Pearson IFC New Attempt

Comprehensive Detailed Explanation with Investment Funds in Canada Course References:

The custodian of a mutual fund is responsible for safekeeping assets and handling cash inflows and outflows.

According to CSC, an independent financial organization, usually a trust company, serves as custodian. The custodian collects funds from investors, receives portfolio income, and arranges for distributions and redemptions.

Thus, the correct answer is A. A trust company.

A balanced mutual fund is a type of fund that invests in a mix of equities and fixed income securities, with the aim of achieving both growth and income objectives. A balanced fund typically has a target asset allocation that is specified in its mandate, and may vary within a certain range depending on market conditions. A balanced fund may also distribute interest, dividends, and capital gains to its unitholders. The Laurentian Fund is an example of a balanced fund, as it limits its equity exposure to 60% and holds between 40 - 60% in fixed income at all times.

References = Canadian Investment Funds Course, Unit 6: Mutual Funds, Lesson 1: Mutual Funds Overview, Section 6.1.3: Types of Mutual Funds 1; CIFC prepkit, Chapter 6: Mutual Funds, Question 6.1.3 2

A front-end load is a sales charge paid at the time of purchase, calculated as a percentage of the investment amount.

A. $1,500 × 3% = $45

B. $1,000 × 4% = $40

C. $5,000 × 1% = $50

D. $3,000 × 2% = $60

✅ Most expensive = $60 (Option D)

Correction: Answer = D. Purchase $3,000 at 2% front-end load

An open mortgage provides the borrower with maximum repayment flexibility. The borrower can generally repay some or all of the outstanding principal before maturity without incurring a prepayment penalty. This makes an open mortgage suitable for borrowers who expect to receive additional cash or anticipate paying off the mortgage before the end of the contractual term. A closed mortgage normally restricts additional principal payments to specified prepayment privileges and can impose a penalty when those limits are exceeded. “Conventional” and “high-ratio” describe the relationship between the mortgage amount and property value rather than the mortgage ' s prepayment structure. Current Financial Consumer Agency of Canada guidance likewise confirms that an open mortgage permits extra or lump-sum payments without a penalty. Therefore, D is correct.

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