16 Questions
What are some uses of credit? (Select all that apply)
Emergencies
What is the difference between saving and investing?
Saving means safely putting money aside for future use. Investing is using your savings to earn extra income.
Define ______: The rate at which the general level of prices for goods and services is rising and consequently, the purchasing power of currency is falling.
inflation
Discretionary Income is the amount that is left after income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) are deducted.
False
What are the 4 functions of money?
Standard of value
Which of the following statements best describes a limit order?
It provides control over the trade price, but the trade may not be executed if the price is not reached
Setting up a personal financial plan requires establishing realistic and achievable short and long term goals.
True
What does GIC stand for?
Guaranteed Investment Certificates
What is the primary advantage of using a market order to buy or sell a stock?
Guarantees the trade will be executed quickly
As expected return increases, so does your risk
True
The ______ refers to the highest price a buyer will pay for a security. The ______ refers to the lowest price a seller will accept for a security.
bid price, ask price
Name one thing that could affect your credit rating?
missed payment
Which of the following is a benefit of Exchange-Traded Funds (ETFs)?
They offer diversification and low fees
Explain what a term deposit is?
Deposit a fixed sum of money for a specific period of time
Which of the following financial metrics indicates how much investors are willing to pay per dollar of a company's earnings?
Price-to-Earnings (P/E) Ratio
Name 3 products that banks offer?
loans, credit cards, currency exchange
Study Notes
Personal Finance
- Discretionary income is the amount of money left after income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) are deducted.
- Setting up a personal financial plan requires establishing realistic and achievable short and long-term goals.
Functions of Money
- The four functions of money are:
- Medium of exchange
- Standard of value
- Store of value
- Standard of future payment
Trading and Investing
- A limit order is a type of order that allows for price control and ensures the trade is executed regardless of market conditions.
- A market order is a type of order that guarantees the trade will be executed quickly.
- The bid price is the highest price a buyer will pay for a security, while the ask price is the lowest price a seller will accept for a security.
- Exchange-Traded Funds (ETFs) offer diversification and low fees.
- Diversification is a key principle in investing, as it reduces risk by spreading investments across different asset classes.
Credit and Debt
- The three C's of credit are:
- Character: a borrower's willingness, reliability, and trustworthiness to make loan repayments
- Capacity: a borrower's ability to make payments on time
- Capital: the value of a borrower's assets that could be used to repay debt
- Credit is used for personal items, such as home, car, or concert tickets, and provides instant enjoyment, convenience, and emergencies.
- The downsides of credit include credit costs, impulse buying, overbuying, and financial difficulties.
Banking and Financial Institutions
- The Bank of Canada is the primary financial institution in Canada.
- TD Bank is a Schedule I bank, not a Schedule II bank.
- Banks offer various products, including debit cards, credit cards, loans, and cheques.
- Banks make money through interest charged and investing other people's money.
Stocks and Bonds
- Common stocks give owners a voice in the operation of the business and allow them to attend annual meetings and vote.
- Preferred stocks have no voting rights, but preferred shareholders are paid first and usually receive higher pay.
- A bond is a debt security issued by corporations, municipalities, or governments to raise capital.
Economy and Inflation
- Inflation is the rate at which the general level of prices for goods and services is rising, and consequently, the purchasing power of currency is falling.
- A higher expected return often comes with higher risk.
This quiz assesses understanding of financial concepts, including discretionary income, income tax, and government insurance plans. Test your knowledge of personal finance and budgeting.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
