CSI Updated IFC Exam Questions and Answers by eshaal

When opening a new non-registered account, the Know Your Client (KYC) rule requires collecting information such as:

personal and financial circumstances,

investment knowledge,

investment objectives,

risk profile, and

time horizon.

The Social Insurance Number (SIN) is mandatory only for registered accounts (RRSP, TFSA, RESP, etc.) to track tax-related reporting, but it is optional for non-registered accounts.

Thus, the correct answer is A. Social insurance number.

Gifts and benefits may be provided to a client if your employer is aware of the benefits and has given approval. This is one of the rules concerning conflicts of interest set by the MFDA. A conflict of interest is a situation where a person’s personal interests conflict with their professional obligations or duties. Gifts and benefits may create a conflict of interest if they influence or appear to influence the person’s judgment or actions. Therefore, the MFDA requires that any gifts and benefits given or received by a mutual fund dealer or its representatives must be disclosed to and approved by the dealer, and must not compromise or appear to compromise the dealer’s or representative’s integrity or objectivity. References: MFDA Bulletin #0756-P - Conflicts of Interest

The Montreal Exchange (also referred to as Bourse de Montreal) is the only Canadian exchange specializing exclusively in financial and equity futures and options. The feedback from the document confirms:

"The Montreal Exchange (Bourse de Montreal) is the only exchange in Canada that deals exclusively with financial and equity futures and options."

Market risk, or systematic risk, arises from factors affecting the entire market, such as changes in inflation or interest rates, and cannot be fully eliminated through diversification. The feedback from the document states:

"Once a portfolio becomes well diversified, the only remaining risk to be concerned about is market risk. Market risk is defined as the variability of a stock or a portfolio in relation to the market as a whole. The process of diversification cancels out much firm-specific risk, so market risk is less than the total risk you would calculate if you looked at each stock separately. Market risk is also referred to as systematic risk and arises from such things as inflation, the business cycle, and interest rates."