Financial Planning
Solved Exam Questions
Course Introduction
Financial Planning is a comprehensive course designed to introduce students to the essential principles and practices involved in managing personal and organizational finances. The course covers key topics such as budgeting, saving, investing, tax planning, risk management, retirement strategies, and estate planning. Students will learn how to set financial goals, analyze financial statements, and develop actionable plans to achieve financial security and growth. Through case studies and practical exercises, the course emphasizes critical thinking and decision-making skills, equipping students with the knowledge and tools necessary for effective financial management in both personal and professional contexts.
Recommended Textbook
Personal Finance 6th Canadian Edition by Kapoor
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15 Chapters
1555 Verified Questions
1555 Flashcards
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Page 2
Chapter 1: Personal Financial Planning: An Introduction
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years.
A)True
B)False
Answer: True
Q2) Decreased consumer spending will usually cause:
A) lower consumer prices.
B) reduced employment levels.
C) lower tax revenues.
D) lower interest rates.
E) higher employment levels.
Answer: B
Q3) Time value of money refers to changes in consumer spending when inflation occurs. A)True
B)False
Answer: False
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Page 3
Chapter 2: Money Management Strategy: Financial
Statements and Budgeting
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) A major expenditure for most families is
A) insurance.
B) contributions.
C) clothing.
D) utilities.
E) transportation.
Answer: E
Q2) A home file should be used for:
A) storing all financial documents and records.
B) obsolete financial documents.
C) documents that require maximum security.
D) financial records for current needs.
E) records that are difficult to replace.
Answer: D
Q3) Opportunity costs are only associated with money management decisions involving long-term financial security.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Planning Your Tax Strategy
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86 Flashcards
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Sample Questions
Q1) Tax evasion refers to illegal actions to reduce one's taxes.
A)True
B)False
Answer: False
Q2) An example of a non-refundable tax credit is
A) interest on a credit card or charge account.
B) certain job-related travel expenses.
C) the cost of commuting to work.
D) life insurance premiums.
E) student loan interest fees.
Answer: E
Q3) Phillip Marnier had earnings from his salary of $40,000, interest on savings of $700, and a contribution to a registered retirement saving plan of $1,500. Phillip's net income would be
A) $39,200.
B) $40,000.
C) $39,300.
D) $38,500.
E) $41,500.
Answer: A
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Chapter 4: The Banking Services of Financial Institutions
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) A saver will usually earn the highest rate with which of the following types of savings plans?
A) Guaranteed Investment Certificates
B) club account
C) passbook account
D) share account
E) NOW account
Q2) Which best describes the prime rate of interest?
A) The lending rate banks charge their most creditworthy clients
B) The yield on 91-day treasury bills
C) The yield on 30-year government bonds
D) The lending rate the Bank of Canada charges financial institutions.
E) The base rate for all mortgages
Q3) Activity accounts are designed for people who write many cheques each month.
A)True
B)False
Q4) Credit unions frequently offer lower loan rates than other financial institutions.
A)True
B)False
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Chapter 5: Introduction to Consumer Credit
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) If your credit application is denied, you
A) can sue the credit rating agency.
B) can file a complaint against the merchant.
C) don't have any rights provided by law.
D) should ask to know specifically why.
E) can reapply for credit after 30 days.
Q2) When you cosign a loan, you are being asked to guarantee this debt.
A)True
B)False
Q3) With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.
A)True
B)False
Q4) A credit file is a report which includes the individual's present employer and position, former employer(s), public records and a list of cheques returned for insufficient funds.
A)True
B)False
Q5) Briefly list and discuss the benefits associated with credit cards
Q6) What are the two general rules of measuring credit capacity?
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Chapter 6: Choosing a Source Credit: the Costs of Credit Alternatives
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Creditors use the same system to calculate the balance on which they assess finance charges.
A)True
B)False
Q2) To be eligible for the insolvency protection application called a consumer proposal
A) you must be solvent and more than $200,000 in debt
B) you must be insolvent and more than $200,000 in debt
C) you must be insolvent and less than $75,000 in debt, excluding a mortgage on your principal residence
D) you must be solvent and less than $100,000 in debt
E) you must be insolvent and more than $100,000 in debt, excluding a mortgage on your principal residence
Q3) Credit counselors will aid families by
A) setting up a budget for them.
B) paying off their loans.
C) providing free basic necessities.
D) providing one month free shelter.
E) relocating them in less expensive areas.
Q4) What are two key concepts to keep in mind as you shop for credit?
Page 8
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Chapter 7: The Finances of Housing
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93 Verified Questions
93 Flashcards
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Sample Questions
Q1) Lenders commonly use a GDS ratio of 30% and a TDS ratio of 40% as guidelines to determine the amount you can comfortably afford for housing.
A)True
B)False
Q2) Past interest rates can affect the price of a home.
A)True
B)False
Q3) Most people select a place of residence based on available financial resources, needs, and lifestyle.
A)True
B)False
Q4) Ease of mobility is an advantage of owning a house.
A)True
B)False
Q5) Home improvements may contribute more to the value of the home than the cost of the renovations.
A)True
B)False
Q6) What is a variable rate mortgage? What factors should you consider?
Page 9
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Chapter 8: Home and Automobile Insurance
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) Which of the following is likely to increase your car insurance premium?
I. You live in a rural area.
II. You are over 70.
III. You usually carry several passengers.
A) I and II, only
B) II and III, only
C) I and III, only
D) I, II and III
E) I only
Q2) The purpose of a high-risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.
A)True
B)False
Q3) A friend wants to understand what affects the cost of auto insurance. Explain the factors used to determine the automobile insurance premiums a person pays.
Q4) What factors affect the cost of home insurance?
Q5) A rider is an addition of coverage to a standard insurance policy.
A)True
B)False
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Chapter 9: Life, Health, and Disability Insurance
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) A particular insurance company will not be equally competitive for all policies. One company might have a competitively priced policy for 24-year-olds but not for 35-year-olds.
A)True
B)False
Q2) Most health insurance policies issued by health and life insurance companies are sold to
A) victims of communicable diseases.
B) individuals with families.
C) single individuals with no dependents.
D) Employees and their dependents.
E) Employers, who in turn offer the benefits to employees.
Q3) Critical illness benefits are paid
A) immediately after the policyholder dies
B) to the policyholder before he or she dies
C) in equal installments over a period of 5 years
D) to the spouse of the policy holder
E) five days after the policyholder dies
Q4) What are the two types of life insurance? What are the major types and subtypes?
Q5) What is disability income insurance? What are the sources of disability income?
Page 11
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Chapter 10: Fundamentals of Investing
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114 Flashcards
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Sample Questions
Q1) Which of the following investments has the highest risk?
A) preferred stock
B) common stock
C) corporate bonds
D) options
E) real estate
Q2) An intermediate-term objective is defined as one that will be accomplished within eighteen months.
A)True
B)False
Q3) Which of the following would not be considered a safe investment for a conservative investor?
A) corporate bonds
B) guaranteed investment certificates
C) passbook savings accounts
D) blue-chip stocks
E) collectibles
Q4) Describe the sources of investment information investors can use to evaluate a potential investment.
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Chapter 11: Investing in Stocks
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) Kate Babini owns 250 shares of Gildan Activewear. Suppose that for the last calendar quarter, Gildan paid $0.28 a share. What is the total amount she received in her dividend cheque for this quarter?
A) $0.28
B) $2.80
C) $70.00
D) $250.00
E) $892.00
Q2) The price-earnings ratio is not affected by an increase or decrease in the firm's earnings.
A)True
B)False
Q3) Doug Baker bought Toronto Dominion stocks for $50 a share one year ago. He sold the stock a year later for $55.50 a share. What was John's capital gains yield?
A) 3 percent
B) 3.50 percent
C) 9.9 percent
D) 11 percent
E) 111 percent
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Page 13
Chapter 12: Investing in Bonds
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) Which of the following investment characteristics would be favorable to an investor?
I. Callable
II. Convertible
III. Cumulative dividends
IV. Pledge of collateral
A) I, II and III are correct
B) II, III and IV are correct
C) I and III are correct
D) I, II, III and IV are all correct
E) I and II are correct
Q2) The type of bond that is not registered in the investor's name is a ___________ bond.
A) revenue
B) general obligation
C) tax-exempt
D) zero-coupon
E) bearer
Q3) Discuss why corporations issue bonds, and describe some of the types of bonds issued.
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Page 14
Chapter 13: Investing in Mutual Funds
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) A mutual fund that aims for capital gains is:
A) a balanced asset allocation fund
B) a bond fund
C) an equity or common stock fund
D) a specialty fund
E) an ethical fund
Q2) A mutual fund offered by insurance companies as an alternative to conventional mutual funds and offers a range of investment objectives and categories of securities is
A) a balanced asset allocation fund
B) a segregated fund
C) an equity or common stock fund
D) a real estate mutual fund
E) an ethical fund
Q3) Shares in a close-end fund are redeemed by the investment company at the request of the investor.
A)True
B)False
Q4) Why do investors purchase mutual funds instead of purchasing stocks, bonds, or other investments on their own?
Page 15
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Chapter 14: Retirement Planning
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) Which of these statements is correct about the Canada Pension Plan (CPP)?
A) The CPP dates back to 1996.
B) There are three types of CPP benefits.
C) CPP contribution is based on your age.
D) The federal government matches the CPP contributions of self-employed individuals.
E) If you can begin receiving your CPP benefits at the age of 50.
Q2) You can expect to spend about 16 to 20 years in retirement.
A)True
B)False
Q3) Which employer pension plan has an individual account for each employee?
A) undefined-contribution plan
B) defined-contribution plan
C) defined-benefit plan
D) undefined-benefit plan
E) surplus-employee plan
Q4) The most common ones are adult lifestyle/retirement communities, life lease housing, and retirement homes. Briefly describe the characteristics of each of these alternatives.
Q5) How can retirees avoid housing traps?
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Chapter 15: Estate Planning
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) A pre-nuptial agreement is a documentary agreement between spouses before marriage.
A)True
B)False
Q2) Making any changes on the face of your will can invalidate it.
A)True
B)False
Q3) If you die without a valid will,
A) the government confiscates your property.
B) the federal court decides how the property should be distributed.
C) your relatives or friends will get the property.
D) your local custom will determine how the property is distributed.
E) the province's law of descent and distribution becomes your will.
Q4) A person or institution that holds or generally manages property for the benefit of someone else under a trust agreement is called a(n)
A) beneficiary.
B) executor.
C) trustee.
D) guardian.
E) executrix.
Page 17
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