IFIC Mutual Funds Licensing Practice Exam · Question
A mutual fund that primarily invests in Canadian government and high-quality corporate bonds is designed for which primary objective?
Bond funds, especially those investing in government and high-quality corporate bonds, prioritize current income and capital preservation due to the relatively
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Question: A mutual fund that primarily invests in Canadian government and high-quality corporate bonds is designed for which primary objective?
Answer options:
- Aggressive capital growth. ✅ High current income and capital preservation.
- Exposure to emerging markets.
- Speculation on commodity prices.
Correct answer: High current income and capital preservation.
Explanation: Bond funds, especially those investing in government and high-quality corporate bonds, prioritize current income and capital preservation due to the relatively stable nature of these securities. They are not typically used for aggressive growth or speculation.
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