Personal Wealth Management
Final Test Solutions
Course Introduction
Personal Wealth Management explores the fundamental principles and practices involved in building, preserving, and transferring personal wealth. The course covers topics such as budgeting, saving, investing in various asset classes, risk management, retirement planning, tax strategies, and estate planning. Through case studies and practical exercises, students learn to develop comprehensive financial plans tailored to both short-term needs and long-term goals. Emphasis is placed on ethical considerations, decision-making skills, and adapting wealth management strategies to different life stages and economic environments.
Recommended Textbook
Personal Finance 4th Canadian Edition by Jack Kapoor
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15 Chapters
1246 Verified Questions
1246 Flashcards
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Page 2
Chapter 1: Personal Financial Planning in Action
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74 Verified Questions
74 Flashcards
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Sample Questions
Q1) Higher prices are likely to result from:
A) increased spending by consumers.
B) increased production by business.
C) lower interest rates.
D) lower demand by consumers
E) an increase in the supply of a product.
Answer: A
Q2) Simple interest is the interest computed based on the principle,excluding previously earned interest.
A)True
B)False
Answer: True
Q3) Increased demand for a product or service will usually result in lower prices for the item.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Money Management Skills
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) A person's lifestyle is a reflection of his or her values,goals,career,and family situation.
A)True
B)False
Answer: True
Q2) A personal cash flow statement presents income and outflows of cash for a given time period,such as a month.
A)True
B)False
Answer: True
Q3) Warranties are commonly associated with ____________ purchases.
A) investment
B) insurance
C) consumer
D) financial services
E) credit
Answer: C
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Page 4
Chapter 3: Taxes in Your Financial Plan
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65 Verified Questions
65 Flashcards
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Sample Questions
Q1) Identify the correct statements I Tax deductions are more valuable to a high income earner than tax credits.
II RESPs are excellent income splitting vehicles for families with young children.
III Students can deduct moving expenses when they move back home to take up a summer job.
A)I and II,only
B)II and III,only
C)I and III,only
D)I,II and III
E)I only
Answer: D
Q2) Which of the following would be excluded from total income to obtain net income?
A)contributions to RPPs
B)mortgage interest
C)child support payments
D)foreign income exclusion
E)charitable contributions
Answer: C
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Chapter 4: Financial Services: Savings Plans and Payment Accounts
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60 Verified Questions
60 Flashcards
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Sample Questions
Q1) If the annual rate is 10% and inflation is 4%,then the approximate real rate of return is:
A)14.00%
B)4.00%
C)6.00%
D)6.80%
E)7.00%
Q2) Store credit cards usually charge a higher interest rate than a bank credit card.
A)True
B)False
Q3) The increase in purchasing power of an investment is not reflected in its real rate of return.
A)True
B)False
Q4) What are the main types of financial institutions used by consumers?
Q5) Activity accounts are designed for people who write many cheques each month. A)True
B)False
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Chapter 5: Consumer Credit: Advantages, Disadvantages,
Sources, and Costs
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Financing from car dealers in affiliation with financial institutions is called factory financing.
A)True
B)False
Q2) A credit card cash withdrawal always incurs interest from the moment of withdrawal.
A)True
B)False
Q3) A term that refers to the borrower's assets or net worth is called A) capacity.
B) character.
C) capital.
D) collateral.
E) conditions.
Q4) Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.
A)True
B)False
Q5) How do creditors determine your credit-worthiness?
Q6) What are the two basic types of credit? Give examples of both. Page 7
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Page 8
Chapter 6: Consumer Purchasing Strategies and Wise
Buying of Motor Vehicles
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) Consumer credit counseling services are basically concerned with A) lending the money to destitute people.
B) giving debtors food and shelter.
C) helping destitute debtors to relocate in less expensive areas.
D) preventing and solving the problems related to credit overextension.
E) getting you more credit
Q2) The consumer proposal is a maximum five-year plan for paying creditors all or apportion of the total debt owed.
A)True
B)False
Q3) You have two choices in declaring personal bankruptcy: A consumer proposal or declaration through an assignment in bankruptcy.
A)True
B)False
Q4) The most expensive loans available are provided by finance companies,retailers,and banks through credit cards.
A)True
B)False
Q5) What can you do if you are unable to meet your credit obligations?
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Chapter 7: Selecting and Financing Housing
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70 Flashcards
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Sample Questions
Q1) Brian Pittman rents a living unit as a result of his membership in a nonprofit housing organization.What name is commonly used for this type of housing?
A) modular housing
B) government-subsidized housing
C) zoned housing
D) a condominium
E) cooperative housing
Q2) You made a $100,000 down payment on a $400,000 house and financed the remaining amount with a Canadian fixed-rate mortgage.Your mortgage has a term of three years,an amortization period of 25 years,a quoted rate of 7% and payments are made monthly.Identify the correct statement.
A) The 7% quoted rate does not represent the effective annual rate charged on the mortgage.
B) The interest rate is fixed for 25 years.
C) You will make a total of 36 monthly payments to pay off the mortgage.
D) You have a high-ratio mortgage.
E) Your interest rate is fixed for 3 years,variable for 22 years.
Q3) What factors influence the type of housing a family will select?
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Chapter 8: Home and Automobile Insurance
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65 Flashcards
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Sample Questions
Q1) Home insurance costs are affected most directly by
A) the number of claims in an area.
B) insurance agents' commission.
C) government regulations that set premiums.
D) processing costs of claims.
E) the profits of the insurance company.
Q2) Defective house wiring is an example of a
A) hazard.
B) peril.
C) risk.
D) speculation.
E) negligence.
Q3) Property losses can be categorized into destruction of property,and losses due to robbery,burglary,vandalism,or arson.
A)True
B)False
Q4) Accident benefits automobile insurance coverage pays for the costs of injuries to persons in the driver's vehicle.
A)True
B)False
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Chapter 9: Health and Disability Income Insurance
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) You probably have little or no need for life insurance if you are
A) married and your spouse works.
B) divorced and have two children.
C) a single person living alone or with parents.
D) gainfully employed.
E) a household with several children.
Q2) Good disability plans pay when you are unable to work at your regular job; poor disability plans pay only when you are unable to work at any job.
A)True
B)False
Q3) Which type of health insurance policy may not cover all of your health insurance needs or may deny benefits if you lose your job?
A) group health
B) individual health
C) Basic health
D) Comprehensive medical
E) Disability income
Q4) What is life insurance? What is its purpose and principle?
Q5) What are the steps in creating a plan to buy your life insurance?
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Chapter 10: Financial Planning With Life Insurance
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Sample Questions
Q1) A short-term investment objective is defined as one that will be accomplished within a period of less than two years.
A)True
B)False
Q2) The most important priority an investor in preferred stock enjoys is receiving cash dividends before common stockholders are paid any cash dividends.
A)True B)False
Q3) An investor can make money on a common stock investment by
A) waiting for the corporation to repurchase the stock.
B) waiting for the stock's value to increase and then selling it.
C) waiting for the stock's value to decrease and then selling it.
D) waiting for the stock to reach the maturity date.
E) converting the common stock to preferred stock.
Q4) Mutual funds range from very conservative to extremely speculative investments. A)True B)False
Q5) Describe the sources of investment information investors can use to evaluate a potential investment.
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Chapter 11: Investing Basics and Evaluating Bonds
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111 Flashcards
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Sample Questions
Q1) Capital gains yield is the stock's appreciation in value divided by its end-of-year stock price.
A)True
B)False
Q2) Which of these is not a sign for potential online investment scams?
A) high pressure tactics to buy from people you do not know
B) promises of high profits and sales relating to products of a new company
C) large-cap companies that pay a generous executive salary
D) reverse splits
E) small-cap companies investing in projects unrelated to their businesses
Q3) A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n)____________ stock.
A) defensive
B) cyclical
C) growth
D) income
E) blue-chip
Q4) What is the primary difference between common stock and preferred stock?
Q5) Describe the steps involved in a typical margin transaction.
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Chapter 12: Investing in Stocks
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90 Flashcards
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Sample Questions
Q1) A corporate bond rated B by the DBRS would be suitable for:
A) every investor.
B) very cautious investors.
C) speculators.
D) no one because the bond issue is in default.
E) knowledge investors.
Q2) The only way an investor can make money on a bond investment is to hold the bond until maturity.
A)True
B)False
Q3) A bond with a price quotation of 100 sells for $100.
A)True
B)False
Q4) Treasury bills are:
A) discounted securities sold by the government of Canada
B) discounted securities sold by corporations
C) regular interest bonds
D) compound interest bonds
E) simple-interest bonds
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Chapter 13: Investing in Mutual Funds
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Sample Questions
Q1) A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n)____________ fund.
A) balanced
B) growth
C) income
D) equity
E) money market
Q2) A mutual fund in which shares are issued only when the fund is organized is called a(n)____________ fund.
A) closed-end
B) open-end
C) load
D) no-load
E) convertible
Q3) The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential.
A)True
B)False
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Chapter 14: Starting Early: Retirement and Estate Planning
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83 Flashcards
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Sample Questions
Q1) Unless it is indexed,an annuity provides no protection from inflation.
A)True
B)False
Q2) What is the most popular personal retirement plan?
A) Deferred Profit Sharing Plan
B) Registered Pension Plan
C) Registered Retirement Savings Plan
D) Canada Pension Plan
E) New Seniors Benefit
Q3) When a lender uses your house as collateral to buy an annuity for you from a life insurance company,it is called:
A) an obverse annuity mortgage.
B) mortgage life insurance.
C) a reverse mortgage annuity.
D) a fixed annuity with level premium.
E) whole life insurance.
Q4) You can qualify for reduced CPP retirement benefits at age 50.
A)True
B)False
Q5) What is the importance of retirement planning?
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Chapter 15: Daily Spending Diary
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Sample Questions
Q1) Estate planning involves
A) handling your property while you are alive.
B) dealing with what happens to your property after your death.
C) your family's financial security in the event of your death.
D) your family's financial security in the event of your spouse's death.
E) handling your property while you are alive; planning how your property will be distributed after your death; and planning your family's financial security in the event of your death or your spouse's death are all part of estate planning.
Q2) At death,it is necessary to ____________________________.
A) to file a final (terminal)tax return.
B) pay estate taxes in Canada.
C) report only the earned income of the deceased up to the date of death.
D) report only the partial value of any registered assets.
E) ensure your survivors have money.
Q3) In the year of death,the estate's executor must file a final (terminal)tax return.
A)True
B)False
Q4) What are the legal aspects of estate planning?
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Page 18