Question 1

Your employer has a contributory group RRSP under which he matches employee contributions, up to amaximum of 5% of salary.Which of the following statements about a group registered retirement savings plan (RRSP) is CORRECT?

Options :

A : It is more costly and time consuming to administer than traditional pension plans.

B : If you leave your employer, your group RRSP stays with the employer.

C : You need to wait until you file your taxes to receive your contribution tax deduction.

D : The employer chooses the plan provider.

Answer: D

Question 2

Ken is a member of his employer’s Defined Benefit Pension Plan (DBPP). Which of the following statementsabout Ken’s plan is CORRECT?

Options :

A : Contributions to the plan do not result in a Pension Adjustment (PA) for Ken.

B : The amount Ken receives in retirement depends on the performance of the investments he has selectedwithin the plan.

C : The amount that Ken will receive at retirement is not guaranteed.

D : Income received from the plan is eligible for pension income splitting even if Ken retires before 65.

Answer: D

Question 3

When selecting an investment to add to a portfolio, what feature would reduce the overall risk?

Options :

A : High standard deviation

B : High beta

C : Low variance

D : Low alpha

Answer: C

Question 4

Which of the followings describes segregated funds?

Options :

A : Segregated funds have high returns, high management fees, and cannot be redeemed until the maturitydate of the contract.

B : Segregated funds flow through capital losses to investors because the investors are the owners of theunderlying fund.

C : Segregated funds offer some protection of the capital invested but there is an added cost for theprotection.

D : Segregated funds are subject to securities regulation because they are distributed by mutual funddealing representatives.

Answer: C

Question 5

Pierre buys a call option on a stock. What is the implication of this transaction?

Options :

A : Pierre has the right to buy the stock if he exercises the option.

B : Pierre is obligated to sell the stock if the option is exercised.

C : Pierre has the right to sell the stock if he exercises the option.

D : Pierre is obligated to buy the stock if the option is exercised.

Answer: A

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