© Captus Press Inc., 2012

1. Dermot wants to invest $4,000 to get a fixed return over a short period of time without any risk. He should consider investing in ________.
(a) a government bond
(b) stock mutual funds
(c) term deposit at the TD bank
(d) gold
(e) none of the above
The answer is (c).
© Captus Press Inc., 2012

2. Which of the following investments has positive default risk?
(a) Canada saving bonds
(b) Treasury bills
(c) Guarantee investment certificates
(d) Canada government bond
(e) None of the above
The answer is (c).
© Captus Press Inc., 2012

3. Violetta has the following amounts in a trust company that is a member of the CDIC: $5,000 in her chequing account, $45,000 in term deposits, $15,000 in a joint account with a friend, $30,000 in the trust company’s stock mutual fund. If the company fails, which of the following will not be covered by CDIC insurance?
(a) $ 5,000 in her chequing account
(b) $15,000 in the joint account with a friend
(c) $45,000 in term deposits
(d) $30,000 stock mutual fund
(e) All of the above are covered.
The answer is (d).
© Captus Press Inc., 2012

4. A _________ provision provides the bondholder with an option to sell the bond back to the issuing company for a specified price before maturity.
(a) call
(b) extendibility
(c) convertibility
(d) retractability
(e) zero coupon
The answer is (d).
© Captus Press Inc., 2012

5. Heather plans to invest in a long-term government bond. If she holds the bond until maturity, her return on the bond does not depend on _______.
(a) the coupon rate
(b) the term to maturity
(c) the current price
(d) the future rate of interest
(e) none of the above
The answer is (e).
© Captus Press Inc., 2012