CSI IFC Exam Questions

Vendor

CSI

Exam Code

IFC

Exam Name

CSI Investment Funds in Canada Exam

Exam Duration

Total Questions

486

$ 40

PDF VERSION

DEMO QUESTIONS

Q1:
You are concerned about upcoming weakness in the Canadian dollar. Which type of fund should you invest in?

A: A specialty fund that uses derivatives to hedge the value of its portfolio

B: An international fund that hedges its foreign currency risk

C: A global fund that hedges its foreign currency risk

D: A global fund that does not hedge its foreign currency risk

Answer

Correct Answer: D
A global fund that does not hedge foreign currency risk benefits from a weakening Canadian dollar, as the value of foreign investments increases in Canadian dollar terms. The feedback from the document states:

‘Global mutual funds are attractive in that they can provide a hedge against a decline in the relative value of the Canadian dollar… It is important for mutual fund sales representatives to know whether their global mutual funds hedge foreign exchange risk, because some clients will want to bear that risk themselves, while others will not.’

Q2:
What risk type is prevalent regardless of the level of portfolio diversification or hedging?

A: Market

B: Default

C: Unique

D: Inflation

Answer

Correct Answer: A

Market risk (systematic risk) cannot be eliminated by diversification or hedging; it affects all securities in the market (e.g., recessions, geopolitical events, interest rate changes).

Default risk (B) relates to specific issuers of debt.

Unique risk (C) is company-specific and can be diversified away.

Q3:
When comparing the current yield and yield-to-maturity of a bond, which statement applies?

A: Yield-to-maturity accounts for the reinvestment of coupon payments.

B: Yield-to-maturity is based on the current market value of the bond, not the price paid.

C: Capital gains or capital losses are reflected in the current yield calculation.

D: Current yield includes in the calculation the time to maturity.

Answer

Correct Answer: A

This statement is correct because yield-to-maturity (YTM) is the annualized rate of return of a bond that assumes that all coupon payments are reinvested at the same rate until the bond matures. YTM takes into account the bond’s current market price, par value, coupon rate, and time to maturity, and it calculates the compound interest earned on the reinvested coupons. Therefore, YTM reflects the total return of the bond, including both the interest income and the capital gain or loss.

Reference = Current Yield vs. Yield to Maturity – Investopedia, Yield to Maturity (YTM) – Investopedia, Bond Current Yield Calculator

Q4:
What is the current yield on a $5,000 Government of Canada bond paying a 6% coupon and trading at a price of $102 (rounding to the nearest hundredth)?

A: 5.88%

B: 4.90%

C: 6.12%

D: 6.00%

Answer

Correct Answer: D

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CSI IFC Exam Questions

Vendor

Exam Code

Exam Name

Exam Duration

Total Questions

$ 40

PDF VERSION

DEMO QUESTIONS

Q1:
You are concerned about upcoming weakness in the Canadian dollar. Which type of fund should you invest in?

A: A specialty fund that uses derivatives to hedge the value of its portfolio

B: An international fund that hedges its foreign currency risk

C: A global fund that hedges its foreign currency risk

D: A global fund that does not hedge its foreign currency risk

Q2:
What risk type is prevalent regardless of the level of portfolio diversification or hedging?

A: Market

B: Default

C: Unique

D: Inflation

Q3:
When comparing the current yield and yield-to-maturity of a bond, which statement applies?

A: Yield-to-maturity accounts for the reinvestment of coupon payments.

B: Yield-to-maturity is based on the current market value of the bond, not the price paid.

C: Capital gains or capital losses are reflected in the current yield calculation.

D: Current yield includes in the calculation the time to maturity.

Q4:
What is the current yield on a $5,000 Government of Canada bond paying a 6% coupon and trading at a price of $102 (rounding to the nearest hundredth)?

A: 5.88%

B: 4.90%

C: 6.12%

D: 6.00%

Testimonials – Real Results From Real Students

Frequently Asked Question (FAQ's)

Useful Links

Extra Links

info@prep2certs.com

CSI IFC Exam Questions

Vendor

Exam Code

Exam Name

Exam Duration

Total Questions

$ 40

PDF VERSION

DEMO QUESTIONS

Q1: You are concerned about upcoming weakness in the Canadian dollar. Which type of fund should you invest in?

A: A specialty fund that uses derivatives to hedge the value of its portfolio

B: An international fund that hedges its foreign currency risk

C: A global fund that hedges its foreign currency risk

D: A global fund that does not hedge its foreign currency risk

Q2: What risk type is prevalent regardless of the level of portfolio diversification or hedging?

A: Market

B: Default

C: Unique

D: Inflation

Q3: When comparing the current yield and yield-to-maturity of a bond, which statement applies?

A: Yield-to-maturity accounts for the reinvestment of coupon payments.

B: Yield-to-maturity is based on the current market value of the bond, not the price paid.

C: Capital gains or capital losses are reflected in the current yield calculation.

D: Current yield includes in the calculation the time to maturity.

Q4: What is the current yield on a $5,000 Government of Canada bond paying a 6% coupon and trading at a price of $102 (rounding to the nearest hundredth)?

A: 5.88%

B: 4.90%

C: 6.12%

D: 6.00%

Testimonials – Real Results From Real Students

Frequently Asked Question (FAQ's)

Useful Links

Extra Links

info@prep2certs.com

Q1:
You are concerned about upcoming weakness in the Canadian dollar. Which type of fund should you invest in?

Q2:
What risk type is prevalent regardless of the level of portfolio diversification or hedging?

Q3:
When comparing the current yield and yield-to-maturity of a bond, which statement applies?

Q4:
What is the current yield on a $5,000 Government of Canada bond paying a 6% coupon and trading at a price of $102 (rounding to the nearest hundredth)?