Personal Wealth Management Exam Bank
Course Introduction
Personal Wealth Management is an introductory course designed to equip students with essential knowledge and practical skills for effective financial planning and personal wealth accumulation. The course covers topics such as budgeting, saving strategies, investment vehicles, taxation, risk management, retirement planning, estate considerations, and insurance. Students will learn how to set financial goals, analyze various investment options, and develop comprehensive plans to achieve long-term financial security. Real-world case studies and interactive exercises emphasize decision-making in a dynamic economic environment, preparing students to responsibly manage their personal finances and build lasting wealth.
Recommended Textbook
Personal Finance 4th Canadian Edition by Jeff Madura
Available Study Resources on Quizplus
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
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9163
Sample Questions
Q1) If you invested $10 000 when you turned 20 years of age and received a return of 11 percent annually,you would have over two million dollars when you turned 70.
A)True
B)False
Answer: False
Q2) If the interest rate is zero,the future value interest factor equals A)0)0.
B)-1.0.
C)1)0.
D)Undefined
Answer: C
Q3) Naldo is considering selling a painting he inherited from his grandparents and which cost $200 when purchased 72 years ago.He accepted an offer for $22000 for it recently.What is the approximate annualized rate of return on this painting?
A)1)12%
B)2)75%
C)11.7%
D)6)75 %
Answer: D
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 1: Tools for Financial Planning - Planning with
Personal Financial Statements
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/9164
Sample Questions
Q1) Which of the following is the worst approach to solving the problem of an annual budget deficit?
A)Liquidate enough savings or investments to make up the deficit.
B)Get an additional credit card and cover the deficit with that.
C)Renegotiate debt to longer term,lower interest options.
D)Increase income by getting an additional part-time job.
Answer: B
Q2) One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.
A)True
B)False
Answer: True
Q3) A budget is
A)the same thing as a cash flow statement.
B)a method to measure net worth and monitor wealth.
C)an historical record of income and expenses.
D)a forecast of all items on the cash flow statement.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 1: Tools for Financial Planning - Using Tax Concepts for Planning
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/9165
Sample Questions
Q1) By what date must self-employed individuals file their income tax returns?
A)December 31
B)April 30
C)June 15
D)90 days after their fiscal year-end
Answer: C
Q2) Samantha filed her tax return on August 1st and paid her $4000 balance owing.If the prescribed interest rate is 5%,how much did she owe in total?
A)$4050
B)$4320
C)$4000
D)$4370
Answer: D
Q3) Knowledge of individual income taxes is somewhat relevant to financial planning.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 2: Managing Your Financial Resources - Banking
Services and Managing Your Money
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9170
Sample Questions
Q1) Which of the following is a Schedule II chartered bank?
A)National Bank
B)Citibank
C)HSBC
D)Scotiabank
Q2) Jeff put $50 into a chequing account with a balance of $600.He then withdrew funds using the ABM machine 14 times that month at a cost of $1.50 per withdrawal and wrote 12 cheques at a cost of $0.50 each.The account also has a monthly charge of five dollars.What are the total bank charges for the month?
A)$5.00
B)$27.00
C)$32.00
D)$33.50
Q3) 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.
Q4) A Canada Savings Bond is a typical investment in a money market fund.
A)True
B)False
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Managing Your Financial Resources -
Assessing,Managing and Securing Your Credit
Available Study Resources on Quizplus for this Chatper
98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/9171
Sample Questions
Q1) Posing as an employee of a financial institution to obtain information for purposes of identity theft is an example of pretexting.
A)True
B)False
Q2) A credit card charges 18 percent annual interest and Frank has $750 due on the statement date.He is only able to make the minimum payment of $22.50.If the billing cycle is 30 days and the grace period is 20 days,and he pays the full balance at the next due date,how much interest would he owe?
A)$10.76
B)$17.94
C)$28.70
D)$21.53
Q3) A house was purchased for $300 000 and has a market value of $325000 and a mortgage of $213000.The equity in this house is
A)$87 000.
B)34.5 percent.
C)$112 000.
D)$25 000.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 2: Managing Your Financial Resources -
Purchasing and Financing a
Home
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9172
Sample Questions
Q1) What is the best advice regarding mortgage financing?
A)Get a pre-approval certificate to guarantee your mortgage approval.
B)Let an expert choose the type and length of mortgage you will need.
C)Ensure the mortgage payments do not absorb all your excess income.
D)Select the maximum payments you can afford based on your cash flow.
Q2) Which of the following is most accurate in a case where a seller neglects to disclose a defect that affects the market value of the home they are selling?
A)It is morally repugnant,but commonly done and there is no legal recourse.
B)It is morally wrong,but is legal due to caveat emptor.
C)It is morally repugnant,and the seller could be charged for criminal negligence.
D)It is morally wrong,and the seller could be sued for misrepresentation.
Q3) Total mortgage financing of $968 per month,and monthly debt payments of $530,given total monthly household income of $3457 results in a gross debt service ratio of 28 percent.
A)True
B)False
Q4) Describe some of the advantages and disadvantages of selling your home yourself instead of hiring a realtor.
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Protecting Your Wealth - Auto and Homeowner's Insurance
Available Study Resources on Quizplus for this Chatper
88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/9173
Sample Questions
Q1) Comprehensive coverage insures Peter against damage to his car that results from something such as hail or vandalism.
A)True
B)False
Q2) In general,insurance companies generate their profit from
A)overestimating the value of client claims and keeping the difference as profit.
B)investing the proceeds of premiums until the funds are needed to cover claims.
C)selling a lot of certain kinds of highly profitable insurance products.
D)only insuring people who are low risk to claim.
Q3) Which is the best advice about shopping for car insurance in provinces where there are private insurers?
A)Shop online for insurance before you start to shop for a car.
B)Ask friends and family where to get the best rates.
C)Ask at the car dealership while waiting for the delivery of your car.
D)Use the agent recommended by the car dealer as prices rarely vary.
Q4) Drivers considered "high risk" cannot get automobile insurance at any price.
A)True
B)False
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Protecting Your Wealth - Health and Life Insurance
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/9174
Sample Questions
Q1) Jane and Joe each earn $55 000 and have estimated that over the next 20 years will need 60 percent of total income to manage debt,pay off the mortgage,and pay for children's postsecondary education.How much life insurance should they apply for? (Investment returns are 6 percent.)
A)$587 000
B)$1 320 000
C)$843 000
D)$757 000
Q2) Which of the following types of life insurance has a cash value component?
A)Term life
B)Dependant life
C)Whole life
D)Mortgage insurance
Q3) Universal life insurance is similar to whole life except it provides less guarantees. A)True
B)False
Q4) If used properly,term life insurance can be an effective estate planning tool.
A)True
B)False
10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Personal Investing - Investing Fundamentals
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/9175
Sample Questions
Q1) Many more shares of stock are traded daily on the primary market than on the secondary market.
A)True
B)False
Q2) Buying more of a stock that has just plummeted in value is an example of
A)averaging your cost base down.
B)purchasing stocks on sale.
C)dollar cost averaging.
D)taking excessive risk to recover from a losing position.
Q3) Savvy investors can find investments that generate high rates of return with low levels of risk.
A)True
B)False
Q4) For someone whose salary is $120 000,what type of investment income receives the lowest tax consequences?
A)Dividends
B)Interest
C)Capital gains
D)Trust income
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 4: Personal Investing - Investing in Stocks
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9176
Sample Questions
Q1) In deciding to invest in stocks,the most time-consuming Chapter is A)fundamental analysis.
B)choosing a broker.
C)the actual purchase of the stock.
D)monitoring results.
Q2) The dividend discount model method is used to value a stock based on a firm's ________ and is ________ at an appropriate rate of interest.
A)future dividend payments,compounded
B)future earnings,discounted
C)future earnings,compounded
D)future dividend payments,discounted
Q3) Venture capital refers to funds that investors are prepared invest in risky new businesses with growth potential.
A)True
B)False
Q4) For most firms,having slightly more short-term assets versus short-term liabilities would be considered a reasonable current ratio.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 4: Personal Investing - Investing in Bonds
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/9177
Sample Questions
Q1) You expect interest rates to rise in the short term.Your best strategy would be to
A)buy T-bills and keep rolling them over.
B)buy long bonds and use interest income to purchase higher yields.
C)buy short bonds only and keep rolling them over.
D)buy T-bills in anticipation of locking in higher rates after the increase.
Q2) Real return bonds have their par value and coupon payments adjusted by the consumer price index.
A)True
B)False
Q3) Bonds with a high degree of default risk are most susceptible to default when economic conditions are
A)strong.
B)weak.
C)stable.
D)expanding.
Q4) The bond par value or face value is the amount the investor will be paid when the bond matures.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 4: Personal Investing - Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/9166
Sample Questions
Q1) If an investor was concerned about the tax efficiency of their mutual fund,which type of mutual funds should they buy?
A)Open-end mutual funds
B)Close-end mutual funds
C)Front-end load mutual funds
D)Back-end load mutual funds
Q2) Which of the following is a stock mutual fund?
A)Asset allocation fund
B)Balanced growth and income
C)Mid-cap fund
D)Money market fund
Q3) Segregated funds are insurance products,but are similar to mutual funds as they offer a guarantee of as much as 100 percent of the funds invested upon maturity or the death of the owner.
A)True
B)False
Q4) A stock mutual fund that pays higher-than-normal dividends is called a growth fund.
A)True
B)False
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Retirement and Estate Planning - Retirement Planning
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9167
Sample Questions
Q1) On average,a final average earnings plan and a career average plan will generate the same level of pension income.
A)True
B)False
Q2) Sally can use the Home Buyers Plan (HBP)to withdraw $50 000 from her RRSP for a down payment on a home as long as it is her first home and she can pay it back in ten years.
A)True B)False
Q3) Even though you expect to receive OAS and CPP,a common rule of thumb is in order to be able to retire comfortably is
A)to save an additional 10 percent of gross earnings in a variety of pension investments.
B)to save at least 10 percent of after-tax earnings in retirement accounts.
C)to make sure you are in a long-term pension plan.
D)to maximize OAS and CPP and GIS.
Q4) A TFSA is not as good for retirement funding as an RRSP.
A)True B)False
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Retirement and Estate Planning - Estate Planning
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9168
Sample Questions
Q1) A legal document in which individuals specify their preferences in the event that they become mentally or physically disabled is called a(n)
A)enduring power of attorney.
B)living will.
C)durable power of attorney.
D)letter of wishes.
Q2) To create a valid will,an individual must be
A)financially viable.
B)mentally competent.
C)physically competent.
D)visually competent.
Q3) Minor changes to a will can be made with a simple document called a codicil.
A)True
B)False
Q4) If you get married,your will is cancelled in some provinces but not in others.
A)True
B)False
Q5) Discuss the characteristics and expertise you would look for in the person you want to appoint as your executor or attorney.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 6: Synthesis of Financial Planning - Integrating the
Components of a Financial Plan
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/9169
Sample Questions
Q1) Budgeting decisions involve a trade-off between spending today and allocating funds for the future.
A)True
B)False
Q2) Some large well-known firms pay no dividends,but most do.
A)True
B)False
Q3) Disability insurance protects your A)lifestyle.
B)income.
C)health.
D)assets.
Q4) A disadvantage of paying off your mortgage with all your remaining liquid funds is that
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.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Q5) List three types of financing you have studied and an important consideration about each one of them