1. Henry, a wealthy NAIT alumni, is in a 39% marginal tax bracket and 29% average tax bracket in Alberta where he now resides. What is the after-tax return on his GIC if his GIC yields a nominal return of 6% annually?

a. 3.66%

b. 6.00%

c. 4.26%

d. 3.96%

2. Which of the following statements of Canadas current tax system is correct?

a. At the federal level Canada has a flat tax system, where Canadians in all income brackets are all

levied the same percentage of tax on income.

b. All types of income are always taxed at an unreduced tax.

c. The federal tax system is progressive, and the provincial tax is a percentage of federal tax.

d. Both the federal and most provincial tax systems are progressive.

3. Chris decides to retire early at the age of 61. If a full pension under the CPP is currently

$10,725 per year, how much will his annual retirement income be if he has worked and

contributed steadily for the past 40 years?

a. $8,188

b. $7,636

c. $11,500

d. None of the above

4. Marie is deciding if she should retire now at age 61 or wait until age 70. Her health is very

good she expects to live to 90. Which of the following statements is true about her CPP

retirement income if she expects to live to age 90 and will be eligible to collect the full

retirement benefit at age 65 and is using a discount rate of 3%?

a. She should retire now.

b. She should wait until age 70.

c. It doesnt make any difference.

d. This cannot be assessed without knowing the amount of the full retirement benefit.