Money Management
Midterm Exam
Course Introduction
Money Management is a foundational course designed to equip students with practical skills and knowledge for effective personal financial planning. The course covers essential topics such as budgeting, saving, investing, credit use, debt management, and financial goal setting. Through real-life scenarios and interactive assignments, students learn to make informed financial decisions, analyze financial risks and opportunities, and develop strategies to achieve both short-term and long-term financial security. By the end of the course, students will possess the tools necessary to manage their finances responsibly and confidently in a rapidly changing economic environment.
Recommended Textbook
Personal Finance 4th Canadian Edition by Jeff Madura
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15 Chapters
1325 Verified Questions
1325 Flashcards
Source URL: https://quizplus.com/study-set/496
Page 2
Chapter 1: Tools for Financial Planning - Applying Time
Value Concepts
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86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9163
Sample Questions
Q1) You make regular monthly life insurance payments at the end of each month.This is an example of an annuity due.
A)True
B)False
Answer: False
Q2) An antique was originally purchased 50 years ago for $2 and today is worth $600.What is the approximate annual rate of return realized on the sale of this antique?
A)18 percent
B)12 percent
C)9 percent
D)13 percent
Answer: B
Q3) To convert the table from ordinary annuity to annuity due is to multiple the annuity payment by (1+ i).
A)True
B)False
Answer: True
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Page 3
Chapter 1: Tools for Financial Planning - Planning with
Personal Financial Statements
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101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/9164
Sample Questions
Q1) Household assets include jewelry and furniture and should be valued at their original cost.
A)True
B)False
Answer: False
Q2) This month Jill received $1000 income from her job and $200 in stock dividends.Her expenses were rent and utilities of $300 and $300 on groceries and $200 on clothing.Which of the following is true?
A)Jill has a net cash flow of $400.
B)Jill has net expenses of $400.
C)Jill has a net cash flow of $200.
D)Jill has net income of $400.
Answer: A
Q3) Someone with a monthly income of $5000,$5000 in their checking account and monthly expenses of $5000 would have Liquidity Ratio of 2.
A)True
B)False
Answer: False
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Chapter 1: Tools for Financial Planning - Using Tax Concepts for Planning
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89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/9165
Sample Questions
Q1) Which of the following income is taxable income?
A)Insurance benefits
B)Inheritances
C)Scholarship income
D)Tips received
Answer: D
Q2) RRSP rules limit a taxpayer's contributions to the higher of 18 percent of total income to a maximum amount of $25 000.
A)True
B)False
Answer: False
Q3) Your earnings for last year were $42 000.How much of an RRSP contribution can you make this year (if you have no other RRSP room)?
A)$5670
B)$4200
C)$7560
D)Insufficient information
Answer: C
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Chapter 2: Managing Your Financial Resources - Banking
Services and Managing Your Money
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86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9170
Sample Questions
Q1) Non-depository institutions provide banking services,but their deposits are not CDIC insured.
A)True B)False
Q2) Because they have lower overhead,web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.
A)True
B)False
Q3) Mutual fund investments such as a money market fund are guaranteed by the CDIC. A)True B)False
Q4) Investments with a higher risk of default pay higher rates of interest than those that are less risky.
A)True B)False
Q5) The interest on a Canada Savings Bond is not taxable as long as it is reinvested into the bond.
A)True B)False
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Chapter 2: Managing Your Financial Resources -
Assessing,Managing and Securing Your Credit
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98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/9171
Sample Questions
Q1) Manipulating email viruses and host files to redirect users from legitimate commercial websites to bogus websites to obtain log-in names and passwords is referred to as
A)pharming.
B)phishing.
C)skimming.
D)trolling.
Q2) Posing as an employee of a brokerage firm to obtain information to allegedly update your account information is an example of A)phishing.
B)pharming.
C)pretexting.
D)skimming.
Q3) If you were charged the maximum legal rate of interest on a $1000 loan for one year,the interest cost would be $60.
A)True
B)False
Q4) Discuss six of the choices to be made when making a decision between leasing and buying a car with a personal loan.
To
Chapter 2: Managing Your Financial Resources -
Purchasing and Financing a
Home
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86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9172
Sample Questions
Q1) A house valued at $288 000 with a down payment of $63 000 will result in an extra charge for a high ratio mortgage.
A)True
B)False
Q2) For a $72 000 mortgage at nine percent,the monthly payments would be $730 for a 15-year mortgage and $579 for a 30-year mortgage.What would be the expected total savings in interest by taking a 15-year mortgage?
A)$27 180
B)$54 360
C)$77 040
D)$131 000
Q3) Which of the following would be the best advice in a decision to buy or rent a house?
A)You should objectively perform the financial assessment.
B)If mortgage payments are more than renting,then you should rent.
C)Buying is always better because of the equity you get in the long term.
D)If interest costs are less than renting,then you should buy.
Q4) Describe some of the advantages and disadvantages of selling your home yourself instead of hiring a realtor.
Page 8
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Chapter 3: Protecting Your Wealth - Auto and Homeowner's Insurance
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88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/9173
Sample Questions
Q1) Insurance protects you against potential financial losses or liability that results from unexpected events.
A)True
B)False
Q2) Which of the following is the best case for the need for third Chaptery liability insurance coverage?
A)You cause a car accident and damage your Honda Civic.
B)You cause a car accident and destroy the other driver's Maserati.
C)You cause a car accident which disables a pedestrian.
D)You cause a car accident and the injuries cause you to miss six months of work.
Q3) Some credit cards provide you with collision and comprehensive insurance benefits if you use that card to pay for car rentals.
A)True
B)False
Q4) Collision coverage is normally limited to the car itself and not to items that were damaged while in the car.
A)True
B)False
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Chapter 3: Protecting Your Wealth - Health and Life Insurance
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95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/9174
Sample Questions
Q1) Employment Insurance (EI)does not provide adequate coverage for a long-term disability because
A)it provides benefits for only a 15-week period.
B)it provides only 20 percent of regular income for the insured.
C)it takes a long time to process the application.
D)it is only payable in extreme cases of disability.
Q2) Which of the following is true about disability insurance?
A)For most people,their emergency fund would look after them if they became disabled. B)Most people have excellent disability insurance coverage from their group insurance at work.
C)People under age 35 recover quickly and are less likely to become disabled than older people.
D)Becoming disabled could be more financially devastating than losing your home.
Q3) The problem with the cash value built up in a whole life insurance policy is that the money can only be used to pay off the policy or buy additional insurance.
A)True
B)False
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Page 10
Chapter 4: Personal Investing - Investing Fundamentals
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89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/9175
Sample Questions
Q1) You have invested $16 000.How long it will approximately take to accumulate $100000 at the fairly conservative rate of 6 percent?
A)38 years
B)34 years
C)28 years
D)31 years
Q2) If the market value for ABC Ltd.is $70000000 and its number of shares outstanding is $35555555 ,the value of stock per share is
A)$19.69.
B)$1.969.
C)$196.90.
D)Insufficient information to answer this question
Q3) The market for newly issued securities and initial public offerings (IPOs)is the A)initial market.
B)open market.
C)primary market.
D)secondary market.
Q4) You have been given an overview of stocks,bonds,and mutual funds.Give one advantage and one disadvantage of investing in each of these.
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Chapter 4: Personal Investing - Investing in Stocks
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84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9176
Sample Questions
Q1) A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.
A)True
B)False
Q2) To evaluate the liquidity of a firm,you should look at the A)current ratio.
B)debt ratio.
C)inventory turnover.
D)return on net assets.
Q3) Low interest rates tend to entice investors into the stock market where they can achieve better returns.
A)True
B)False
Q4) When reviewing a corporate income statement,to find gross profit,cost of goods sold is subtracted from A)revenue.
B)net income.
C)earnings before interest and taxes.
D)operating expenses.
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Chapter 4: Personal Investing - Investing in Bonds
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86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9177
Sample Questions
Q1) Bonds are issued with a call feature when the issuers expect interest rates to rise.
A)True
B)False
Q2) Given the following bond information: Issuer coupon maturity price yield
Bombardier 7.350 2024-Dec-22 107.00 6.56
What would be the taxable income on this bond if it were purchased at this price on December 20th and sold a year later for a price of 103.00? Assume face value of $10 000 and a semi-annual coupon payment.
A)Taxable capital gain of $400 and interest of $735
B)Taxable capital loss of $400 and interest of $735
C)Taxable capital loss of $200 and interest of $735
D)Taxable capital gain of $200 and interest of $656
Q3) When the economic conditions are weak,bonds with higher default risk become more susceptible.
A)True
B)False
Q4) A retractable bond pays a lower interest rate,all else equal.
A)True
B)False
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Chapter 4: Personal Investing - Investing in Mutual Funds
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85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/9166
Sample Questions
Q1) Three and a half years ago you purchased 1200 units of a fund with a NAV of $16.75.The NAV is now $34.50 and the fund had a 6 percent redemption fee declining at 1 percent per year and based on the value of the holdings at the time of the transaction.What will be the proceeds if you sell it today?
A)$38 744
B)$41 400
C)$40 158
D)$40 797
Q2) For mutual funds,the net asset value (NAV)is reported
A)on an hourly basis.
B)on a daily basis.
C)monthly on the close of the last Friday.
D)weekly on Fridays just after market close.
Q3) Which of the following uses the most risky strategies?
A)Sector funds
B)Hedge funds
C)Segregated funds
D)Small-Cap funds
Q4) List considerations you should take into account when purchasing a mutual fund.
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Chapter 5: Retirement and Estate Planning - Retirement Planning
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84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9167
Sample Questions
Q1) Pending rule changes from the government will require you to be 67 years old (instead of 65)before you can begin collecting Old Age Security retirement benefits.
A)True
B)False
Q2) The combination of Old Age Security and the Canada Pension plan provide sufficient income to support the retirement lifestyle of most individuals.
A)True
B)False
Q3) How much you can contribute to your RRSP depends on your
A)earned income from the current year.
B)tax bracket and previous contributions.
C)accumulated room and the performance of your RRSP holdings.
D)earned income and pension adjustments from previous years.
Q4) The Lifelong Learning Plan (LLP)allows full-time students to withdraw $20 000 per year for two years from their RRSPs to finance their educations.
A)True
B)False
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Chapter 5: Retirement and Estate Planning - Estate Planning
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84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9168
Sample Questions
Q1) If a spouse dies intestate all their assets will transfer to the surviving spouse.
A)True
B)False
Q2) When a testator dies in December,the tax return must be filed
A)three months after the estate is settled.
B)by December 31st in the year after death.
C)by June 30th of the following year.
D)by April 30th of the following year.
Q3) When considering holding assets as joint ownership with rights of survivorship for estate planning purposes,it is important to understand
A)that capital gains taxes will be deferred on this transaction until the survivor passes.
B)how the spousal roll-over rules will impact capital gains taxation.
C)the implications of giving up your decision making power over the asset.
D)that naming a child as a joint owner of your principal residence will trigger capital gains taxes.
Q4) Explain the differences between and the importance of using continuing and non-continuing forms of a power of attorney in estate planning.
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Chapter 6: Synthesis of Financial Planning - Integrating the
Components of a Financial Plan
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84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9169
Sample Questions
Q1) Withdrawals of interest from a TFSA are A)tax favoured.
B)taxable.
C)tax-deductible.
D)tax-free.
Q2) Even though insurance costs reduce your cash flow,insurance could have a larger impact on your net worth than its cost.
A)True
B)False
Q3) Which of the following statements about insurance is true?
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.
Q4) To increase your net worth,you should
A)pay off a loan with cash flow.
B)spend all cash remaining in your budget.
C)invest in household assets.
D)buy a luxury car.
17
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