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Financial Vehicles Flashcards | StudBud
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Financial Vehicles
Financial Vehicles
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1
When you buy common shares, there are THREE general strategies. Which is NOT a strategy?
Value Investing
Growth Investing
Discount Investing
Income Investing
2
Which one of these represent EQUITY financing?
issuing bonds
GIC
selling more products
issuing stock
3
Which one of these is considered PASSIVE investing?
Buying Mutual Funds
Buying ETFs
Buying Stocks
Buying a TFSA
4
Which of these best describes the strategy of a robo advisor like Wealthsimple?
Algorithms choose stocks for you
You choose your specific ETFs to match your risk tolerance
Auotmatically buys a variety of ETFS based on your risk tolerance
Simply buys low risk index funds
5
A brochure of a Mutual fund or ETF is called a PROSPECTUS. Which of these is NOT in a prospectus?
Performance History
Current prices of stocks in fund.
Fund Manager
Fund Objective
6
If the cost of borrowing goes up, are bonds more attractive?
NO - less attractive
Yes - more attractive
No difference
7
The KEG gives a $.05 dividend monthly. What is the yield if the price is $10?
6%
12.5%
5%
10%
8
Which one of these is NOT a low-risk option?
Money-market Fund/T-Bill
High Interest Savings Account
GIC
ETF
9
Buy 5 units of $1000 par value @ $1500 each. Coupon 10%. Yield 5%. How much get semi-annually?
$100
$500
$50
$250
10
Which one of these insures your money in your bank account?
Individual Banks
AMPA
CDIC
there is no insurance
11
Which bonds are the best?
AAA
AAAA
A
BBB
12
Which one of these pays the highest interest?
Blue Chip Stock
Corporate Bond
Bank account
Government Bond
13
I buy Apple for $5 and sell at $7. What is my ROI?
10%
40%
30%
20%
14
Which one of these is a blue chip stock?
Star Burger
Global growth Mutual fund
Patient Home Monitoring
Google
15
If you buy and sell stock on its ex-dividend date, you will not receive the dividend payout.
Yield is more important
TRUE and FALSE
FALSE
TRUE
16
What is ALL-IN-ONE investing?
You buy one ETF that creates couch potato porfolio
You hire a financial advisor to handle all needs
You open bank account with no fees
You buy a small number of Index Funds
17
Which is FALSE about CPP and OAS?
Everyone gets CPP
CPP Is based on how much you work
CPP percentages have went UP do to pension crisis
OAS is given to Canadian citizens for living here for a long time.
18
Which one of these uses ACTIVE management?
Mutual Fund
Bank account
ETF
Index Fund
19
What is a BALANCED portfolio?
Passively managed portfolio
Socially responsible portfolio
Low risk portfolio
Diversification that covers entire market
20
Buy 5 units of $1000 par value @ $1500 each. How much will company give me when expires?
$5000
1000
depends on yield
$7500
21
Why should I be making at least 2-3% on my savings?
typical bank rate
beat inflation
that's prime
dollar cost averaging
22
Which one of these does NOT track an index?
Google Stock
Index Fund
ETF
23
Face Value: $100 | Market Price $110 | Coupon: 8% | Yield: ?
9%
7.27%
8%
8.89%
24
Which one of these represents DEBT financing?
Stock
ETF
Mutual Fund
Bell Corporate Bond
25
What is dollar cost averaging?
buying in large lump sums
buying DIFFERENT stocks regularly.
buying blue chip stocks
buying SAME stock regularly to get lower average price
26
Couch Potato means buying the entire market. What does this mean?
All sectors ins mall number of ETFS
Lots of stocks from all over world
Active management via a Mutual Fund
Geography coverage of world through a few ETFS inluding bonds
27
You bought stock at $15. It pays .10 per quarter. Also, the stock currently sells for $20. What is yield?
3.5%
6%
10%
8%
28
Is it "LESS WORK" for YOU to use active management (taking 2.2% fee). Someone will monitor your investments.
Yes, will get higher returns
Yes, helps your mental health
Yes, they earn their fees
No
29
What's the difference between preferred stock and common shares?
Preferred stocks represent most stocks available.
Common stocks pay more dividends
Preferred stocks provide ownership
Common shares have potential for more growth
30
Why is coupon different than yield?
Coupon = Yield
coupon represents discount price
Yield is calculated based on price paid
coupon is calculated basd on price paid
31
Which is FALSE regarding bonds?
The value of a bond changes every day
Bonds are insured to minimize losses
Bonds are very liquid
You can receive interest and capital gains
32
What's the biggest difference between ETFs and Mutual Funds?
Mutual funds have lower MER
ETFs have lower MER
Mutual funds follow index
Mutual funds get higher returns
