IFSE CORE EXAM 2026 TEST QUESTIONS AND SOLUTIONS
SCORED A+
✔✔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.
✔✔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
, ✔✔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? - ✔✔technical
✔✔A portfolio manager chooses the securities in the portfolio in an attempt to replicate
a benchmark. What type of investment strategy is this? - ✔✔passive investing
✔✔Which of the following statements best describes systemic risk? - ✔✔The failure of a
large investment bank resulting in bringing about instability of the entire banking system.
✔✔Narendra, 20, has recently started working and has invested his entire savings of
$5,000 in the ABC Canadian Toronto Stock Exchange / Standard and Poor's (TSX/S&P)
Equity Fund. The mutual fund has a beta of 0.75. What would one expect to happen to
the return on the mutual fund if the TSX /S&P Index were to decline by 20%? - ✔✔The
fund would decline by 15%.
✔✔Which of the following does the Independent Review Committee of a mutual fund
have the power to oversee and approve? - ✔✔potential conflicts of interests involving
the investment fund manager
✔✔Which of the following statement regarding dollar-cost averaging is TRUE? - ✔✔It
reduces the risk associated with the timing of a mutual fund investment.
✔✔If a mutual fund has a front-end load of 5%, what is the purchase price per unit paid
by the investor if the net asset value per unit (NAVPU) is $10.00 at the time of
purchase? - ✔✔$10.53 ($10.00 ÷ (1 - 5%))
✔✔Which of the following expenses is NOT included in the calculation of a mutual
fund's management expense ratio (MER)? - ✔✔brokerage fees
✔✔Dora started a registered education savings plan (RESP) for her newborn daughter
this year and contributed $3,000 to the plan. Her family income is high enough that she
does not qualify for enhanced Canada Education Savings Grant (CESG) payments.
How much will Dora receive as CESG? - ✔✔$500 (20% of your first 2.5k)
SCORED A+
✔✔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.
✔✔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
, ✔✔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? - ✔✔technical
✔✔A portfolio manager chooses the securities in the portfolio in an attempt to replicate
a benchmark. What type of investment strategy is this? - ✔✔passive investing
✔✔Which of the following statements best describes systemic risk? - ✔✔The failure of a
large investment bank resulting in bringing about instability of the entire banking system.
✔✔Narendra, 20, has recently started working and has invested his entire savings of
$5,000 in the ABC Canadian Toronto Stock Exchange / Standard and Poor's (TSX/S&P)
Equity Fund. The mutual fund has a beta of 0.75. What would one expect to happen to
the return on the mutual fund if the TSX /S&P Index were to decline by 20%? - ✔✔The
fund would decline by 15%.
✔✔Which of the following does the Independent Review Committee of a mutual fund
have the power to oversee and approve? - ✔✔potential conflicts of interests involving
the investment fund manager
✔✔Which of the following statement regarding dollar-cost averaging is TRUE? - ✔✔It
reduces the risk associated with the timing of a mutual fund investment.
✔✔If a mutual fund has a front-end load of 5%, what is the purchase price per unit paid
by the investor if the net asset value per unit (NAVPU) is $10.00 at the time of
purchase? - ✔✔$10.53 ($10.00 ÷ (1 - 5%))
✔✔Which of the following expenses is NOT included in the calculation of a mutual
fund's management expense ratio (MER)? - ✔✔brokerage fees
✔✔Dora started a registered education savings plan (RESP) for her newborn daughter
this year and contributed $3,000 to the plan. Her family income is high enough that she
does not qualify for enhanced Canada Education Savings Grant (CESG) payments.
How much will Dora receive as CESG? - ✔✔$500 (20% of your first 2.5k)
