Question

The reason whole life insurance is much more expensive than term insurance is because?

options:

	the mortality cost for term insurance is irrelevant.
	the mortality cost for term insurance is higher.
	the mortality cost for whole life insurance is lower.
	the mortality cost for whole life insurance is higher.

Question

Once Joseph died, Rachel became the sole owner of their house on Jan 1, 2010. It had initially cost $450,000 and they made a 10% down payment of $45 000. The mortgage was amortized over 25 years at a rate of 3% and compounded semi-annually. The house is now worth $850,000. If it is Jan 1, 2022, what is the equity in Rachel's house? (Ignore CMHC insurance costs and property transfer tax) Hint: you need to determine the mortgage owing after 144 (12 years x 12 payments) payments made.

options:

	$200,000
	$210,744
	$361,346
	$602,385

Question

If an investor wants to invest in a high volatility stock that can outperform the market, which of the following would be the best choice? (assume the 3 year standard deviation for the underlying market is 10%)

options:

	a stock with a beta of 1.5
	a stock with a beta of .9
	a stock with a three year standard deviation of 7%.
	a stock with a three year standard deviation of 9%

Question

If you take out a high ratio mortgage, what is the cost of the CMHC insurance if your down payment is only 5%?

options:

	2.0%
	2.5%
	3.10%
	4.0%

Question

Which types of risk are most detrimental to a equity investor investor?

options:

	currency and interest rate risk.
	business risk and market risk.
	interest rate risk only.
	inflation and market risk.

Question 36

What is the correct order of these investments from highest to lowest risk?

options:

	precious metals, cdn equities, high yield bonds, investment grade bonds, 90-day t-bills.
	precious metals, high yield bonds, cdn equities, investment grade bonds, 90-day t-bills.
	precious metals, cdn equities, investment grade bonds, high yield bonds, 90-day t-bills.
	precious metals, investment grade bonds, high yield bonds, cdn equities, 90-day t-bills.

Question

Which of the following will have the greatest impact on lowering the mortgage payment?

options:

	increasing the mortgage interest rate.
	reducing the mortgage amortization period.
	extending the mortgage amortization period
	increasing the overall size of the mortgage.

Question

If the bank requires Sandra to take out life insurance to cover a 10 year $100,000 loan, what is the best type of insurance for her to use?

options:

	to purchase a government strip bond today that matures for a $100,000 in 10 years time.
	to purchase ten year term insurance for $100,000
	to purchase ten year whole life insurance for $100,000
	to purchase $100,000 in disability insurance.

Question

If a client wishes to create a portfolio of two stocks that will reduce overall volatility what is the best correlation coefficient between the two stocks?

options:

	a correlation coefficient of 1.0.
	a correlation coefficient of -1.0.
	a correlation coefficient of .5.
	a correlation coefficient of .2.

Question

The Blacks purchased their home for $400,000 five years ago. The market value of their house today is $350,000. They have an outstanding 1^st mortgage debt of $200,000 and a 2^nd mortgage of

options:

	-$50,000
	$50,000
	$350,000
	$400,000