FINA 200_SAMPLE QUIZ 1 WITH 100% CORRECT
SOLUTIONS
1. Which step in developing a financial plan ensures that the plan is working as intended?
A: Evaluating your financial plan
2. At which life stage does owning adequate insurance first become a concern? Refer Exhibit
1.2.
A:Family and Mid-Career
3. Which component of a financial plan requires you to evaluate your current financial position
by assessing cash flows, assets and liabilities?
A: Budgeting and tax planning
4. A $1,000 deposit earns simple interest of 5% annually. How much interest will the deposit
earn in 6 years?
A: $300
5. You plan to deposit $18,000 for 10 years. You expect to earn a rate of 2%, compounded
quarterly for the first 7 years, and 3%, compounded semi-annually thereafter. How much money
will you have in 10 years?
A: $22632
6. Sally is planning major renovations to her home. A new driveway will cost $15,000 in 2 years,
and a revamped bathroom will cost $12,000 in 3 years. If Sally can invest funds at 4%,
compounded semi-annually, how much should be invested today to undertake these
renovations?
A: $24513
7. Andrea’s investment account balance is $18,650. She plans to set aside $500 a month, at the
end of the month, for the next 5 years. At a rate of 6%, compounded quarterly, what will be the
balance of her investment account in 5 years?
A: 59977
8. You’ve just won the $1 million lottery and are planning to further your education starting 2
years from today. Your studies will last 3 years and cost $60,000 a year in tuition and living
expenses, available at the beginning of each year. You can invest the $1 million at a rate of
2.5%, compounded annually. How much of the $1 million should you set aside to attain your
education goal?
A: $167,182
9. Which statement(s) is(are) true with respect to the effective annual rate (EAR) and annual
percentage rate (APR)?
, A: I and II, only
10. Which will have a negative impact on an individual’s total income?
I. Secondary education
II. Extensive job experience
III. Sole income earner
IV. Specialized skills
A: I and III, only
11. Given the following, what is net cash flow?
12. Which is the best way to deal with a budgetary shortfall?
A: Build an emergency fund and draw down funds as required.
13. Given the following, what is the level of total assets?
14. Given the following, what is the debt ratio?
15. What is an adequate level for the current ratio?
16. If Kayla files her 2019 federal income tax return on August 15th of 2020 with a federal
balance owing of $4,000. What would be her late filing penalty?
A: $320.00
17. Chiara sold 100 shares of AE Capital for $40 a share. She had paid $32 a share three years
earlier. She owns 1000 shares of XY Corporation on which she has incurred a $2 a share
capital loss. How many shares of XY Corporation must she sell to bring her taxable capital gain
to zero?
A: 400
18. When can Sally, a university student deduct moving expenses?
A: When she moves back home to take up employment
19. Given the following, what is the individual's 2019 combined federal and Quebec marginal tax
rate?
20. Which tax credits can be carried forward?
I. Charitable donations
II. Age amount
III. Tuition
A: I and III, only
21. For the Registered Education Savings Plan (RESP), to whom must an Accumulated Income
Payment be made to?
A:The subscriber
SOLUTIONS
1. Which step in developing a financial plan ensures that the plan is working as intended?
A: Evaluating your financial plan
2. At which life stage does owning adequate insurance first become a concern? Refer Exhibit
1.2.
A:Family and Mid-Career
3. Which component of a financial plan requires you to evaluate your current financial position
by assessing cash flows, assets and liabilities?
A: Budgeting and tax planning
4. A $1,000 deposit earns simple interest of 5% annually. How much interest will the deposit
earn in 6 years?
A: $300
5. You plan to deposit $18,000 for 10 years. You expect to earn a rate of 2%, compounded
quarterly for the first 7 years, and 3%, compounded semi-annually thereafter. How much money
will you have in 10 years?
A: $22632
6. Sally is planning major renovations to her home. A new driveway will cost $15,000 in 2 years,
and a revamped bathroom will cost $12,000 in 3 years. If Sally can invest funds at 4%,
compounded semi-annually, how much should be invested today to undertake these
renovations?
A: $24513
7. Andrea’s investment account balance is $18,650. She plans to set aside $500 a month, at the
end of the month, for the next 5 years. At a rate of 6%, compounded quarterly, what will be the
balance of her investment account in 5 years?
A: 59977
8. You’ve just won the $1 million lottery and are planning to further your education starting 2
years from today. Your studies will last 3 years and cost $60,000 a year in tuition and living
expenses, available at the beginning of each year. You can invest the $1 million at a rate of
2.5%, compounded annually. How much of the $1 million should you set aside to attain your
education goal?
A: $167,182
9. Which statement(s) is(are) true with respect to the effective annual rate (EAR) and annual
percentage rate (APR)?
, A: I and II, only
10. Which will have a negative impact on an individual’s total income?
I. Secondary education
II. Extensive job experience
III. Sole income earner
IV. Specialized skills
A: I and III, only
11. Given the following, what is net cash flow?
12. Which is the best way to deal with a budgetary shortfall?
A: Build an emergency fund and draw down funds as required.
13. Given the following, what is the level of total assets?
14. Given the following, what is the debt ratio?
15. What is an adequate level for the current ratio?
16. If Kayla files her 2019 federal income tax return on August 15th of 2020 with a federal
balance owing of $4,000. What would be her late filing penalty?
A: $320.00
17. Chiara sold 100 shares of AE Capital for $40 a share. She had paid $32 a share three years
earlier. She owns 1000 shares of XY Corporation on which she has incurred a $2 a share
capital loss. How many shares of XY Corporation must she sell to bring her taxable capital gain
to zero?
A: 400
18. When can Sally, a university student deduct moving expenses?
A: When she moves back home to take up employment
19. Given the following, what is the individual's 2019 combined federal and Quebec marginal tax
rate?
20. Which tax credits can be carried forward?
I. Charitable donations
II. Age amount
III. Tuition
A: I and III, only
21. For the Registered Education Savings Plan (RESP), to whom must an Accumulated Income
Payment be made to?
A:The subscriber
