Question 1

Discuss how financial planning principles will help you solve the following challenges.
a)Getting married sooner than expected
b)Starting a family
c)Having a high-paid job that causes ongoing stress
d)Having to change careers

Accepted Answer

The answer of Discuss how financial planning principles will help...

Question 2

The first component in creating a financial plan is

Accepted Answer

A) preparing a budget. 
B) setting up a brokerage account. 
C) starting an emergency fund. 
D) figuring out your goals.

Question 3

Which of the following investments achieves the greatest diversification?

Accepted Answer

A) Ten international stocks 
B) A TSX ETF 
C) A balanced mutual fund 
D) A GIC

Question 4

The best schedule for the order of the components of your financial plan would be

Accepted Answer

A) budgeting and tax planning,managing liquidity,financing large purchases,insurance,investing and estate planning. 
B) tax planning,managing liquidity,budgeting,financing large purchases,insurance,investing and estate planning. 
C) managing liquidity,budgeting and tax planning,financing large purchases,insurance,investing and estate planning. 
D) budgeting and tax planning,financing large purchases,managing liquidity,insurance,investing and estate planning.

Question 5

Which of the following accounts offers tax deferral,tax sheltering,and tax deduction for contributions?

Accepted Answer

A) Only TFSA 
B) RRSP and TFSA 
C) Only RRSP 
D) RRSP and RESP

Question 6

Debt is dangerous and should be avoided at costs.

Accepted Answer

A) True 
 B)False

Question 7

Some large well-known firms pay no dividends,but most do.

Accepted Answer

A) True 
 B)False

Question 8

What is meant by the financing trade-off?

Accepted Answer

A) Financing is a necessary evil and people today could not live without it. 
B) Financing enables people to get what they want faster but encourages greed. 
C) Borrowing can slow the growth of your net worth if it is for depreciating assets. 
D) Borrowing is an important tool but it can cause budgeting problems.

Question 9

Stocks of small firms are more volatile than those of large firms and might not be liquid.

Accepted Answer

A) True 
 B)False

Question 10

No financial plan is complete if it does not include a will.

Accepted Answer

A) True 
 B)False

Question 11

What are four types of financial investment accounts and indicate the likely purposes they would have in your financial plan?

Accepted Answer

The answer of What are four types of financial investment...

Question 12

Trust agreements in financial plans are normally are used for

Accepted Answer

A) wills. 
B) powers of attorney. 
C) financial security. 
D) estate planning.

Question 13

There are only three ways to get funds from your RRSP without paying tax on 100 percent of the withdrawal: the HBP,LLP and RRIF.

Accepted Answer

A) True 
 B)False

Question 14

A disadvantage of paying off your mortgage with all your remaining liquid funds is that

Accepted Answer

A) you likely make higher interest with your liquid funds. 
B) you could incur an unanticipated expense you cannot pay. 
C) you might not be able to qualify for another loan. 
D) early repayment could damage your credit rating.

Question 15

It would be advisable to make additional loan payments if the interest rate is eight percent,rather than investing in short-term interest-bearing securities offering four percent.

Accepted Answer

A) True 
 B)False

Question 16

To budget for savings or retirement,you need positive cash flows.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements about insurance is true?

Accepted Answer

A) The most important things to insure are your fixed assets. 
B) Money used to buy insurance is wasted because you cannot invest it. 
C) You cannot have too much insurance. 
D) It should be given priority before you start investing.

Question 18

Disability insurance protects your

Accepted Answer

A) lifestyle. 
B) income. 
C) health. 
D) assets.

Question 19

Even though insurance costs reduce your cash flow,insurance could have a larger impact on your net worth than its cost.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following should you do first?

Accepted Answer

A) Save for retirement 
B) Pay off loans 
C) Make a budget 
D) Purchase insurance

Exam 6: Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Discuss how financial planning principles will help you solve the following challenges. a)Getting married sooner than expected b)Starting a family c)Having a high-paid job that causes ongoing stress d)Having to change careers

The first component in creating a financial plan is

Which of the following investments achieves the greatest diversification?

The best schedule for the order of the components of your financial plan would be

Which of the following accounts offers tax deferral,tax sheltering,and tax deduction for contributions?

Debt is dangerous and should be avoided at costs.

Some large well-known firms pay no dividends,but most do.

What is meant by the financing trade-off?

Stocks of small firms are more volatile than those of large firms and might not be liquid.

No financial plan is complete if it does not include a will.

What are four types of financial investment accounts and indicate the likely purposes they would have in your financial plan?

Trust agreements in financial plans are normally are used for

There are only three ways to get funds from your RRSP without paying tax on 100 percent of the withdrawal: the HBP,LLP and RRIF.

A disadvantage of paying off your mortgage with all your remaining liquid funds is that

It would be advisable to make additional loan payments if the interest rate is eight percent,rather than investing in short-term interest-bearing securities offering four percent.

To budget for savings or retirement,you need positive cash flows.

Which of the following statements about insurance is true?

Disability insurance protects your

Even though insurance costs reduce your cash flow,insurance could have a larger impact on your net worth than its cost.

Which of the following should you do first?