Question 1

Which of the following will not vary at a chartered bank?

Accepted Answer

A) Interest rates on similar GICs 
B) CDIC insurance amounts on accounts 
C) Interest rates charged on mortgages 
D) Service fees charged to different customers 
A) Interest rates on similar GICs 
B) CDIC insurance amounts on accounts 
C) Interest rates charged on mortgages 
D) Service fees charged to different customers

Question 2

Look up current rates on the web to compare and contrast the following investments: GIC,Canada Savings Bond,Canada Premium Bond,and money market funds.State the important investment features of each investment product,how they are likely to be used in managing your cash,and what financial institution you would purchase them from.Indicate which you feel would be best for you and justify your answer.

Accepted Answer

Based on interest rates,GICs > CPBs > CS

Question 3

Debit cards and credit cards both offer the benefit of short-term financing.

Accepted Answer

A) True 
 B)False

Question 4

A total of $80 in charges for writing an NSF cheque is a real possibility.

Accepted Answer

A) True 
 B)False

Question 5

An out-of-network ABM means

Accepted Answer

A) your debit card won't work. 
B) you will be charged one ABM fee. 
C) you will be charged fees by two ABM sponsors. 
D) the branch is the same institution but not your banking branch. 
A) your debit card won't work. 
B) you will be charged one ABM fee. 
C) you will be charged fees by two ABM sponsors. 
D) the branch is the same institution but not your banking branch.

Question 6

Angela is concerned about saving money for the future and taking advantage of TFSA and RRSP accounts.If she was able to save $500 a month for 40 years,and her marginal tax bracket was 36%,how much more would she have in her RRSP,versus her TFSA,versus saving the funds in an unsheltered investment account? Assume the investment choice was the same for each account and grew at an annual rate of 6%.
Show your work.

Accepted Answer

There are a number of assumptions that c

Question 7

Credit unions and caisses populaires are non-for-profit depository institutions that offer similar services as chartered banks,but only to members.

Accepted Answer

A) True 
 B)False

Question 8

John has overdraft protection which has a fee of five dollars per use and a 21 percent annual interest charge.NSF fees at his bank are $35.This month John's unexpected car expense caused his account to become overdrawn by $1200 for 14 days until his pay cheque was deposited.What was the total expense for John in this circumstance?

Accepted Answer

A) $35.00 
B) $70.00 
C) $14.67 
D) $9.67 
A) $35.00 
B) $70.00 
C) $14.67 
D) $9.67

Question 9

The difference between a bank and a trust company is that only the trust company can provide estate planning and administrative services.

Accepted Answer

A) True 
 B)False

Question 10

Banks pay more interest on chequing accounts than they do on savings account deposits.

Accepted Answer

A) True 
 B)False

Question 11

Describe how interest rates affect your personal budget,income statement,balance sheet,and choices when managing money and liquidity.What kinds of accounts do they affect? Give two specific examples.

Accepted Answer

This is a subjective answer.Interest rat

Question 12

Guaranteed investment certificates (GICs)with shorter maturity dates tend to pay higher interest rates than those with longer maturity dates.

Accepted Answer

A) True 
 B)False

Question 13

Jack has $2000 that he wishes to invest for the next two years.One-year GICs are currently paying eight percent while two-year GICs are paying 12 percent compounded annually.Economists are predicting that interest rates will rise by the end of the year.What is the minimum interest rate Jack would need in year two,to make the one-year GIC better than the two-year GIC?

Accepted Answer

A) 14.8 percent 
B) 16.2 percent 
C) 16.0 percent 
D) 16.8 percent 
A) 14.8 percent 
B) 16.2 percent 
C) 16.0 percent 
D) 16.8 percent

Question 14

Investments with a higher risk of default pay higher rates of interest than those that are less risky.

Accepted Answer

A) True 
 B)False

Question 15

Katie's overdraft fee was five dollars the interest rate 21 percent.When she wrote a cheque that put her account in a $5000 overdrawn position for two weeks,she still saved money compared with a $40 NSF fee.

Accepted Answer

A) True 
 B)False

Question 16

Which would be the least effective way to manage expenses when travelling internationally?

Accepted Answer

A) Credit card 
B) Money orders 
C) Traveller's cheques 
D) Debit card 
A) Credit card 
B) Money orders 
C) Traveller's cheques 
D) Debit card

Question 17

You are charged for writing an NSF cheque,but not the person you made the cheque payable to.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an advantage of using a debit card?

Accepted Answer

A) Your total banking expenses are likely to be lower. 
B) The overdraft protection is less expensive than borrowing from your credit card. 
C) They have lower transaction fees than credit cards. 
D) You have no risk of being charged for insufficient funds. 
A) Your total banking expenses are likely to be lower. 
B) The overdraft protection is less expensive than borrowing from your credit card. 
C) They have lower transaction fees than credit cards. 
D) You have no risk of being charged for insufficient funds.

Question 19

CIBC offers a GIC at eight percent compounded annually and TD Bank offers the same rate but it is compounded semi-annually.What will be the return in five years on each bank's GIC for a $1000 investment? Illustrate your calculation.

Accepted Answer

CIBC PV = 1000;%I = 8;PV = 0;N

Question 20

Regarding TFSA accounts,which of the following is True?

Accepted Answer

A) Using your TFSA for tuition savings makes sense as long as the funds are replaced before the next term. 
B) If your TFSA investment deposit grows from $5000 to $10 000 you can withdraw only the $5000 deposit tax free. 
C) Using a TFSA account for your everyday banking would be a good way to avoid paying tax on the interest from your bank account. 
D) Using a TFSA account to hold a cashable GIC for an emergency will mean you do not have to pay tax on the interest earned. 
A) Using your TFSA for tuition savings makes sense as long as the funds are replaced before the next term. 
B) If your TFSA investment deposit grows from $5000 to $10 000 you can withdraw only the $5000 deposit tax free. 
C) Using a TFSA account for your everyday banking would be a good way to avoid paying tax on the interest from your bank account. 
D) Using a TFSA account to hold a cashable GIC for an emergency will mean you do not have to pay tax on the interest earned.

Which of the following will not vary at a chartered bank?

Debit cards and credit cards both offer the benefit of short-term financing.

A total of $80 in charges for writing an NSF cheque is a real possibility.

An out-of-network ABM means

Credit unions and caisses populaires are non-for-profit depository institutions that offer similar services as chartered banks,but only to members.

The difference between a bank and a trust company is that only the trust company can provide estate planning and administrative services.

Banks pay more interest on chequing accounts than they do on savings account deposits.

Describe how interest rates affect your personal budget,income statement,balance sheet,and choices when managing money and liquidity.What kinds of accounts do they affect? Give two specific examples.

Guaranteed investment certificates (GICs)with shorter maturity dates tend to pay higher interest rates than those with longer maturity dates.

Investments with a higher risk of default pay higher rates of interest than those that are less risky.

Katie's overdraft fee was five dollars the interest rate 21 percent.When she wrote a cheque that put her account in a $5000 overdrawn position for two weeks,she still saved money compared with a $40 NSF fee.

Which would be the least effective way to manage expenses when travelling internationally?

You are charged for writing an NSF cheque,but not the person you made the cheque payable to.

Which of the following is an advantage of using a debit card?

CIBC offers a GIC at eight percent compounded annually and TD Bank offers the same rate but it is compounded semi-annually.What will be the return in five years on each bank's GIC for a $1000 investment? Illustrate your calculation.

Regarding TFSA accounts,which of the following is True?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 5: Managing Your Financial Resources - Banking Services and Managing Your Money

Which of the following will not vary at a chartered bank?

Debit cards and credit cards both offer the benefit of short-term financing.

A total of $80 in charges for writing an NSF cheque is a real possibility.

An out-of-network ABM means

Credit unions and caisses populaires are non-for-profit depository institutions that offer similar services as chartered banks,but only to members.

The difference between a bank and a trust company is that only the trust company can provide estate planning and administrative services.

Banks pay more interest on chequing accounts than they do on savings account deposits.

Describe how interest rates affect your personal budget,income statement,balance sheet,and choices when managing money and liquidity.What kinds of accounts do they affect? Give two specific examples.

Guaranteed investment certificates (GICs)with shorter maturity dates tend to pay higher interest rates than those with longer maturity dates.

Investments with a higher risk of default pay higher rates of interest than those that are less risky.

Katie's overdraft fee was five dollars the interest rate 21 percent.When she wrote a cheque that put her account in a $5000 overdrawn position for two weeks,she still saved money compared with a $40 NSF fee.

Which would be the least effective way to manage expenses when travelling internationally?

You are charged for writing an NSF cheque,but not the person you made the cheque payable to.

Which of the following is an advantage of using a debit card?

CIBC offers a GIC at eight percent compounded annually and TD Bank offers the same rate but it is compounded semi-annually.What will be the return in five years on each bank's GIC for a $1000 investment? Illustrate your calculation.

Regarding TFSA accounts,which of the following is True?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters