Question 1

Gino Vocci buys and sells shares and bonds and provides advice to his clients on when to buy and when to sell. Vocci works for which of the following type of nondepository financial institution?

Accepted Answer

A)  commodity broker 
B)  brokerage company 
C)  finance company 
D)  shares insurance company

Question 2

When Raven Asan sold 12 shares of Home Depot stock that her father had bought from a business acquaintance and given her as a graduation present, it was on which of the following markets?

Accepted Answer

A)  secondary market 
B)  institutional market 
C)  primary market 
D)  speculative market

Question 3

Dayton Manufacturing Company recently issued a bond to finance a new manufacturing plant in Brampton, Ontario. The land on which the plant will be built has been pledged as collateral. Which bonds has the company issued?

Accepted Answer

A)  indenture bonds 
B)  mortgage bonds 
C)  debenture bonds 
D)  revenue bonds

Question 4

Which of the following are large pools of money set aside by corporations, unions, and governments for later use in paying retirement benefits to their employees or members?

Accepted Answer

A)  pension funds 
B)  unemployment benefits 
C)  workers' compensation funds 
D)  slush funds

Question 5

How has deregulation affected the financial services industry?

Accepted Answer

The answer of How has deregulation affected the financial services...

Question 6

Another term for a chequing account is a time deposit.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a nonprofit, member-owned financial cooperative?

Accepted Answer

A)  savings and loan association 
B)  credit union 
C)  commercial bank 
D)  savings bank

Question 8

How do investors use bond ratings?

Accepted Answer

The answer of How do investors use bond ratings?...

Question 9

Organized stock exchanges operate in a similar manner to which of the following?

Accepted Answer

A)  auction company 
B)  indirect distribution channel 
C)  retailer 
D)  wholesaler

Question 10

Some corporations pay their shareholders in the form of more shares. Which of the following best describes this type of payment?

Accepted Answer

A)  stock dividend 
B)  dividend windfall 
C)  share distribution 
D)  share reward

Question 11

What are junk bonds?

Accepted Answer

The answer of What are junk bonds?...

Question 12

A stock dividend is the distribution of a cash dividend to each person who owns shares in the company.

Accepted Answer

A) True 
 B)False

Question 13

Michaela Petty owns common shares in Procter & Gamble. Last quarter she received a cheque from P&G for $132, which is her share of P&G's distributed profits. Petty has received which of the following?

Accepted Answer

A)  interest 
B)  yield 
C)  dividends 
D)  capital gain

Question 14

If you know the earnings, price, and dividend of a company, it is easy to predict what the shares will do.

Accepted Answer

A) True 
 B)False

Question 15

List the four key characteristics of money if it is to be a suitable means of exchange.

Accepted Answer

The answer of List the four key characteristics of money...

Question 16

Securities are investment certificates issued by corporations or governments.

Accepted Answer

A) True 
 B)False

Question 17

Futures contracts are best described by which of the following?

Accepted Answer

A)  They are a way to buy common shares on a margin. 
B)  They appeal to investors because they are sure providers of retirement income. 
C)  They do not pay dividends. 
D)  They are good investments for risk-averse investors.

Question 18

When Nissan sells a new Sentra and receives the proceeds, the transaction takes place in which of the following markets?

Accepted Answer

A)  private 
B)  public 
C)  secondary 
D)  primary

Question 19

Brokerage companies are paid commissions only when the customer earns a profit.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a financial service that pools its investors' funds to buy a selection of securities and provide professional investment management?

Accepted Answer

A)  debenture 
B)  blue-chip investment 
C)  futures contract 
D)  mutual fund

Exam 17: Understanding Money and the Canadian Financial System

Gino Vocci buys and sells shares and bonds and provides advice to his clients on when to buy and when to sell. Vocci works for which of the following type of nondepository financial institution?

When Raven Asan sold 12 shares of Home Depot stock that her father had bought from a business acquaintance and given her as a graduation present, it was on which of the following markets?

Dayton Manufacturing Company recently issued a bond to finance a new manufacturing plant in Brampton, Ontario. The land on which the plant will be built has been pledged as collateral. Which bonds has the company issued?

Which of the following are large pools of money set aside by corporations, unions, and governments for later use in paying retirement benefits to their employees or members?

How has deregulation affected the financial services industry?

Another term for a chequing account is a time deposit.

Which of the following is a nonprofit, member-owned financial cooperative?

How do investors use bond ratings?

Organized stock exchanges operate in a similar manner to which of the following?

Some corporations pay their shareholders in the form of more shares. Which of the following best describes this type of payment?

What are junk bonds?

A stock dividend is the distribution of a cash dividend to each person who owns shares in the company.

Michaela Petty owns common shares in Procter & Gamble. Last quarter she received a cheque from P&G for $132, which is her share of P&G's distributed profits. Petty has received which of the following?

If you know the earnings, price, and dividend of a company, it is easy to predict what the shares will do.

List the four key characteristics of money if it is to be a suitable means of exchange.

Securities are investment certificates issued by corporations or governments.

Futures contracts are best described by which of the following?

When Nissan sells a new Sentra and receives the proceeds, the transaction takes place in which of the following markets?

Brokerage companies are paid commissions only when the customer earns a profit.

Which of the following is a financial service that pools its investors' funds to buy a selection of securities and provide professional investment management?