Question 1

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. C

Question 2

A TFSA and a Term Deposit are essentially the same thing.

Accepted Answer

A) True 
 B)False  False

Question 3

Schedule I,II and III banks offer essentially the same services.

Accepted Answer

A) True 
 B)False  False

Question 4

An example of a depository financial institution is an insurance company.

Accepted Answer

A) True 
 B)False

Question 5

The type of financing that allows you to pay for purchases at a later time with no interest charged is

Accepted Answer

A)  a credit card.
B)  a debit card.
C)  an expense account.
D)  a line of credit.

Question 6

Bank fees for using an automatic banking machine (ABM)are not usually a significant consideration in choosing a bank with which to do business.

Accepted Answer

A) True 
 B)False

Question 7

You have $3000 saved in case you may need to replace the furnace in your house which has been acting up.Which of the following would be the best place to put the $3000?

Accepted Answer

A)  A one-year fixed-rate GIC earning four percent
B)  A stock mutual fund which earned nine percent in the past year
C)  A TFSA cashable term deposit earning three percent
D)  A high interest savings account earning three percent

Question 8

Rashid's monthly expenses are $4000 and he expects that his cash flow will always be sufficient to cover his expenses.How much should he ideally have in his emergency fund?

Accepted Answer

A)  $12 000 using a combination of liquid investments and access to credit
B)  $24 000 because it is always best to be safe
C)  None,but he needs a $24 000 limit on his credit card
D)  $12,000 invested in two- to three-year GICs to earn a higher return

Question 9

Mortgage companies

Accepted Answer

A)  take deposits,savings,and term deposits and lend the money to home buyers.
B)  act as intermediaries to provide mortgages for home buyers.
C)  facilitate the purchase and sale of mortgages.
D)  allow individual investors to achieve higher returns by direct investment in mortgages.

Question 10

Research two financial institutions on the web and compare them based on important factors you should consider when choosing a financial institution.What advantages do they each give to students? How does that change once one is no longer a student? Indicate and justify which institution you feel would be better for you.Cite your sources.

Accepted Answer

The answer of Research two financial institutions on the web...

Question 11

If you were taking out a personal loan,the highest rate would probably be charged by a

Accepted Answer

A)  commercial bank.
B)  finance company.
C)  caisse populaire.
D)  credit union.

Question 12

The key feature that makes Canada Savings Bonds better than Canada Premium Bonds is

Accepted Answer

A)  they are virtually risk free.
B)  they are cashable at any time.
C)  they are on sale all year.
D)  they pay a higher rate of interest.

Question 13

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.

Question 14

Non-depository institutions that provide insurance to protect individuals or firms against possible adverse events are called

Accepted Answer

A)  finance companies.
B)  securities firms.
C)  insurance companies.
D)  investment companies.

Question 15

Financial institutions loan funds at

Accepted Answer

A)  lower interest rates than depositors receive.
B)  higher interest rates than depositors receive.
C)  rates similar to what savers receive.
D)  prime plus three percent.

Question 16

Non-depository institutions provide banking services,but their deposits are not CDIC insured.

Accepted Answer

A) True 
 B)False

Question 17

Deposits in commercial banks that are members of the CDIC are insured up to a maximum of $50 000 per account.

Accepted Answer

A) True 
 B)False

Question 18

Lorenzo is deciding between two banks for his chequing account.Thrift Bank requires a minimum deposit of $100,charges a monthly fee of eight dollars,plus $0.50 per cheque.Merchants Bank also requires a minimum deposit of $100,charges no monthly fee,but charges $1.00 per cheque.How many cheques would Lorenzo need to write each month to make Thrift Bank less expensive to use than Merchants Bank?

Accepted Answer

A)  16 cheques
B)  8 cheques
C)  24 cheques
D)  12 cheques

Question 19

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 20

A Canada Savings Bond is a typical investment in a money market fund.

Accepted Answer

A) True 
 B)False

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

The Canada Deposit Insurance Corporation insures money on deposit at

A TFSA and a Term Deposit are essentially the same thing.

Schedule I,II and III banks offer essentially the same services.

An example of a depository financial institution is an insurance company.

The type of financing that allows you to pay for purchases at a later time with no interest charged is

Bank fees for using an automatic banking machine (ABM)are not usually a significant consideration in choosing a bank with which to do business.

You have $3000 saved in case you may need to replace the furnace in your house which has been acting up.Which of the following would be the best place to put the $3000?

Rashid's monthly expenses are $4000 and he expects that his cash flow will always be sufficient to cover his expenses.How much should he ideally have in his emergency fund?

Mortgage companies

If you were taking out a personal loan,the highest rate would probably be charged by a

The key feature that makes Canada Savings Bonds better than Canada Premium Bonds is

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

Non-depository institutions that provide insurance to protect individuals or firms against possible adverse events are called

Financial institutions loan funds at

Non-depository institutions provide banking services,but their deposits are not CDIC insured.

Deposits in commercial banks that are members of the CDIC are insured up to a maximum of $50 000 per account.

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

A Canada Savings Bond is a typical investment in a money market fund.