or at a future date (deferred annuity). - ANSWER-Payout annuities
Once annuity payments start, they generally cannot be stopped before the end of the payment
period. Each annuity payment is the same unless the annuity is _____or variable. Most
annuities are issued with a set, or level payment. - ANSWER-indexed
If a contracts owner surrenders her term annuity and receives its commuted value, ____would
no longer exist for the sum received. - ANSWER-Creditor Protection
_____is calculated as follows :
PV x (1 + interest) ^n - ANSWER-Future Value
Once all approvals are in place, the fund is open for investment. The date when the fund begins
operation is its _____date. - ANSWER-inception
Insurers keep their _____separate from other company assets, thus giving them their name. -
ANSWER-Segregated funds
Some investments guarantee that the full amount invested will be repaid plus a profit. These
investments include _____, and some bonds. - ANSWER-Guaranteed investment certificates
3|Page
, Segregated Funds And Annuities Exam
Real return is calculated as the _____on an investment minus the rate of inflation. - ANSWER-
Nominal Return
The three main asset classes are stocks, cash, and _____. Two other classes are often added,
they are real estate and commodities. - ANSWER-Bonds
_____is calculated as
FV % (1 + interest) ^n - ANSWER-Present value
Some segregated funds invest in other segregated funds, these are called _____. - ANSWER-
funds of funds
Prior to contract maturity, an investor can lose up to the sum invested since the _____does not
apply. The investor must also be prepared for the minimum 10 year term of the investment. The
investor may be unable to take advantage of other investment opportunities during those 10
years. - ANSWER-Maturity guarantee
When the ______at the time of purchase is fixed, that payment will be received for the duration
of the annuity. It is guaranteed. If interest rates rise or fall the______remains constant. -
ANSWER-Annuity payment
The highest rated bonds are called______. They have a AAA rating. On the other end of the
spectrum are bonds that are most likely to default on repayment. They are called high yield or
junk bonds, which are BB or lower. - ANSWER-Investment grade bonds
Similar to the protection provided by assuris on the life insurance side, investor protection for
stock investors is provided by the ______incase of investment dealer insolvency. - ANSWER-
Canadian investors protection fund
4|Page
SEGREGATED FUNDS AND ANNUITIES EXAM NEWEST 2025 EXAM
COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
The interest, dividends and capital gains earned in a fund are reinvested in that fund. They
increase unit value and increase the investors ______per unit. The ______is a calculation that
determines the tax cost of an investment to its investors. Increasing the ______reduces tax
when the units are sold. - ANSWER-Adjusted cost base
______is measured by the investor's ability to replace her losses. ______is an especially
important consideration for investors who are approaching retirement or retired. - ANSWER-
Risk capacity
______is the process in which the will of a deceased is proven valid and the person appointed
as executor of the will is accepted. It occurs in the provincial home court of the deceased and is
finalized when "letters______" or an equivalent document is issued. ______fees are a charge by
the province against the value of the deceased's estate. - ANSWER-Probate
When a withdrawal is made from a registered account, it must be declared for tax purposes and
the entire amount withdrawn is taxed at the same rate as ________. - ANSWER-Interest income
______fees do not apply when the beneficiary of a segregated fund contract is not the estate.
The ability to put the proceeds in the hands of the beneficiary without going to ________is one
of the single most important benefits of segregated fund ownership. - ANSWER-Probate
Money transferred from another investment or savings account, registered or non-registered,
can form the lump-sum deposit. If a registered account is the source of transferred money, then
the contract is set up as another registered account to continue its ______. - ANSWER-Tax
deferral
1|Page
, Segregated Funds And Annuities Exam
______guarantees that a segregated fund contract owner will retain up to $60,000 or 85% of
guarantees, whichever is higher. In other words, it allows a segregated fund contract owner to
retain 100% of her guaranteed investment if it is equal to or smaller than $60,000. - ANSWER-
Assuris
________permit withdrawals, subject to minimum and maximum amounts. Payout annuities do
not permit withdrawals. - ANSWER-Accumulation annuities
There is no ______in the application for a segregated fund contract. This means that the health
of the contracts policy owner or annuitant is not accessed because guarantees are based on the
strength of the investment and not the persons life. - ANSWER-Medical underwriting
Funds are also subject to specific risks, based on their type. For instance, a bond fund is highly
susceptible to interest rate risk but has little market risk. An ________fund, on the other hand,
has very high market risk and low interest rate risk. - ANSWER-Equity
Dividends received from ______are taxed at a lower rate than interest income as a result of the
dividend tax credit. This increases investor appeal. - ANSWER-Canadian corporations
Balanced funds suit an investor who wants some exposure to stocks, for growth potential, but is
not prepared to accept the volatility of stocks alone. A ________emphasizes binds and security
of capital, while having an equity component to provide growth potential to offset inflation. -
ANSWER-Balanced income fund
If the investor needs to make a withdrawal before the contract matures, she does not receive
the benefit of the ______and receives market value for the withdrawal minus any outstanding
sales charges, such as the DSC. - ANSWER-Maturity guarantee
The investor who pays a _______pays no further sales fee if she redeems units during the term
of the contract. - ANSWER-front end load
2|Page
, Segregated Funds And Annuities Exam
A segregated fund in a _____is bound by the rule that apply to all_____. Therefore, the oldest
age at which a contract can begin as an _____is 71, deposits can be made untill December 31 of
the year in which the contract owner turns 71 Then, the _____is converted to a registered
retirement income fund (RRIF). - ANSWER-Registered retirement savings plan
Deposits or premiums paid into a non registered account or TFSA are not tax-deductible,
however, they are tax-deductible when paid into a _____, except when the account is a RESP or
RDSP. - ANSWER-Registered account
Annuities that pay an income are called _____, they are differentiated by whether the payout
begins immediately or at a future date (deferred annuity). - ANSWER-Payout annuities
Once annuity payments start, they generally cannot be stopped before the end of the payment
period. Each annuity payment is the same unless the annuity is _____or variable. Most
annuities are issued with a set, or level payment. - ANSWER-indexed
If a contracts owner surrenders her term annuity and receives its commuted value, ____would
no longer exist for the sum received. - ANSWER-Creditor Protection
_____is calculated as follows :
PV x (1 + interest) ^n - ANSWER-Future Value
Once all approvals are in place, the fund is open for investment. The date when the fund begins
operation is its _____date. - ANSWER-inception
Insurers keep their _____separate from other company assets, thus giving them their name. -
ANSWER-Segregated funds
Some investments guarantee that the full amount invested will be repaid plus a profit. These
investments include _____, and some bonds. - ANSWER-Guaranteed investment certificates
3|Page
, Segregated Funds And Annuities Exam
Real return is calculated as the _____on an investment minus the rate of inflation. - ANSWER-
Nominal Return
The three main asset classes are stocks, cash, and _____. Two other classes are often added,
they are real estate and commodities. - ANSWER-Bonds
_____is calculated as
FV % (1 + interest) ^n - ANSWER-Present value
Some segregated funds invest in other segregated funds, these are called _____. - ANSWER-
funds of funds
Prior to contract maturity, an investor can lose up to the sum invested since the _____does not
apply. The investor must also be prepared for the minimum 10 year term of the investment. The
investor may be unable to take advantage of other investment opportunities during those 10
years. - ANSWER-Maturity guarantee
When the ______at the time of purchase is fixed, that payment will be received for the duration
of the annuity. It is guaranteed. If interest rates rise or fall the______remains constant. -
ANSWER-Annuity payment
The highest rated bonds are called______. They have a AAA rating. On the other end of the
spectrum are bonds that are most likely to default on repayment. They are called high yield or
junk bonds, which are BB or lower. - ANSWER-Investment grade bonds
Similar to the protection provided by assuris on the life insurance side, investor protection for
stock investors is provided by the ______incase of investment dealer insolvency. - ANSWER-
Canadian investors protection fund
4|Page
