Reference no: EM132413478

Question 1. What Is it the difference between two $400,000 mortgages with identical interest rates and one has a 15-year amortization and one has a 25-year amortization?

A) The15-year amortization mortgage has lower legal fees.

B) The 25-year amortization mortgage has lower interest costs the life of the mortgage.

C) The 25-year amortization mortgage has a lower appraisal fee.

D) The15-year amortization mortgage has a faster buildup of equity.

Question 2. Which one of the following is NOT included in total income for tax purposes?

A) Dividend income

B) Employment income

C) Interest income

D) Life insurance death benefits

Question 3. Which one of the following incomes are taxed at a lower rate?

A) Dividends from a Canadian corporation

B) Interest income

C) Employment income

D) Net rental income

Question 4. What is the most tax-effective way for Emily to receive $100,000 from a Canadian company?

A) Interest

B) Bonus

C) Dividends

D) Salary

Question 5. Farhan purchased shares of Widget Inc. for $3,000 in January 2016 and sold them in 2018 for $4,000. Which one of the following outcomes is correct?

A) Capital loss of $1,000; allowable capital loss of $1,000

B) Capital gain of $1,000: taxable income of $1,000

C) Capital gain of $1,000; taxable income of $500

D) Capital loss of $1,000: allowable capital loss of $500

Question 6. Which one of the following is the most efficient way to reduce income tax?

A) Use transferable credits first.

B) Use refundable tax credits first.

C) Carry forward unused RRSP contribution room.

D) Use non-refundable tax credits first.

Question 7. In 2017 Gabriella purchased 100 common shares of Ajax Corp. for $15 per share later sold them for $20 per share. She also received a $2 per share dividend on shares. What was Gabriella's investment return (ignoring commissions and free)?

A) 13.3%

B 46.7%

C) 17.7%

D) 33.3%

Question 8. Which one of the following is used to measure investment risk?

A) The return needed for success

B) The standard deviation of returns

C) Time value of money

D) Range of returns of the entire market

Question 9. Big Sea Inc.'s shares have a P/E ratio of 10. What does this mean?

A) The share price is 10 times the company's revenue per share.

B) The share price is 10 times the company's earnings per share.

C) The share price is 10 times the company's book value per share.

D) The share price is 10 times the company's dividends per share.

Question 10. Which one of the following is used to evaluate the Iliquidify of a firm?

A) Return on net assets

B) Current ratio

C) Inventory turnover

D) Debt ratio

Question 11. Cyber Inc.'s P/E ratio is 20 and the industry average P/E ratio is 15. Which statements are correct regarding Cyber Inc. 's share valuation versus?

A) Overvalued

B) Undervalued

C) Market valued

D) Fairly valued

Question 12. Which one of the following is a trading order to execute a transaction to the price is within the range specified?

A) Written order

B) Market order

C) Limit order

D) Stock order

Question 13. Which one of the following represents equity or ownership of a corporation?

A) Long-term loans

B) Commercial paper

C) Common shares

D) Corporate bonds

Question 14. What is the largest market for trading existing securities?

A) Primary market

B) Spot market

C) Secondory market

D) Over-the-counter market

Question 15. Assuming similar incomes, age, gender and health condition disability insurance w most for which one of the following occupations?

A) insurance broker

B) Deep-sea fisherman

C) Attorney

D) Computer programmer