CISI Updated IFC Exam Questions and Answers by avery

Comprehensive and Detailed Explanation From Exact Extract:

Securities commissions are responsible for regulating mutual and investment funds in Canada. The feedback from the document confirms:

"The responsibility of regulating mutual funds lies with the securities commissions."

A registered retirement income fund (RRIF) is a type of registered plan that provides a stream of income in retirement. A RRIF can be created by converting an RRSP, but once the conversion is done, the plan holder can no longer make contributions to the RRSP or the RRIF. Therefore, any unused RRSP contribution room is lost after the conversion. The other statements are incorrect because:

A. There is a minimum age to be an annuitant to a RRIF, which is 71 years old. However, a plan holder can convert an RRSP to a RRIF at any age before 71.

C. Minimum withdrawals are required to start in the year following the year the RRIF was established, not in the current calendar year.

D. Investments that qualify as an eligible investment for a RRIF are the same as for an RRSP, such as mutual funds, stocks, bonds, GICs, etc. References:

Canadian Investment Funds Course (CIFC) Study Guide, Chapter 6: Registered Plans, Section 6.2: Registered Retirement Income Fund (RRIF), page 6-81

Registered Retirement Income Fund (RRIF) - Canada.ca2

 According to the What Is a Call Option and How to Use It With Example - Investopedia, a call option is a contract that gives the buyer the right, but not the obligation, to buy an underlying stock at a specified price (the strike price) within a specified time period (the expiration date). The seller of a call option is obligated to sell the stock if the buyer exercises the option. Pierre buys a call option on a stock, which means he has the right to buy the stock if he exercises the option. He can also choose not to exercise the option or sell it before expiration.

Comprehensive and Detailed Explanation From Exact Extract:

Direct use of capital savings involves investing in tangible projects or assets, such as constructing infrastructure or facilities. Building a new factory is a direct application of capital savings. The feedback from the document states:

"Capital savings are used directly by, for example, a couple investing their savings in a home; a government investing in a new highway or hospital; or a domestic or foreign company paying start-up costs for a plant to produce a new product."