Segregated Funds Annuities Mock Exam

Segregated Funds & Annuities Mock Exam Latest Update - Questions and 100% Verified Correct Answers Guaranteed A+

Accumulation Annuity - CORRECT ANSWER: Members of a GRRSP may be provided

with the investment option of an accumulation annuity for their savings. The annuity pays guaranteed interest for a fixed term or a date specified by the investor. Members may also be given the payout option in the form of a term or life annuity when the contribution terminates. The only investment option is the accumulation annuity.

The accumulation annuity contract requires its owner to make choices that centre on its role as an investment and the term for investment. Designating where and when the payments are to be received is not necessary until the policyholder begins to receive the annuity payments. A POA is a good idea but not required.

Adjusted Cost base - CORRECT ANSWER: The adjusted cost base of an account is

the sum of the principal deposited minus the principal withdrawn plus allocations.

Advanced Deferred Life Annuity (ADLA) - CORRECT ANSWER: A lifetime limit of 25%

of the value of the qualifying plan, to a total of $150,000 applies to ALDA purchases.The ALDA has the ability to defer payments until the end of the year in which the annuitant reaches 85. Therefore, the ALDA addresses longevity risk and ensures that investors with an RRIF do not deplete their savings prematurely during retirement.

Agent Expectations - CORRECT ANSWER: The agent is expected to meet all

expectations of the carrier for volume of business, client contact, accuracy in dealing with the carrier and clients, and necessary record keeping.

Annuity Advantages - CORRECT ANSWER: An annuity offers several advantages that

are not available when investing in a mutual funds RRIF:

Investment concept is simple to understand Securities for income can be adjusted to suit the client Creditor protection Estate planning benefits Annuitant protection from Assuris

Assuris - CORRECT ANSWER: Assuris provides a 100% guarantee if the guaranteed

amount is $60,000 or less. For guaranteed amounts greater than $60,000, Assuris provides a guarantee that is equal to the greater of 85% of the guaranteed amount or

$60,000.

Balanced Funds - CORRECT ANSWER: Balanced funds are also known as balanced

growth or balanced income funds. A balanced growth fund emphasizes stocks. A balanced income fund emphasizes bonds. A balanced income fund would invest in 1 / 2

more bonds than equities, providing mostly income, but some growth. A balanced growth fund would primarily provide growth with some income, while a small-cap fund would provide only growth and a money market fund would provide minimal income and no growth.

Cancellation of Segregated Fund Contract - CORRECT ANSWER: An investor may

cancel or rescind the segregated fund contract in writing within the specific time limitation set by the insurer providing the contract. Two days is the usual length of time permitted. The investor receives the lesser of the amount of premium paid or value of fund units on that date if it is a valuation date. If it is not a valuation date, then the value on the next valuation date applies.

Deferred Profit Sharing Plan (DPSP) - CORRECT ANSWER: Deferred Profit Sharing

Plan (DPSP) cannot be withdrawn with the Home Buyers Plan (HBP), and a withdrawal from the DPSP would trigger income taxes.

Defined Contribution Pension Plan (DCPP) - CORRECT ANSWER: Because the money

in the DCPP is locked in, it can only be transferred into another locked-in account or left in the current DCPP.

A variable payment life annuity is an option for members of a DCPP.

Equity Fund - CORRECT ANSWER: The equity fund is invested in small-cap equities

and would be likely to not pay income. The returns would more likely be capital gains, which are taxed at a lower rate.

Exchange-Traded Funds - CORRECT ANSWER: There are many advantages of ETFs

which include:

Diversification; Convenience of trading like stocks; High degree of transparency with holdings disclosed daily; Lower MER than mutual funds and segregated funds; No sales load; Professional management; Ability to react rapidly to market developments and speculation on short-term price movements; Ability for advanced trading transactions such as limit, stop loss, margin and short sale orders, options, and sector rotation; Exposure to commodities provided to small investors.

Front-End Load (FEL) - CORRECT ANSWER: An investor who switches funds where

each fund charges the same load, such as a front-end load (FEL), will not incur a fee for the switch. However, there may be a fee for switching between funds with dissimilar loads, such as switching from funds with a deferred sales charge (DSC) to funds with an FEL.

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