Exam 4: Personal Investing - Investing Fundamentals

If you wish to supplement your retirement by saving $200000 in 25 years,how much more would you have to save monthly if you saved the money outside rather than in an RRSP? Consider that investment returns should provide a yield of 8.5 percent compounded monthly and your tax rate is 30 percent,so the after tax return would be 5.95 percent.

You have been given an overview of stocks,bonds,and mutual funds.Give one advantage and one disadvantage of investing in each of these.

Investing in growth stocks usually refers to

Your investment portfolio matches your risk profile perfectly but you are not meeting your investment goals.You should remedy this by

For your retirement you want to have enough funds in your RRSPs to provide an income stream of $22 000 for 30 years.How much money would you need to have accumulated if your RRSPs averaged a real return of four percent per year? (Round to the nearest thousand)

When the Blackberry share price fell due to disappointment after the launch of their new phone,that is an example of systematic risk.

Low-risk bonds tend to offer higher interest payments.

Find an online questionnaire designed to determine your tolerance to investment risk.Explain how the results would suggest you invest funds for the following goals,purchasing a home in seven years and for retiring in 35 years.Indicate the asset allocation you would use for each of these purposes based on your risk tolerance.Explain why the textbook suggests that your asset allocation in your early career should be mostly stocks and in retirement should be mostly bonds and why there could be exceptions to this general rule.

Before you start to invest,you should ensure you have liquidity by owning

Given the bank rate of 3 percent,purchasing an investment with a 9 percent risk premium means

Last year you held the following investments: $50 000 in bonds,which earned 5.5 percent last year $5000 in shares of Moose Pasture Minerals,which lost 22 percent last year $10 000 in shares of Amalgamated Monkey Nuts,which earned 12 percent last year $20 000 in Offshore Diversification Mutual Fund,which earned 8 percent last year $15 000 in XIU exchange-traded fund,and the TSX was up 11 percent last year Show how you determine the return on the portfolio for last year,and what it is worth now?

You are investing to achieve the following goals: A down payment for a cottage in the amount of $8000 in six years,$4000 for a trip to Europe in three years,and $150000 to supplement retirement income in 24 years.If you can earn 7 percent compounded monthly on your investments,how much should you be saving each month?

If you predicted that a stock would be worth $40 in five years and that you wanted to get a nine percent average annual return,what price should you be willing to pay for it now? (Assume no fees or taxes.)

Stocks that are undervalued by the market for reasons other than the performance of their business are called

Owners of common stock have the right to vote on key corporate issues and have the last claim to the profits of a company.

The return-risk relationship means

Corporate bonds

You have $10 000 to invest now and can add $550 a month,have a moderate risk profile,and would like to set these funds aside for retirement in 20 years.Your most appropriate option would be to

Amalgamated Monkey Nuts Inc.has a range of returns between 4 percent and 7 percent while Moose Pasture Minerals Ltd.has a range of returns between 3 percent and 10 percent.This means

In the secondary market,stock prices are