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1. Sofi purchases $5,000 worth of units in the Paws Mutual Fund. Over a two-year period, Sofi receives and re-invests dividends that result in her receiving an additional $1,000 in units plus $125 in cash. At the end of two years, the total value of Sofis portfolio grows to $7,225. What is the new adjusted cost base (ACB) associated with Sofis investment in Paws Mutual Fund?

$1,100

$2,225

$5,000

$6,125

2. When must the Fund Facts mutual fund disclosure document be distributed to a client purchasing units in a mutual fund?

Within 48 hours after the confirmation of the purchase is received

With the confirmation of the purchase

Prior to the purchase

On request

3. Daniella purchased 100 mutual fund units on April 1st at a price of $50 per unit. There was a distribution of $5.00 per unit, paid out in the form of capital gains, on December 31st. After this distribution, the total value of Daniellas account was $10,500. Assume that Daniella is subject to a 40% marginal tax rate. How much tax is Daniella required to pay to Canada Revenue Agency as a result of this distribution?

$500

$250

$200

$100

4. Diana is a successful investor with annual income that makes her subject to a income tax rate of 45%. On January 1st of this year, she bought 100 units of a mutual fund at $20 per unit in a non-registered investment account (ie. fully taxable). Later in the year, she received a capital gains distribution from the mutual fund company of $1.50 per unit. On December 31st of this year, Diana sold her 100 units at a price of $30 per unit. How much income tax does Diana owe to the Canada Revenue Agency related to Dianas sale of her mutual fund units?

$345.00

$388.13

$258.75

$517.50

5. INK Inc. pays an annual dividend of $2.34 per common share. What impact will a rising share price have on INK's dividend yield?

Dividend yield will fall

Dividend yield will rise

Dividend yield will adjust to the risk-free rate

Dividend yield is not affected by changes in the share price

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