Question 1

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 2

TFSAs allow you to withdraw funds tax free and then replace the funds,whenever you have more savings.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

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 5

The Canada Deposit Insurance Corporation (CDIC)insures

Accepted Answer

A) bank deposits and GICs to a specified limit. 
B) your chequing accounts for a small charge to the depositor. 
C) only guaranteed investment certificates. 
D) GICs,Canada Savings Bonds,and Canada Premium Bonds. 
A) bank deposits and GICs to a specified limit. 
B) your chequing accounts for a small charge to the depositor. 
C) only guaranteed investment certificates. 
D) GICs,Canada Savings Bonds,and Canada Premium Bonds.

Question 6

Depository institutions are financial institutions that accept deposits (that are insured up to a maximum level)from individuals or firms and provide loans.

Accepted Answer

A) True 
 B)False

Question 7

Since rates and fees differ only slightly between all national banks,there is little need to consider these when choosing your financial institution.

Accepted Answer

A) True 
 B)False

Question 8

The Canada Deposit Insurance Corporation insures money on deposit at

Accepted Answer

A) insurance companies. 
B) brokerage and securities dealers. 
C) chartered banks. 
D) all of the above. 
A) insurance companies. 
B) brokerage and securities dealers. 
C) chartered banks. 
D) all of the above.

Question 9

Mutual fund investments such as a money market fund are guaranteed by the CDIC.

Accepted Answer

A) True 
 B)False

Question 10

Certified cheques,money orders,and traveller's cheques lower risk for the payee.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a non-depository financial institution?

Accepted Answer

A) Credit union 
B) Trust company 
C) Investment dealer 
D) Caisse populaire 
A) Credit union 
B) Trust company 
C) Investment dealer 
D) Caisse populaire

Question 13

Kelly deposits $1000 in a three year GIC with four percent interest compounded annually.How much interest would she earn by maturity?

Accepted Answer

A) $124.86 
B) $120.00 
C) $ 40.00 
D) $1124.86 
A) $124.86 
B) $120.00 
C) $ 40.00 
D) $1124.86

Question 14

Finance companies should be the first place you go to try to get a loan because they specialize in financing.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true regarding guaranteed investment certificates (GICs)?

Accepted Answer

A) The longer the term,the lower the interest rate paid,all else equal. 
B) All banks offer the same rates on GICs. 
C) Early withdrawals of money are not subject to a penalty. 
D) Much higher interest rates (than competitors)would likely reflect higher risk. 
A) The longer the term,the lower the interest rate paid,all else equal. 
B) All banks offer the same rates on GICs. 
C) Early withdrawals of money are not subject to a penalty. 
D) Much higher interest rates (than competitors)would likely reflect higher risk.

Question 16

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.

Question 17

In general,when an investment is more liquid,the return you receive will be

Accepted Answer

A) lower. 
B) higher. 
C) less predictable. 
D) Liquidity does not affect return. 
A) lower. 
B) higher. 
C) less predictable. 
D) Liquidity does not affect return.

Question 18

Which of the following is a depository institution?

Accepted Answer

A) Manulife Securities 
B) Bank of Nova Scotia 
C) Capital One Bank 
D) RBC Insurance 
A) Manulife Securities 
B) Bank of Nova Scotia 
C) Capital One Bank 
D) RBC Insurance

Question 19

Mortgage companies pay more interest on deposits than a chartered bank.

Accepted Answer

A) True 
 B)False

Question 20

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

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

TFSAs allow you to withdraw funds tax free and then replace the funds,whenever you have more savings.

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.

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

The Canada Deposit Insurance Corporation (CDIC)insures

Depository institutions are financial institutions that accept deposits (that are insured up to a maximum level)from individuals or firms and provide loans.

Since rates and fees differ only slightly between all national banks,there is little need to consider these when choosing your financial institution.

The Canada Deposit Insurance Corporation insures money on deposit at

Mutual fund investments such as a money market fund are guaranteed by the CDIC.

Certified cheques,money orders,and traveller's cheques lower risk for the payee.

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

Which of the following is a non-depository financial institution?

Kelly deposits $1000 in a three year GIC with four percent interest compounded annually.How much interest would she earn by maturity?

Finance companies should be the first place you go to try to get a loan because they specialize in financing.

Which of the following is true regarding guaranteed investment certificates (GICs)?

Regarding TFSA accounts,which of the following is true?

In general,when an investment is more liquid,the return you receive will be

Which of the following is a depository institution?

Mortgage companies pay more interest on deposits than a chartered bank.

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 2: Managing Your Financial Resources - Banking Services and Managing Your Money

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

TFSAs allow you to withdraw funds tax free and then replace the funds,whenever you have more savings.

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.

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

The Canada Deposit Insurance Corporation (CDIC)insures

Depository institutions are financial institutions that accept deposits (that are insured up to a maximum level)from individuals or firms and provide loans.

Since rates and fees differ only slightly between all national banks,there is little need to consider these when choosing your financial institution.

The Canada Deposit Insurance Corporation insures money on deposit at

Mutual fund investments such as a money market fund are guaranteed by the CDIC.

Certified cheques,money orders,and traveller's cheques lower risk for the payee.

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

Which of the following is a non-depository financial institution?

Kelly deposits $1000 in a three year GIC with four percent interest compounded annually.How much interest would she earn by maturity?

Finance companies should be the first place you go to try to get a loan because they specialize in financing.

Which of the following is true regarding guaranteed investment certificates (GICs)?

Regarding TFSA accounts,which of the following is true?

In general,when an investment is more liquid,the return you receive will be

Which of the following is a depository institution?

Mortgage companies pay more interest on deposits than a chartered bank.

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