Risk and Investments
Types of Risk
Currency convert & buy, may not make as much on currency exchange
Political war? Pull out. Stock prices drop even tho no connection to war. Feel
Types of Investments
COMM329: Chapter 1- Classroom / Homework Quizzes and Questions (Exam Preparation)
1) Personal finance does not include the process of planning your
2) A personal financial plan specif
COMM329: Chapter 5 - Classroom / Homework Quizzes and Questions (Exam Preparation)
1) Financial institutions loan funds at
A) lower interest rates than depositors receive.
C) rates equal to what savers receive.
B) higher interest rates than
COMM329: Chapter 2 - Classroom/Homework Quizzes and Questions (Exam Preparation)
1) The present value needed to receive $200 10 years from today, with an interest rate of 10 percent, is about
A) $65. B) $77.
E. None of these
Personal CF Statement: James and Janet
Per Month Year 2016
Tax@25% (8,600 x .25)
Principle Residence can only have one nice tax break in Canada. Cabin would be
Adjusted cost base (ACB)
Fair Mrkt Value (FMV)
of capital gain is tax free, $175,000 taxable. Pay
Individual Retirement Plans
RRSP Registered Retirement Savings Plans
Governments way for you to save money for your retirement
Came in before CPP
18% of earned income in a retirement plan
Tax-deductible so there is a cap on how much you can put it
Government Programs and Wills and Estates
RIFF 10% at 85. Minimum payment 7.38%* that has to come out of a RIFF.
Value of December 31 that you turn 71. Hint for the exam.
RRSPs on death are transferable tax free to spouse, money is tax
5 core basic components
1. Life insurance
Gives employer a sense of duty and provide protection to
Multiple of salary average age employee groups(if 20 and
average is 45 at a disadvantage)
Flat amount everyone $10 k
Systematic Accumulation + Time = Wealth
The steps in Financial Planning
Overview of Wealth Accumulation Process (Ians model)
I am human capital, I generate income from work (where it all starts). I ha
Who Owns the Policy?
Owner takes out policy, pay premiums (buy for spouse, decide all terms, $s,
Life Insured life who placing insurance on (has no say in the policy unless they
are the owner)
Beneficiary who will receive the money
Established to do whatever you want with a 21 year max
If the beneficiary is under 18, cant have access to the money
Trust as a person entity tax treatment as if a person
Three people in a trust
Settler deposit assets into trust. Cant be the benefi
Segregated Funds, RRSPs, and Pensions
A segregated fund is an investment fund that combines the growth potential of a
mutual fund with the security of a life insurance policy. Segregated funds are
often referred to as "mutual funds with a
Convert to RRIP at anytime unless locked and wait until age 55 BUT RRSP money under
all circumstances whether RRIF OR add hock withdrawals is fully taxable!
Earnings and deposits are both fully taxable except 2 Government Programs:
#1: Home Buy
COMM329: Chapter 3- Classroom / Homework Quizzes and Questions (Exam Preparation)
1) The personal cash flow statement measures
A) the rate of cash flow.
B) cash outflows only.
C) cash inflows and outflows.
D) cash inflows only.
2) The import