1. Hunter is looking to purchase a motorcycle. Due to COVID-19, the prices are high, but the financing rates still seem reasonable. Hunter is comparing them to see which bank he will use for the loan. Which bank would you recommend Hunter apply to in seeking the lowest effective rate? (Round to two decimal places)

• Bank of Montreals nominal interest rate is 6.9%, compounded quarterly.
• CIBCs nominal interest rate is 6.7%, compounded monthly.
• Bank of Nova Scotias nominal interest rate is 6.65%, compounded semi-monthly

1. Bank of Montreal
2. CIBC
3. Bank of Nova Scotia
4. Either the Bank of Montreal or Nova Scotias loan as the effective interest rates are equivalent
5. All rates are equivalent when calculating the effective interest rate; Hunter can apply for a loan from any of the three banks.

2. Tom graduated in civil engineering two years ago and decided to work in the remote area of northern Chicago. He is making great money and saving it all. What is Toms marginal rate of tax for 2020 if he made a Registered Retirement Savings Plan (RRSP) contribution of $27,000 and a Tax-Free Savings Account (TFSA) contribution of $6,000. His gross annual income earned was $150,000.

1. 33.29%
2. 47.46%
3. 29.35%
4. 38.09%
5. 38.76%

3. As a student you should file your tax returns for several reasons. Which one is incorrect?

1. As a resident outside of Quebec, you may be eligible for a refundable Goods and Services Tax (GST)/ Harmonized Sales Tax (HST) credit, or as a Quebec resident, you may be eligible for the refundable Goods and Services Tax (GST) and the Quebec Solidarity Tax credit.
2. You may have tuition credits that you will not be using to reduce your taxes, filing a return makes the CRA aware that you have these credits for your future use.
3. Declaring your earned income builds your Registered Retirement Savings Plan (RRSP) contribution room.
4. If your employer deducted income tax and you earned less than the basic personal amount, you are probably eligible to get all of the taxes that were withheld returned to you as a refund on your tax return.
5. You may claim interest on qualifying student loans, such as those made to you under the Canada Student Loans Act or the Canada Student Financial Assistance Act. If you do not use the credit, you can carry it forward for five years or you can transfer it to your parents or spouse.

4. In managing your liquidity, you must consider the following:

______________________ deals with the decisions about how much credit you need to support your spending and which sources of credit to use.

____________________deals with deciding how much money to retain in a liquid form and how to allocate the funds among short-term investment instruments.

1. Credit management; Debit management;
2. Money management; Investment allocation;
3. Credit management; Money management;
4. Savings management; Credit management;
5. Debt management; Emergency funding;

5. As a new, full-time employee, Jenny has just become eligible to participate in Googles retirement plan. Google matches her contributions dollar for dollar! The plan averages an annual return of 7% compounded monthly. Jenny is 25 years old and plans to work until age 60. If she contributes 8% of her gross salary on the 1^st of each month and her employer matches her contributions at the end of each month, how much will she have in her company retirement plan when she retires? Jennys gross annual salary is $75,000 and is paid on the 1^st of each month.

1. $1,898,765
2. $1,726,744
3. $1,839,612
4. $1,804,893
5. $1,806,307

6. Jasmine just celebrated her 19^th birthday on July 5, 2021. Her grandmother gave her $10,000 as a special gift for this milestone. Jasmine wanted to put it into her savings account at her bank where she already had $5,000 saved from her previous years birthday money. Her boyfriend Roy suggested that she put it in a Tax-Free Savings Account (TFSA). She is however not familiar in how a TFSA works but trusts Roy and put the entire amount of $15,000 into her newly opened TFSA account. Note that Jasmine has never worked either full-time or part-time as she had difficulty finding work during COVID-19. Which of the following statements is correct?

(See Table C)

1. Jasmine will have overcontributed $3,000 to her TFSA and will have a penalty to pay.
2. Jasmine is only allowed to put $6,000 into her TFSA, she can put the remaining money into her Registered Retirement Savings Account (RRSP).
3. Jasmine is allowed to put the entire amount of $15,000 into her TFSA which is a wise decision as neither the earnings inside her TFSA nor her withdrawals will be taxed.
4. Jasmine would have been better off putting the money insider her Registered Retirement Savings Account (RRSP) instead of her TFSA.
5. Jasmine is not able to contribute to her TFSA as she has never worked.

7. Which of the following life stages involves the fewest objectives and milestones?

a) Late retirement

b) Prime earning

c) Early career

d) Education

e) Family and Mid-Career

8. Laurie has been working full-time since graduating from Concordias JMSB in December 2019. She is a resident of Quebec and is looking to make her first Registered Retirement Savings Plan (RRSPs) contribution (including a catch-up for past years). Laurie is not part of a company pension plan. Calculate the maximum contribution that she can claim as a deduction on her 2020 personal income tax return. (see Table D)

Lauries annual gross salary:

2017: $8,000 part-time at Starbucks while a student

2018: $10,000 part-time at Starbucks while a student

2019: $15,000 part-time at Starbucks while a student

2020: $60,000 full-time at the Royal Bank

2021: $65,000 full-time at the Royal Bank

1. $7,280
2. $19,800
3. $16,740
4. $28,440
5. $5,940

9. Amelio and Amelia are looking to move from their rental apartment. They have saved for a condo and are ready to purchase their first home which is on the market for $295,000. They both have Registered Retirement Saving Plans (RRSPs) and as of today, July 5, 2021, the market value of Amelios RRSP is at $23,775 while Amelias is at $37,443. Amelio also has $5,000 in his savings account. Which statement is incorrect? (See Table E)

1. Using their RRSP's as a down payment under the HBP may be a great option for Amelio and Amelia as it may help them accumulate towards the 20% down payment to avoid having to pay default insurance premiums.
2. If Amelio still had enough "contribution room" in his RRSP, he could move money from his savings and make a contribution into his RRSP at least 90 days before the closing date on the purchase of the new condo, then simply withdraw the money through the Home Buyers' Plan. This would allow Amelios RRSP contribution to count as a tax deduction in his 2021 tax return which he could use his tax refund to repay the RRSP under the HBP and help pay for other expenses.
3. Under the HBP, their first repayment is not due until 2 years after they make their withdrawal.
4. Under the HBP, the full amount of their withdrawal must be repaid within 15 years; they can start making repayments anytime, and they can repay the full amount early with no penalty.
5. With their current RRSPs, Amelio and Amelia can withdraw up to $61,218 under the HBP to put towards a down payment on their new home.

10. Linda is a student at Concordia and does not have any loans. She is just now learning about credit scores and has recently found out that lenders commonly assess the credit payment history provided by one or more credit bureaus when deciding whether to extend a credit card, personal loan or mortgage. For Linda to establish her creditworthiness, she needs to build credit with the credit rating agencies for a credit score. Which statement is incorrect?

1. Linda is looking to order a credit card to establish a positive credit history by using credit.
2. Lindas credit score can affect the interest rate quoted on the loan that she will be seeking.
3. A high credit score could increase Lindas interest rate substantially, which may translate into savings of thousands of dollars in interest expense over time.
4. Linda was thinking of opening a lot of new accounts in a short period of time however lenders might assess this as riskier than those with long histories and fewer accounts.
5. Linda believes it is better to have a higher credit limit and use less of it each month rather than using a lot of the available credit as lenders see this as a greater risk. This is true even if you pay your balance in full by the due date. For example:

• a credit card with a $5,000 limit and an average borrowing amount of $1,000 equals a credit usage rate of 20%
• a credit card with a $1,000 limit and an average borrowing amount of $500 equals a credit usage rate of 50%