IFIC Mutual Funds Licensing Practice Exam · Question
A client has a very high-risk tolerance and is seeking aggressive capital growth over a long-term horizon. Which type of fund would generally be LEAST suitable for this client?
Canadian Money Market Funds are designed for capital preservation and liquidity, offering very low risk and minimal growth. For a client seeking aggressive grow
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Question: A client has a very high-risk tolerance and is seeking aggressive capital growth over a long-term horizon. Which type of fund would generally be LEAST suitable for this client?
Answer options:
- Sector-Specific Equity Fund (e.g., Technology)
- Emerging Markets Equity Fund ✅ Canadian Money Market Fund
- Small-Cap Growth Equity Fund
Correct answer: Canadian Money Market Fund
Explanation: Canadian Money Market Funds are designed for capital preservation and liquidity, offering very low risk and minimal growth. For a client seeking aggressive growth with high risk tolerance, a money market fund would be entirely unsuitable, as it would not meet their primary objective. The other options are high-risk/high-growth.
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