Segregated Funds & Annuities - Chapter 1 with Answers
A client wants to ensure the full original
A GIC
investment will be repaid, plus a profit.
What would be an appropriate recom-
(Reference: Chapter 1)
mendation for this client?
Mary owns stock in a US-based com-
Interest.
pany which trades on the Nasdaq ex-
change. Mary receives a dividend from
(Reference: Chapter 1)
her stock. How is the dividend taxed?
What type of risk refers to the possibility
Market risk.
that the total financial market could de-
cline due to an uncontrollable event such
(Reference: Chapter 1)
as a natural disaster?
Steve is a real estate investor, while
Liquidity risk.
Sarah invests in mutual funds. What risk
would likely pose a threat to Steve, but
(Reference: Chapter 1)
not Sarah?
The price paid for a bond on the open
market, expressed as a factor of dollars
per $100 of the face amount. What does bond price refer to?
(Reference: Chapter 1)
A credit that reduces income tax owed
by individual taxpayers on dividends re-
ceived from qualifying Canadian corpo-
What is the dividend tax credit?
rations.
(Reference: Chapter 1)
FV is the value of today's sum of money
at a future date, based on a specified
What does the future value (FV) of mon-
rate of return.
ey refer to?
(Reference: Chapter 1)
The impact of the increase in the Con-
sumer Price Index, over time, on the buy- What is inflation?
ing power of the dollar.
1/6
, Segregated Funds & Annuities - Chapter 1 with Answers
(Reference: Chapter 1)
A risk in which inflation erodes the val-
ue of returns and purchasing power is
diminished over time. What is inflation risk?
(Reference: Chapter 1)
The risk of fluctuating interest rates
with interest-paying investments, includ-
ing reinvestment risk. What is interest rate risk?
(Reference: Chapter 1)
Reasons and factors unique to each in-
dividual impacting investment decisions.
What are investment objectives?
(Reference: Chapter 1)
The risk that a person cannot access
cash or convert assets into cash without
a loss in value. What is liquidity risk?
(Reference: Chapter 1)
The value of a unit/share of a segregated
or mutual fund.
What is net asset value per unit/share?
(Reference: Chapter 1)
The value of a future dollar sum in to-
day's dollars. What does present value (PV) of money
refer to?
(Reference: Chapter 1)
The nominal rate of return adjusted for
the rate of inflation.
What does real return refer to?
(Reference: Chapter 1)
A plan that provides regular withdrawals
from a mutual fund or segregated fund, What is a systematic withdrawal plan?
thereby providing a regular cash flow to
2/6
A client wants to ensure the full original
A GIC
investment will be repaid, plus a profit.
What would be an appropriate recom-
(Reference: Chapter 1)
mendation for this client?
Mary owns stock in a US-based com-
Interest.
pany which trades on the Nasdaq ex-
change. Mary receives a dividend from
(Reference: Chapter 1)
her stock. How is the dividend taxed?
What type of risk refers to the possibility
Market risk.
that the total financial market could de-
cline due to an uncontrollable event such
(Reference: Chapter 1)
as a natural disaster?
Steve is a real estate investor, while
Liquidity risk.
Sarah invests in mutual funds. What risk
would likely pose a threat to Steve, but
(Reference: Chapter 1)
not Sarah?
The price paid for a bond on the open
market, expressed as a factor of dollars
per $100 of the face amount. What does bond price refer to?
(Reference: Chapter 1)
A credit that reduces income tax owed
by individual taxpayers on dividends re-
ceived from qualifying Canadian corpo-
What is the dividend tax credit?
rations.
(Reference: Chapter 1)
FV is the value of today's sum of money
at a future date, based on a specified
What does the future value (FV) of mon-
rate of return.
ey refer to?
(Reference: Chapter 1)
The impact of the increase in the Con-
sumer Price Index, over time, on the buy- What is inflation?
ing power of the dollar.
1/6
, Segregated Funds & Annuities - Chapter 1 with Answers
(Reference: Chapter 1)
A risk in which inflation erodes the val-
ue of returns and purchasing power is
diminished over time. What is inflation risk?
(Reference: Chapter 1)
The risk of fluctuating interest rates
with interest-paying investments, includ-
ing reinvestment risk. What is interest rate risk?
(Reference: Chapter 1)
Reasons and factors unique to each in-
dividual impacting investment decisions.
What are investment objectives?
(Reference: Chapter 1)
The risk that a person cannot access
cash or convert assets into cash without
a loss in value. What is liquidity risk?
(Reference: Chapter 1)
The value of a unit/share of a segregated
or mutual fund.
What is net asset value per unit/share?
(Reference: Chapter 1)
The value of a future dollar sum in to-
day's dollars. What does present value (PV) of money
refer to?
(Reference: Chapter 1)
The nominal rate of return adjusted for
the rate of inflation.
What does real return refer to?
(Reference: Chapter 1)
A plan that provides regular withdrawals
from a mutual fund or segregated fund, What is a systematic withdrawal plan?
thereby providing a regular cash flow to
2/6
