Quiz 2 Tutorial review
November 14, 2023
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QUIZ LOGISTICS and ACADEMIC INTEGRITY
QUICK OVERVIEW:
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HOUSING
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INSURANCE
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INVESTMENTS
All quizzes and exams in this course are open book. Students
are permitted to use
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course readings, lessons,
etext, glossary, formulas
lecture notes,
internet
calculators
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Online quiz.
Able to start as of MONDAY, November 20th (8:00 AM) with
the link closing on WEDNESDAY, November 22nd (11:59 PM).
Once you start, you will have 60 minutes to complete and
submit (plus a 5-minute grace period), so essentially 65
minutes.
Quiz automatically saves.
The quiz is to be done on your own; this is an individual
assessment worth 15% of your grade.
Quiz 2 - to start
 Go to the “Assessments” icon in your eConcordia portal.
 Click on the link to Quiz 2.
 You will be asked to “Preview Quiz now ”. Once you hit this
key, your quiz will start with the clock starting to count down.
The quiz will shut down after 65 minutes.
 If you log out of the quiz in error but within the 65 minutes,
you will be able to return to the quiz and continue. However,
be careful not to refresh your internet browser or log out of
the website at any time during the quiz.
 Make sure that you take the quiz in an area that has strong
internet connectivity. During this time period, friends and
family should be off gaming/Netflix etc. 
By way of example only, academic offences include:
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Plagiarism;
Contribution by a student to another student’s work with the
knowledge that such work maybe submitted by the other student as
their own;
Unauthorized collaboration;
Obtaining the questions or answers to a quiz/exam or other
unauthorized resource;
Use of another person’s quiz/exam during a quiz/exam;
Communication with anyone other than the instructor/invigilator
during a quiz/exam and any unauthorized assistance during a
quiz/exam;
Impersonation;
Falsification of a document, a fact, data or a reference.
For more information about academic misconduct and academic
integrity, refer to the Academic Code of Conduct and Concordia
Academic Integrity and the Academic Code of Conduct
When taking any of
the quizzes or exams, you are
agreeing to the Academic
Integrity and the Academic
Code of Conduct
Example of what is not permitted:
1.
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Online searching of related quiz/exam questions is not
permitted.
Communicating with classmates regarding any aspect of the
quiz/exam or course once you begin the quiz/exam is not
permitted
Posting or sharing the quiz/exam content, including
quiz/exam questions, or your answers both during and after
submission is not permitted.
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If you encounter any technical issues (e.g. internet
connectivity) while taking the quiz, please contact eConcordia
at helpdesk@econcordia.com and copy me at
FINA200@econcordia.com as well as your TA.
I recommend that you start the quiz as soon as possible but
no later than 10:54 PM on Wednesday, November 22nd (as
the quiz closes at 11:59 p.m. sharp).
Your grade will be posted a few days later.
This quiz is worth 15% of your grade.
Try the Sample Quiz 2!
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you can find it under the Assessment’s tab
it is not graded and I do not see your results
You can do the sample quiz unlimited times
30 multiple choice questions
from a bank of questions,
selected randomly:
Chapter
Chapter
Chapter
Chapter
Chapter
7
8
9
10
13
8
4
4
7
7
questions
questions (L.O.2 & 3)
questions (L.O. 3, 6 & 8)
questions
questions
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Know ratios based on the etext:
 Gross Debt Service (GDS): no more than 32%
 Mortgage, heating, property taxes, 50% condo
fees/income
 Total Debt Service (TDS) no more than 40%
 Mortgage, heating, property taxes, 50% condo fees +
consumer debt/income
*remember to put over all monthly or all annual
Following is not examinable but good to know:
Stress Test on Conventional Mortgages: Home buyers with a down payment of 20% or
more are subject to a stress test using the Office of the Superintendent of Financial
Institutions (OSFI) minimum qualifying rate or the customer’s mortgage interest rate plus
2% - whichever is higher.
As of January 1, 2023, the Prohibition on the Purchase of Residential Property by NonCanadians Act is in effect. This means that banks are only able to lend mortgage monies
to Canadian Citizens, Permanent Residents, or Indians as defined under the Indian Act, or
other persons as set out in the Act.
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Conventional mortgage (20% down payment)
vs.
High-ratio mortgage and mortgage loan insurance (i.e.
default insurance)
◦ CMHC Mortgage loan insurance protects the banks
while allowing homebuyers to purchase property even
if they only have 5% as a downpayment.
◦ Pre-approval certificate provides you with a guideline
on how large a mortgage you can afford based on
your financial situation.
Why have insurance (protection for you and your family
especially on those who are financially dependent on you;
reduce stress during difficult times (unforeseen tragedies,
accidents; financial security)
 Auto
 Home Insurance
 Disability
 Life insurance
The Home Buyers' Plan (HBP) is a program that
allows you to withdraw funds from your Registered
Retirement Savings Plans (RRSPs) to buy or build
a qualifying home for yourself or for a
related person with a disability.
First time homebuyer.
The HBP allows you to pay back the withdrawn
funds within a 15-year period.
The HBP withdrawal limit is $35,000 (for withdrawals
made after March 19, 2019).
Mutual funds
◦ Advantages
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Diversification
Economies of scale
Easier to track
Easy access
Access to professional money managers
◦ Disadvantages
 Tax inefficiencies (capital gain distributions)
 Lack of liquidity
 Fees
 Front/Back-End Load, No Load
 Management Expense Ratio (MER’s)
Mutual fund example (Fund Fact)
https://www.rbcgam.com/en/ca/products/mutual-funds/RBF263/detail
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Investment returns
◦ Interest (savings accounts, certificates of deposit,
bonds, government securities, mutual funds
holding interest bearing investments)
◦ Dividends (common and preferred shares (stocks))
◦ Capital Gains (sale of bonds, common shares,
preferred shares, real estate* (building, cottage),
mutual funds etc.)
*sale of a home can be considered a Principal Residence
where the capital gain is declared in the tax return for the
sale but no taxes are paid on the gain.
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Types of Mutual Funds
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Know about the tax impacts
◦ Interest
◦ Capital gains
◦ Dividends
◦ Maximum Combined Personal Rates 2022
◦ Source: Copyright 2022 by Tax Templates Inc
Capital gain
◦ if the value of the asset increases from the original
purchase price, you have a capital gain and need to
declare in your tax return and pay tax
◦ increases in value on stocks (shares), mutual fund,
exchange traded fund, real estate from the original
purchase price
◦ Only 50% of the gain is included = taxable capital gain
Example: Joe purchased shares in ABC Inc. for $5,000 in
2021. He sells them in 2022 for $7,500.
Capital gain = $2,500 ($7,500 - $5,000)
Taxable capital gain to report on tax return is $1,250 (50% x $2,500)
Example: Joe purchased shares in ABC Inc. for $5,000
in 2021. He sells them in 2022 for $7,500.
Capital gain = $2,500 ($7,500 - $5,000)
Taxable capital gain to report on tax return is $1,250 (50% x $2,500)
Example: Joe purchased shares in CDE Inc. for $5,000
in 2021. He sells them at a loss in 2022 for $3,000.
Net capital loss: $1,000 (50% x $2,000)
Capital loss = $2,000 ($3,000 - $5,000)
Taxable capital gain – net capital loss is reported as a Taxable capital
gain $1,250 - $1,000 = $250 Taxable capital gain
Example:
Capital gain = $2,500 ($7,500 - $5,000)
Taxable capital gain to report on tax return is $1,250 (50% x $2,500)
Capital loss = $2,000 ($3,000 - $5,000)
Net capital loss (or allowable capital loss) to report on tax return as a
deduction against taxable capital gains is $1,000 (50% x $2,000)
Joe’s 2022 tax return:
Joe will pay taxes on the net $250
Joe can only use the net capital loss against capital gains.
Joe can go back three years to claim against previous years capital gains or
carry it forward indefinitely to be used against future years capital gains
Example Dividends
Gross-up: Currently, the gross-up rate is 38% for the eligible dividends
and 15% for the other than eligible dividends.
 If you received $200 worth of eligible dividends and $200 worth of
other than eligible dividends, you would have to gross up your
dividends by 38% and 15%, respectively. So, you would claim $506 as
dividend income on your return:
• Taxable amount of the eligible dividends = $200 X 1.38 = $276;
then
• Taxable amount of the other than eligible dividends = $200 X 1.15
= $230
• Total taxable amount = $276 + $230 = $506
Dividend Tax Credit:
 The $200 eligible dividend had a grossed up value of $200 x 1.38 =
$276, so your federal tax credit = $276 X 15.0198 percent = $41.45
 The $200 other than eligible dividend had a grossed up value of
$200 x 1.15 = $230, so your federal tax credit = $230 X 9.0301
percent = $20.77
• Total federal credit = $41.45 + $20.77 = $62.22
Interest
◦ Interest income is 100% taxable, while dividend
income is eligible for a dividend tax credit in Canada.
Dividends
◦ Dividend income is eligible for a dividend tax credit
(dividends are grossed-up with a subsequent
dividend tax credit applied).
Example: In Quebec, in the 53.31% tax bracket, you'll
pay $533.10 in taxes on $1,000 in interest income,
and you will pay $400.00 on $1,000 in dividend
income.
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Know about these tax strategies
◦ Contributions to
 Registered Retirement Savings Plan (RRSP)
 Tax-Free Savings Account (TFSA)
 Registered Education Savings Plan (RESP)
◦ Understand withdrawals and impacts from:
 Registered Retirement Savings Plan (RRSP)
 Registered Retirement Income Funds (RRIF)
◦ Understand withdrawals from:
 Tax-Free Savings Plan (TFSA)
Any questions?
Put a reminder in your calendar as there are no
exceptions, no extensions
Quiz 2 opens on MONDAY, November 20rh at 8:00
AM and closes on WEDNESDAY, November 22nd at
11:59 PM
Chapters 7-10 and 13