CISI IFC Based on Real Exam Environment

Jabir will be eligible to open new client accounts and sell investments only after he receives formal confirmation from the securities regulator that he is registered as a Dealing Representative. This is because registration is a legal requirement for anyone who trades securities or advises clients on securities in Canada, unless an exemption applies. Registration helps protect investors by ensuring that only qualified and competent individuals and firms can conduct securities related business. Jabir must also meet the proficiency, solvency, and suitability requirements for registration, as well as comply with the ongoing obligations of a registrant. Passing the proficiency course and being employed by the dealer are necessary but not sufficient conditions for registration. The dealer must apply for registration on behalf of Jabir and wait for the regulator’s approval.

Gross domestic product (GDP) is a measure of the total economic activity in a country. It is calculated by adding up the market value of all the final goods and services produced within a country’s borders in a given period of time, usually a year or a quarter. Final goods and services are those that are sold to the end users, such as consumers, businesses, or the government, and are not used as inputs for further production. For example, a loaf of bread sold to a consumer is a final good, but the flour used to make the bread is not. The market value of goods and services is the price that buyers are willing to pay for them in the market. This reflects the value added by the producers at each stage of production and avoids double counting. For example, if a farmer sells wheat for $10 to a miller, who then sells flour for $20 to a baker, who then sells bread for $30 to a consumer, the value added at each stage is $10, $10, and $10, respectively. The total value added is $30, which is equal to the market value of the final good (bread). Therefore, GDP only includes the market value of final goods and services and excludes intermediate goods and services.

Kiri has correctly fulfilled his suitability obligation by matching the risk-return profile of the fund with the personal circumstances of his client. The Conservative Bond Fund is a low-risk, low-return fund that pays regular interest income to investors. Myrtle’s investment objective is “income”, which means she wants to receive steady income from her investments and preserve her capital. Therefore, Kiri’s recommendation is reasonably suitable for Myrtle in all the circumstances.(Canadian Investment Funds Course, Chapter 2, Section 2.3)

Rakesh will not be subjected to a switch fee if it is outlined in the prospectus. A switch fee is a charge that may apply when an investor switches from one fund to another within the same fund family. The prospectus is the legal document that provides information about the fund, including its fees and charges. If the prospectus states that there is no switch fee or that there are certain conditions under which the switch fee is waived, then Rakesh will not have to pay a switch fee. The type of fund (no-load, low-load, or sales charge) does not determine whether there is a switch fee or not, as different fund families may have different policies regarding switch fees. References: Mutual Fund Fees, Prospectus