FP1 FINAL SCRIPT 2026 ASSESSMENT
QUESTIONS ANSWERS COMPLETE A+
◉ What category generally represents the largest expenditure of the
average Canadian family and commonly offers the least flexibility?
A. Food.
B. Housing.
C. Health care.
D. Transportation.
Answer: B. Housing.
General Feedback:
The housing cluster represents the largest percentage of spending
for most households and is usually the spending area with the least
flexibility. Reference: Module 2 Section 1.
◉ What are the three steps involved in creating a budget?
A. Set savings goals; determine expenses to cut; review budget
monthly.
,B. Calculate total income; determine fixed survival costs; calculate
quarterly budget.
C. Set savings goals; determine expenses to cut; review budget
annually.
D. Calculate total income; determine expense priority; calculate
semi-annual budget.
Answer: A. Set savings goals; determine expenses to cut; review
budget monthly.
General Feedback:
The three steps to creating a budget are: set savings goals;
determine expenses to cut; review budget monthly. Reference:
Module 2 Section 1.
◉ Calculate this household's Gross Debt Service Ratio (GDSR) given
the following information.
Annual household income (gross amount): $100,000
Monthly mortgage payments: $2,000
Annual property taxes: $5,000
Annual heating costs: $1,440
Total credit card balances outstanding: $20,000.
A. 8%.
,B. 30%.
C. 20%.
D. 50%
Answer: B. 30%.
General Feedback:
The calculation is: Annual Mortgage Payments $24,000 + Property
Taxes $5,000 + Heating Costs $1,440 divided by Annual Income
$100,000. This equals $30,440 ÷ $100,000 = 30.44%. Reference:
Module 2 Section 2.
◉ Identify the correct description of what "not in advance" refers to
in Canadian mortgages.
A. There are no prepayment options allowed on the loan.
B. The principal payment is deducted before the interest is
calculated on the loan.
C. Prepayments are only allowed on the anniversary date of the loan,
not in advance of that date.
D. The mortgagor cannot pay off the mortgage in advance of the
maturity date.
Answer: B. The principal payment is deducted before the interest is
calculated on the loan.
, In the example with Bryan Lee and Imre and Katrina Docek, he
advises the couple to take advantage of the "not-in-advance"
calculation of interest by making an annual lump-sum payment on
the loan. When they make two mortgage payments at once on an
annual basis, the extra payment goes directly toward the principal.
This shifts the interest-to-principal ratio and eliminates the debt
sooner. Reference: Module 2 Section 2.
◉ Select the most common Canadian mortgage repayment term and
amortization period.
A. One year term and 15 year amortization period.
B. Two year term and 20 year amortization period.
C. Five year term and 25 year amortization period.
D. Ten year term and 35 year amortization period.
Answer: C. Five year term and 25 year amortization period.
A mortgage term can range from six months to 10 years and in rare
cases up to the length of the amortization. The standard repayment
term in Canada tends to be five years, and the standard amortization
period is 25 years, although it can be as long as 30 years. Reference:
Module 2 Section 2.
◉ What will result from choosing accelerated mortgage payments?
QUESTIONS ANSWERS COMPLETE A+
◉ What category generally represents the largest expenditure of the
average Canadian family and commonly offers the least flexibility?
A. Food.
B. Housing.
C. Health care.
D. Transportation.
Answer: B. Housing.
General Feedback:
The housing cluster represents the largest percentage of spending
for most households and is usually the spending area with the least
flexibility. Reference: Module 2 Section 1.
◉ What are the three steps involved in creating a budget?
A. Set savings goals; determine expenses to cut; review budget
monthly.
,B. Calculate total income; determine fixed survival costs; calculate
quarterly budget.
C. Set savings goals; determine expenses to cut; review budget
annually.
D. Calculate total income; determine expense priority; calculate
semi-annual budget.
Answer: A. Set savings goals; determine expenses to cut; review
budget monthly.
General Feedback:
The three steps to creating a budget are: set savings goals;
determine expenses to cut; review budget monthly. Reference:
Module 2 Section 1.
◉ Calculate this household's Gross Debt Service Ratio (GDSR) given
the following information.
Annual household income (gross amount): $100,000
Monthly mortgage payments: $2,000
Annual property taxes: $5,000
Annual heating costs: $1,440
Total credit card balances outstanding: $20,000.
A. 8%.
,B. 30%.
C. 20%.
D. 50%
Answer: B. 30%.
General Feedback:
The calculation is: Annual Mortgage Payments $24,000 + Property
Taxes $5,000 + Heating Costs $1,440 divided by Annual Income
$100,000. This equals $30,440 ÷ $100,000 = 30.44%. Reference:
Module 2 Section 2.
◉ Identify the correct description of what "not in advance" refers to
in Canadian mortgages.
A. There are no prepayment options allowed on the loan.
B. The principal payment is deducted before the interest is
calculated on the loan.
C. Prepayments are only allowed on the anniversary date of the loan,
not in advance of that date.
D. The mortgagor cannot pay off the mortgage in advance of the
maturity date.
Answer: B. The principal payment is deducted before the interest is
calculated on the loan.
, In the example with Bryan Lee and Imre and Katrina Docek, he
advises the couple to take advantage of the "not-in-advance"
calculation of interest by making an annual lump-sum payment on
the loan. When they make two mortgage payments at once on an
annual basis, the extra payment goes directly toward the principal.
This shifts the interest-to-principal ratio and eliminates the debt
sooner. Reference: Module 2 Section 2.
◉ Select the most common Canadian mortgage repayment term and
amortization period.
A. One year term and 15 year amortization period.
B. Two year term and 20 year amortization period.
C. Five year term and 25 year amortization period.
D. Ten year term and 35 year amortization period.
Answer: C. Five year term and 25 year amortization period.
A mortgage term can range from six months to 10 years and in rare
cases up to the length of the amortization. The standard repayment
term in Canada tends to be five years, and the standard amortization
period is 25 years, although it can be as long as 30 years. Reference:
Module 2 Section 2.
◉ What will result from choosing accelerated mortgage payments?
