What is a trustee?
Calculate the NAVPS for a mutual fund with the following values:Market value of securities in the portfolio ..................... $1.2
How do loads affect a fund’s return? Why do some investors purchase load funds? How does an investor purchase a no-load fund?
What is reinvestment risk?
What is inflation risk? What is the relationship between inflation risk and the real rate of return on a bond?
What may happen if the value of the stock bought on margin declines?
Describe electronic trading.
Considering the information in problem 7, how much life insurance should they purchase for Murtaz?
Roberto is married and has two children. He wants to be sure that he has sufficient life insurance to take care of his family if he dies. Roberto’s
Ingrid’s employer provides her with two times her annual gross salary in life insurance. How much additional insurance should she purchase based on
Ingrid is a widow with two teenage children. Her total income is $3000 per month, and taxes take about 30 percent of this income. Using the income
What is reinstatement? How does it work?
Explain the benefit of the grace period.
What is permanent insurance? Define the terms cost of insurance and cash value.
What is term insurance?
What is the responsibility of the insurance company that sells you a policy? How do insurance companies determine their profits?
What is a convertible mortgage?
What is the main factor in determining a home’s resale value? How can you predict a home’s resale value?
If you find an error on your credit card statement, how do you prove that an error was made?
What is the credit score range? What is a good score? If you have good credit, will you automatically be approved for a loan?
Define and describe credit.
Bart, 19, received $1000 from his grandparents as a birthday present. He wants to use this money to purchase a new $1200 mountain bike. Since he does
Hamza has recently received a bonus of $5000 from her employer. She is not sure what she would eventually like to do with this money. For the time
Compare and contrast the return and liquidity characteristics of the various money market investments. Give specific examples.
Compare and contrast savings accounts and chequing accounts.
What features of a tax-free savings account (TFSA) allow it to be considered a very flexible savings alternative?
Define and describe automated banking machines (ABMs).
Why is it important to keep track of your account balance?
Define and describe credit unions and caisses populaires.
What is a tax-free savings account (TFSA)? How can it help to reduce tax payable?
Dennis and Nancy are in their early twenties and have been married for three years. They are eager to purchase their first house, but they do not
Bill and Ann have the following liabilities:Mortgage ...................................... $43 500Car loan
Bill and Ann have the following assets:Fair Market ValueHome ............................................ $85 000Cars
How are net cash flows determined?
Judith has just become eligible to participate in her company’s retirement plan. Her company matches her contributions dollar for dollar. The plan
What formula is used when determining the present value of a single dollar amount?
Randi Dallaire, 23, just graduated from college with a degree in marketing and landed her first job with a local advertising agency. Now that she has
Odell pays $8500 for a bond that pays an annual dividend of $300. The bond has a par value of $10 000. If Odell holds the bond until it matures in
Is it legal or ethical for an insurance agent to suggest a variable life insurance policy to an 80-year-old man? Explain your answer.
Outline a personal insurance plan with the following phases:a. Identify personal, financial and property risks;b. Set goals you might achieve when
What do you believe are the most important factors a person should consider when selecting housing?
Describe how advertisements, news articles, online sources, and personal observations might be used to make wiser buying decisions.
For the following main sources of personal finance information, list a specific web site, organization or person who you might contact in the future.
Listed here are the eight the main components of personal financial planning. Circle one or more areas and describe an action that you might need to
For three of the questions in Table 1.3, write a concise and descriptive response. Practice your answers, and then present them to someone willing to
Explain how your financial situation is related to your career aspirations.
Considering the influence of finances on couple relationships, identify at least three smart financial strategies someone wanting to form a
Issie is a new high school graduate. She is excited about the field of nursing, loves international travel and people. She thinks the Peace Corps
A highly rated corporate bond with 5 years left until maturity was recently quoted as selling for 103.50. The bond’s par value is $1,000, and its
1. Identify seven sources of vehicle purchasing information and the type of information available from each source. 2. From all the information
Bee and Barney Mayberry have $71,500 in gross income and enough allowable deductions to itemize. Determine the best income tax form for them to use
You are offered $100,000 today or $300,000 in 13 years. Assuming that you can earn 8 percent on your money, which should you choose?
Your mother just received a $250,000 inheritance. If she invests her money in a diversified equity portfolio returning 8 percent per year,
Linda Baer has already saved $6,500 to buy a used vehicle. Ignoring taxes and assuming her money is invested in a money market account earning 3
1. Assuming Doug has another account set aside for emergencies, how much can he withdraw on a monthly basis to supplement his retirement annuity if
Paul just graduated from college and landed his first “real” job, which pays $33,000 a year. In 10 years, what will he need to earn to maintain
Calculate the future value of $5,000 earning 5 percent after 1 year, assuming annual compounding. Now, calculate the future value of $5,000 earning
If another Austin Powers movie had been released in 2018 and Dr. Evil, now armed with a financial calculator, wants to hold the Earth ransom for
Richard is 65 years old and about to retire. He has $500,000 saved to supplement his pension and Social Security and would like to withdraw it in
If you deposit $3,500 today into an account earning an 8 percent annual rate of return, what will your account be worth in 35 years (assuming no
Sarah Wiggum would like to make a single investment and have $2 million at the time of her retirement in 35 years. She has found a mutual fund that
In March 1963, Ironman was first introduced in issue number 39 of Tales of Suspense. The original price for that issue was 12 cents. By March 2018,
The Lees, a family of two adults and two dependent children under age 16, had a gross annual income of $68,000 for 2017. Determine their standard
1. Identify the stage of the life cycle that best describes Cory and Tisha today. What important financial planning issues characterize this
Consider three investors who need to partially liquidate investments to raise cash. In this case, all investments have been held for 3 or more years.
Sukeeta, a young mother, is preparing to file her 2017 income tax return. Her husband, who was tragically killed in a boating accident in the summer
A couple with three dependent children has an annual AGI of $238,500. Calculate the total dollar amount of personal exemptions that they can claim
Calculate the total 2017 tax liability for a surviving spouse with one dependent child with a gross income of $46,250, no salary reductions for
Calculate the 2017 total tax for Gordon Geist, a single taxpayer with no dependents and no itemized deductions. He has an active income of $40,000, a
Aliza Grajek is a self-employed nurse with 2017 gross income of $68,000 and taxable annual income (federal and state) of $55,000 after adjustments,
Calculate the after-tax return of a 4.65 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket. Compare
Assuming a 1-year money market account investment at 1.5 percent (APY), a 2.5 percent inflation rate, a 25 percent marginal tax bracket, and a
You just took out a variable-interest-rate consumer loan set at 3 percent over prime. After 1 year, your rate jumps to 4 percent over prime. Treasury
1. After reviewing the earnings multiple approach and the needs approach, Cory and Tisha opt for the simpler earnings multiple approach to estimate
Bill Buckely has split-limit 25/50/10 automobile liability insurance on his 2012 Subaru. Driving home from work in a snowstorm, he hit a Mercedes,
Jana just found out that she is going to receive an end-of-year bonus of $40,000. She is in the 25 percent marginal tax bracket. Calculate her income
Match each of the following behaviors with the appropriate bias, as discussed in the chapter. a. Wanda owns shares in Happy Clam Oil
The Gizmo, Inc has just announced year-end results as follows: Value of company
Suppose that you are interested in purchasing a bond issued by the VPI Corporation. The bond is quoted in the Wall Street Journal as selling for
Mason is thinking about getting married. What advice would you give him regarding how much to budget for the engagement ring, wedding, and honeymoon?
Grady Zebrowski, age 25, just graduated from college, accepted his first job with a $50,000 salary, and is already looking forward to retirement in
Sedki earned $129,750 in 2017. How much did he pay in Social Security taxes? In Medicare taxes? In total FICA taxes? (Hint: Don’t forget the annual
1. Assuming the deathclock.com projection is accurate, Cory is concerned about getting back as much as possible of his Social Security taxes. At what
Morgan, a widow, recently passed away. The value of her assets at the time of death was $8,600,000. The cost of her funeral was $18,000, while estate
Determine which of the following gifts are subject to gift taxes and to what extent they need to be included in an estate. a. Grandparents gave
Upon her grandmother’s death, So-hyun received $100,000 to use for college expenses or for starting her family. The money is in a checking account
What are some of the key financial topics that should be discussed toward the beginning of a serious relationship?
Explain whether the following consumer goods are classified as good or bad debt. Explain your rationale. a. Mortgage b. Home equity line of
How do you determine whether you should refinance? Under what circumstance is mortgage refinancing most beneficial?
What is a rate modification? Differentiate between a rate modification and mortgage refinancing.
What is mortgage refinancing? Describe when it would be advantageous to refinance your mortgage.
Describe and differentiate between the costs associated with renting or buying a home.
Describe the characteristics of a variable-rate mortgage. What influences your choice between a fixed-rate and variable-rate mortgage?
Describe how the mortgage amount, the interest rate, and the amortization period affect the amount of the monthly mortgage payment.
Define and describe an amortization schedule.
What are prepayment privileges? Why are they important?
Define and differentiate between a closed mortgage and an open mortgage.
Describe the various types of mortgage payment frequencies that are available. Which mortgage payment frequencies allow you to pay off your mortgage
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