Pass with IFC Practice Materials 100% for sure

Eleanora receives a $500 eligible Canadian dividend from her mutual fund. Her federal marginal tax rate for the year is 29%. Assuming the enhanced gross-up of 38% and a federal dividend tax credit of 15.02%, how much federal tax will she pay on her dividend?

• A. $189.16
• B. $96.46
• C. $69.90
• D. $115.40

When can an individual legally start selling mutual funds?

• A. Upon successful completion of the proficiency examination
• B. Upon receipt of notification of registration from the securities administrator
• C. Upon filing a registration application and paying the required registration fee
• D. Upon completion of continuing education requirements

Saheed is a retiree who is considering splitting his pension income with his wife, Minu.
Which of the following outcomes may occur if he shares his pension benefits?

• A. Minu will be exposed to a pension adjustment (PA) if she receives income from his pension.
• B. Regardless of how much income each person reports, the total amount of income taxes will not change.
• C. This is a form of tax evasion and is therefore considered illegal based on income tax legislation.
• D. Whether the couple saves on income tax will be dependent on Minu ' s marginal tax rate.

Which of the following statements about pension adjustments (PA) is TRUE?

• A. They represent how much your pension will increase due to years of service.
• B. You will receive a PA whether you are in a defined contribution or a defined benefit pension plan.
• C. They increase your registered retirement savings plan (RRSP) room by the amount of the pension adjustment.
• D. They represent how much your pension is reduced due to market conditions.

David had $10,000 in his investment account with Dynamic Investments, a mutual funds dealer. On June 28, David wants to buy 500 units in ABC Canadian Dividend Fund that has a Net Asset Value Per Unit (NAVPU) of $14.10. His friend Robert suggests that he may get a better price if he used the strategy of dollar-cost averaging. David then instructs his Dealing Representative to place a purchase order for 100 units on the first of every month starting July 1st for the next 5 months.
The orders are executed at the following NAVPUs.
July 01, $14.00
Aug. 01, $14.50
Sep. 01, $15.00
Oct. 01, $14.25
Nov. 01, $16.50
Did David get a better purchase price following the dollar-cost averaging strategy compared to making a lump-sum purchase of 500 shares on Jun 28, 20xx?

• A. David got his 500 units at a higher price than the lump sum price he would have paid
• B. David realizes that Dollar cost averaging is the best strategy for getting lower prices.
• C. David got his 500 units at the same price as the lump sum price he would have paid.
• D. David got his 500 units at a lower price than the lump sum price he would have paid.