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Canadian Mutual Funds and Securities
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- Southern Alberta Institute Of Technology (SAIT )
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Chapter 1: Role of the Mutual Fund Representative1. Select the term used to refer to the potential fluctuations in returns or the range of possible future
outcomes in the price of a security.
a. Duration
b. Risk
c. Breadth
d. Variance
Risk is the potential volatility in returns or the range of possible future outcomes on the price of a
security.
2. Identify the individual responsible for helping clients to establish household budgets and savings goals.
a. Investment broker
b. Mutual fund sales representative
c. Mutual fund dealer
d. Financial planner
At the same time, there are limits to your role. Clients generally are looking for solutions to attain
financial goals through mutual fund offerings. However, your role does not extend to helping clients
with developing a financial plan through establishing household budgets, for example. This would be
the role of a financial planner.
3. Identify the person responsible for investments in a fund according to the fund’s policies and
objectives and based on a particular investing style.
a. Professional money managers
b. Financial planner
c. Mutual fund dealer
d. Mutual fund sales representative
Professional money managers manage the fund’s assets by investing the proceeds according to the
fund’s policies and objectives and based on a particular investing style.
4. Identify one of the criteria that must be evaluated in determining the suitability of an investment for a
client.
a. If investment is in primary or secondary distribution
b. Client’s investment objectives
c. Availability of a prospectus
d. Licensing status of salesperson
Suitability means ensuring that all recommendations take into account the client’s unique situation
and investment objectives.
5. Define the term that is used to refer to the requirement to follow all legal requirements and dealer
policies.
a. Legal responsibility
b. Ethical responsibility
c. Compliance
d. Licensing
Compliance means following the rules, whether those rules are legal requirements or dealer policies.
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