CSI Updated IFC Exam Questions and Answers by romie

 The “Know Your Product” obligation requires that Dealing Representatives understand all the products they purchase, sell or recommend for their clients, including their structure, features, risks, costs and suitability. Rehan has fulfilled this obligation by reviewing the features of the Hedge Fund and explaining them to Georgi, who may not be aware of the lock-up period and its implications. The other Dealing Representatives have failed to fulfill their obligation by either not knowing or not disclosing important information about the products they deal with.

Canadian Investment Funds Course, Chapter 7: Know Your Product1

The inflation rate is calculated by subtracting the previous year’s CPI from the current year’s CPI, dividing by the previous year’s CPI, and multiplying by 100. In this case:

(146.9 - 140.6) / 140.6 = 6.3 / 140.6 ≈ 0.0448 or 4.48%.

The feedback from the document confirms:

" To calculate the rate of inflation over a period of time one must subtract the CPI at the beginning of the period from the CPI at the end of the period and then divide the result by the CPI at the beginning of the period. In this example, the solution can be derived as follows: (146.9 - 140.6) / 140.6. "

Holding client orders until the following week violates the requirement for continuous service to clients under dual employment conditions. The feedback from the document states:

" A mutual fund dealing representative who works for or is sponsored by a member of the MFDA may have, and continue in, another gainful occupation, provided that the dealer establishes and maintains procedures to ensure continuous service to clients. In this example, Karen’s clients are not receiving continuous service. "

Gary’s decision to prioritize the client’s interests over meeting a sales target reflects his ethical responsibility. The feedback from the document states:

" Gary is fulfilling his ethical responsibility by placing his client’s needs ahead of his own need to reach a sales target. As the new fund is similar to the current investment, it would be an appropriate one for the client, so he would not be compromising his legal responsibility to ensure that all client orders are suitable. "