FINA200_QUIZ 1_REVIEW WITH COMPLETE SOLUTIONS
LESSON 1
Study guide
QU.Credit management is not a very important part of overall liquidity management for many
Canadians.
FALSE
QU. In order to become a financial adviser, you must meet the education examination, and
experience requirements set by the FPSC.
FALSE
QU. In general, you should review your financial plan once every two years.
FALSE (review annually)
QU. Personal finance is :
The process of planning your spending, financing and investing activities, while taking
into account uncontrollable events…. To optimize your financial situation.
QU. Risk management represent decisions about wheter and how to protect against risk.
Individuals may , , , or their exposure to risk.
Avoid, reduce, accept, insure
QU. Your personal tolerance to risk should be understood if you are considering investments
such as stocks, bonds, mutual funds, are real estate.
TRUE
QU. Your net worth is the vaue or what you own (assets) minus the value of what you
owe(liabilities).
TRUE
QU. Finding an effective liquidity level involves..
Deciding how to invest your money so that you can earn a return but also have easy
access to cash if needed
QU. Financial plan six steps
See note
LESSON 2
Study Question ch.2 :
, QU. The present value interest factor (PVIF) becomes lower as the number of years increases.
TRUE
QU. If Art want $35 000 in 10 years and can earn 12 % interest compounded monthly, how
much does he need to invest today ? 10 605$(P/Y:1, C/Y:12, N:10, I/Y:12, F/V: 35 000, PMT: 0)
QU Which of the following is not an example of a future value? (balance chequing account
today)
QU. Carol would like to have $500 000 saved in her registered retirement savings plan (RRSP) in
30 years at an interest rate of 10% compounded annually. How much should she contribute at
the end of each year ? 3 039.62$ (P/Y:1, C/Y:1, N:30, I\Y: 10, PV:0, FV:500 000, CPT PMT)
QU. An annuity is a stream of equal payments that are received or paid at random periods of
time. FALSE
QU. The cash flows of an annuity due occur at the beginning of each period. TRUE
QU. How much will you have if you deposit 1000$ at the beginning of each year for the next 5
years in an account paying 7 percent interest compounded daily? $6182.53
(BGN P/Y:1, C/Y:365, N:5, I/Y:7, PMT: 1000, PV:0, CPT FV)??
QU. It is always better to choose a lump sum rather than periodic payments over time. TRUE
(only if the lump sum is received today and the payments are received in the future.)
QU. Whether a dollar is received today or in the future, it will be worth about the same amount
to you. FALSE
QU. An example of an opportunity cost is saving money rather than taking a vacation. TRUE
QU. The inputs in the time value of money formulas when calculating the present or future
value of a single dollar amount are the same. FALSE
QU. An investement or loan that has an interest rate of 6% compounded annually also has an
equivalent effective interest rate of 6%. TRUE (2nd, ICONV, 6, C/Y:1, CPT: )
QU. The process of obtaining present values is also called compounding. FALSE
QU. The inputs in the time value of money formulas when calculating the present or future
value of a single dollar amount are the same. FALSE
QU. An interest rate of 10% compounded quarterly is an interest rate of 9.7%
compounded daily on an equivalent effective interest rate basis. ?? ( greater than or not
comparable to or the same as )
LESSON 1
Study guide
QU.Credit management is not a very important part of overall liquidity management for many
Canadians.
FALSE
QU. In order to become a financial adviser, you must meet the education examination, and
experience requirements set by the FPSC.
FALSE
QU. In general, you should review your financial plan once every two years.
FALSE (review annually)
QU. Personal finance is :
The process of planning your spending, financing and investing activities, while taking
into account uncontrollable events…. To optimize your financial situation.
QU. Risk management represent decisions about wheter and how to protect against risk.
Individuals may , , , or their exposure to risk.
Avoid, reduce, accept, insure
QU. Your personal tolerance to risk should be understood if you are considering investments
such as stocks, bonds, mutual funds, are real estate.
TRUE
QU. Your net worth is the vaue or what you own (assets) minus the value of what you
owe(liabilities).
TRUE
QU. Finding an effective liquidity level involves..
Deciding how to invest your money so that you can earn a return but also have easy
access to cash if needed
QU. Financial plan six steps
See note
LESSON 2
Study Question ch.2 :
, QU. The present value interest factor (PVIF) becomes lower as the number of years increases.
TRUE
QU. If Art want $35 000 in 10 years and can earn 12 % interest compounded monthly, how
much does he need to invest today ? 10 605$(P/Y:1, C/Y:12, N:10, I/Y:12, F/V: 35 000, PMT: 0)
QU Which of the following is not an example of a future value? (balance chequing account
today)
QU. Carol would like to have $500 000 saved in her registered retirement savings plan (RRSP) in
30 years at an interest rate of 10% compounded annually. How much should she contribute at
the end of each year ? 3 039.62$ (P/Y:1, C/Y:1, N:30, I\Y: 10, PV:0, FV:500 000, CPT PMT)
QU. An annuity is a stream of equal payments that are received or paid at random periods of
time. FALSE
QU. The cash flows of an annuity due occur at the beginning of each period. TRUE
QU. How much will you have if you deposit 1000$ at the beginning of each year for the next 5
years in an account paying 7 percent interest compounded daily? $6182.53
(BGN P/Y:1, C/Y:365, N:5, I/Y:7, PMT: 1000, PV:0, CPT FV)??
QU. It is always better to choose a lump sum rather than periodic payments over time. TRUE
(only if the lump sum is received today and the payments are received in the future.)
QU. Whether a dollar is received today or in the future, it will be worth about the same amount
to you. FALSE
QU. An example of an opportunity cost is saving money rather than taking a vacation. TRUE
QU. The inputs in the time value of money formulas when calculating the present or future
value of a single dollar amount are the same. FALSE
QU. An investement or loan that has an interest rate of 6% compounded annually also has an
equivalent effective interest rate of 6%. TRUE (2nd, ICONV, 6, C/Y:1, CPT: )
QU. The process of obtaining present values is also called compounding. FALSE
QU. The inputs in the time value of money formulas when calculating the present or future
value of a single dollar amount are the same. FALSE
QU. An interest rate of 10% compounded quarterly is an interest rate of 9.7%
compounded daily on an equivalent effective interest rate basis. ?? ( greater than or not
comparable to or the same as )
