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