Free CSI IFC Exam Questions

Question 1

Your employer has a contributory group RRSP under which he matches employee contributions, up to amaximum of 5% of salary.Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

A : It is more costly and time consuming to administer than traditional pension plans.

B : If you leave your employer, your group RRSP stays with the employer.

C : You need to wait until you file your taxes to receive your contribution tax deduction.

D : The employer chooses the plan provider.

Answer: D

Question 2

An investor wishes to add another security to his portfolio. He is looking at a stock that has a correlation withthe portfolio of 0.99. What should the advisor tell this investor?

A : This security will not reduce the risk of the portfolio, as the correlation is too low.

B : This security will reduce the risk of the portfolio, as the correlation is very low.

C : This security will reduce the risk of the portfolio, as there is an almost perfect positive correlation.

D : This security will not reduce the risk of the portfolio, as the correlation is almost positively perfect.

Answer: D

Question 3

When selecting an investment to add to a portfolio, what feature would reduce the overall risk?

A : High standard deviation

B : High beta

C : Low variance

D : Low alpha

Answer: C

Question 4

Recently interest rates have gone up. Your customer, Mr. Corelli, has asked you how this will affect the valueof his mortgage fund. What is the best response to give to Mr. Corelli?

A : The mortgage fund will not be affected because the rise in interest rates will affect only new mortgages

B : The value of the mortgage fund will go down because new mortgages will pay higher interest thanthose in the fund

C : The mortgage fund will not be affected because mortgages do not react to changes in interest rates theway bonds do

D : The value of the mortgage fund should go up because mortgages will now be earning higher interest

Answer: B

Question 5

Your employer has a contributory group RRSP under which he matches employee contributions, up to amaximum of 5% of salary.Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

A : It is more costly and time consuming to administer than traditional pension plans.

B : If you leave your employer, your group RRSP stays with the employer.

C : You need to wait until you file your taxes to receive your contribution tax deduction.

D : The employer chooses the plan provider.

Answer: D