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41) When considering your goal of retirement the best strategy is to

A) rely on your employers pension plan.

B) ensure that you have enough cash flow to save in an RRSP.

C) expect CPP and OAS to look after most of your retirement needs.

D) pay off large purchases before opening an RRSP.

42) Managing liquidity is required

A) if your budget is at a deficit.

B) if your credit card is at the limit.

C) if your credit is bad.

D) if you anticipate cash shortages.

43) An important consideration when applying for a loan is that

A) you may not have a good credit rating unless you have borrowed before.

B) a credit card is all you really need.

C) a longer due date is preferred because of the smaller payments.

D) it will not affect the budget you have in place.

44) What kind of insurance is automobile insurance?

A) Liability coverage

B) Accidental death coverage

C) Casualty coverage

D) General insurance

45) The six steps, in correct order, for completing a financial plan would be

A) establish your financial goals, consider your current position, identify alternate plans to reach goals, select and implement a plan, revise the plan if necessary, and evaluate the plan.

B) establish your financial goals, consider your current position, identify alternate plans to reach goals, select and implement a plan, evaluate the plan, and revise the plan if necessary.

C) establish your financial goals, identify alternate plans to reach goals, consider your current position, select and implement a plan, evaluate the plan, and revise the plan if necessary.

D) establish your financial goals, budget, identify alternate plans to reach goals, select and implement a plan, evaluate the plan, and revise the plan if necessary.

46) One area that is difficult to understand but can be a source of unexpected cash flow is

A) exploring tax savings or tax deductions to which you are entitled.

B) RRSP deposits, because they only withhold 10 percent of the withdrawal.

C) defined-contribution plans when you resign from the organization.

D) using the Lifelong Learning Plan to pay for a child's education.

47) You will know your financial plan is working when

A) the plan has been revised to increase your risk tolerance for improved performance.

B) your net worth increases each year in step with your goals.

C) you have sufficient capital to meet all of your established goals.

D) you have reached the highest tax bracket.

48) An example of compounding is

A) buying stocks that do not pay dividends.

B) buying a strip bond.

C) using dividends to pay your cell phone bill.

D) reinvesting dividends to purchase more units.

49) Revising a financial plan

A) should only be done in extreme circumstances.

B) may include changing your goals if you have made them unrealistic.

C) may include borrowing more for a luxury car because you used your savings for a vacation.

D) may be necessary if use up your emergency funds for vacations.

50) If you do not have a financial plan, you will not likely be able to

A) retire.

B) afford a vacation.

C) meet your goals.

D) get married.

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