Seg Mock Exam 4 Questions and Answers 100% Solved

Seg Mock Exam 4 Questions and Answers 100% Solved Barb is currently working at KatCorp and has just received a job offer from another company. She is worried that changing jobs will mean losing her RPP. She has been at KatCorp for 20 years and she does not want to lose her retirement savings. When she meets with her advisor, he tells Barb that she has several options. Which of the following is not an option for Barb? a) Leave her RPP with KatCorp, allowing it to continue to grow b) Move her KatCorp RPP to her new employer's RPP c) Transfer her KatCorp RPP to her RRSP account at the bank d) Use the value of her RPP to purchase a deferred life annuity (correct) Transfer her KatCorp RPP to her RRSP account at the bank Rationale: Barb cannot transfer her RPP to an RRSP account. The pension value of an RPP must be transferred to a locked-in account and no withdrawals can be made until the specified retirement age. (Refer to Section 4.5) Monty is planning to buy a new car in three years. The car is expected to cost $40,000. How much money must he invest today, if he can get a return of 5%, compounded annually? a) $40,000 b) $38,095 c) $34,783 d) $34,554 (correct) $34,554 Rationale: The Present Value (PV) of an investment with a Future Value (FV) of $40,000 after 3 years at a compounded rate of 5% is $40,000 / (1.05)³ = $34,554. (Refer to Section 1.1.3.0) Julie is heavily invested in an equity mutual fund. Her financial advisor tells her about the risks she faces with her investment. What are the risks associated with Julie's