Q1. Given the following ABC Inc. bond information: $1000 par value, maturity 2023 Dec 22 semi-annual coupon 7.75%, price 105.50 and yield 7.4%. How much interest does it pay annually?

Select one:

a. $7.50

b. $7.40

c. $74.00

d. $77.50

Q2. Which of the following bond mutual funds has both the lowest default risk and interest rate risk?

Select one:

a. Short-term federal

b. Short -term corporate

c. Short-term high-yield

d. T-bill

Q3. In calculating the net asset value, which of the following is true?

Select one:

a. Dividends are subtracted and expenses are added.

b. Interest is subtracted and expenses are added.

c. Interest and other expenses are not included.

d. Dividends are added and expenses are subtracted.

Q4. Ann is 65 and has just retired. She can select a pension of $1745 payable at the end of each month guaranteed for the rest of her life, but not indexed for inflation, or take a lump sum of $312,000. Assume she can invest the lump sum at 6% per year, compounded monthly, and draw the same income as the pension. If she lives to be 95 years old, which is the better choice?

Select one:

a. The pension since she might live past 95 years.

b. The lump sum since it is safer.

c. The pension since it is equivalent to a lump sum of $320,000.

d. The lump sum since it is equivalent to a pension of $1871 per month.

Question 5

Monitoring liquidity includes tracking your

Select one:

a. TFSA growth stocks.

b. bond mutual funds.

c. RRSP balances.

d. emergency funds.

Question 6

The best schedule for the order of the components of your financial plan would be

Select one:

a. budgeting and tax planning, financing large purchases, managing liquidity, insurance, investing and estate planning

b. managing liquidity, budgeting and tax planning, financing large purchases, insurance, investing and estate planning

c. budgeting and tax planning, managing liquidity, financing large purchases, insurance, investing and estate planning

d. tax planning, managing liquidity, budgeting, financing large purchases, insurance, investing and estate planning