Passed Exam Today IFC

A long margin purchase means buying securities partly with borrowed funds from the dealer .

The investor pays part of the purchase price (the margin), while the dealer lends the balance .

This differs from:

A (cash purchase): uses only own funds.

B (limit order): unrelated, based on price conditions.

D (short sale): selling borrowed shares, not buying.

Correct action = buying shares on borrowed funds at market price.

A fixed-period systematic withdrawal plan (SWP) is specifically designed for investors who need income over a defined time frame , making Option C the correct choice. The Investment Funds in Canada course explains that fixed-period plans “ provide regular withdrawals over a specified number of years, after which the fund is depleted .”

Samantha’s income requirement is temporary—she needs income for five years (ages 60 to 65) until her pension benefits begin. A fixed-period SWP ensures that withdrawals are structured to exhaust or significantly reduce the investment precisely at the end of that period, aligning perfectly with her objective.

A life SWP (Option B) is intended to provide income for an unknown duration and does not match Samantha’s defined timeframe. A constant SWP focuses on maintaining consistent withdrawal amounts indefinitely, which may result in premature depletion or excess capital. A ratio SWP adjusts withdrawals based on portfolio value and does not guarantee coverage for a specific period.

The CIFC text stresses that withdrawal strategies must align with time horizon and income needs , both of which clearly point to a fixed-period plan in this case. Therefore, Option C is fully correct and CIFC-verified.