Seg Funds and Mutual Funds
<>QUESTIONS WITH CORRECT
ANSWERS
\.On November 6, 2016 Jenny purchased a $200,000 non-registered segregated fund that
invests in Canadian equities. The segregated fund has a 10 year, 75% maturity guarantee. If this
fund matures on November 6, 2026 with an account value of $160,000, how much will Jenny
receive from the maturity guarantee? - Answer- $0
\.When presented with a choice between a bank's 5-year GIC and an insurance company's
deferred annuity for the same time period, why might this client choose the deferred annuity? -
Answer- An annuity can be creditor protected and bypass probate
\.Sheila works for a company that provides generous group retirement and investment plans
consisting of a DCPP, DPSP, GRRSP and TFSA. In addition to working for the company, she also
owns a small marketing business. Unfortunately her business is not fairing very well and she is
concerned about being unable to repay the debts that her business has. Sheila is asking you if
any of these group retirement and investment plans are not creditor protected. Which of the
following will you tell her is not creditor protected? - Answer- TFSA
\.Which of the following statements is NOT accurate about a GRRSP? - Answer- There are
usually more investment options in a group plan
\.Out of the following list which one list has its segregated funds in the correct order of risk? -
Answer- Canadian Bond Fund, Balanced Fund, Dividend Fund
, \.Which of the following statements is NOT correct? - Answer- Mutual fund values grow by
increases in unit value; segregated fund values grow by the addition of new units
\.Out of the following list, which fund will typically have the most diversification? - Answer-
Fund of Funds
\.Bobby owns a segregated fund contract with a 100% maturity and death benefit guarantee.
Bobby named his son, Jack, as the contract's beneficiary. Bobby passed away today. The
contract was started with an investment of $80,000 and Bobby has withdrawn total of $10,000.
As of today's date the contract value is $60,000. As the beneficiary, how much will Jack receive?
- Answer- $60,000 or the guaranteed amount adjusted for partial withdrawals, whichever is
greater
\.Joe is retiring from his position with the manufacturing company that he's been with for over
the past 35 years. As part of his retirement benefits he has been given a lump sum of cash equal
to the last five years of his salary. Since he is retiring early at age 60, he wants to know what the
best option is to use this money to provide consistent income over the next five years, until his
retirement pension begins. Which of the following choices should you suggest? - Answer- 5-
year immediate term annuity
\.Mr. Domingo purchased a $250,000, 5-year accumulating segregated fund with a 5% interest
rate maturing in 5 years. The value at maturity would be $319,070. At the end of 4 years, the
value had climbed to $303,877 and interest rates had increased to 6%. Mr. Domingo decided
that he wished to close the 5% fund so that he could reinvest in the current 6% fund. What is
the market value adjustment that Mr. Domingo would pay at the end of 4 years to break his
contract and receive his money? - Answer- $2,868.00
\.Out of the following list what is NOT an acceptable identification document when an agent is
required by FINTRAC to obtain an identification document? - Answer- Driver's Insurance
\.Candice, a retired school teacher, receives $4,250 per month from her life annuity. She would
like to know how much she would receive every month in the unlikely event that the insurance
<>QUESTIONS WITH CORRECT
ANSWERS
\.On November 6, 2016 Jenny purchased a $200,000 non-registered segregated fund that
invests in Canadian equities. The segregated fund has a 10 year, 75% maturity guarantee. If this
fund matures on November 6, 2026 with an account value of $160,000, how much will Jenny
receive from the maturity guarantee? - Answer- $0
\.When presented with a choice between a bank's 5-year GIC and an insurance company's
deferred annuity for the same time period, why might this client choose the deferred annuity? -
Answer- An annuity can be creditor protected and bypass probate
\.Sheila works for a company that provides generous group retirement and investment plans
consisting of a DCPP, DPSP, GRRSP and TFSA. In addition to working for the company, she also
owns a small marketing business. Unfortunately her business is not fairing very well and she is
concerned about being unable to repay the debts that her business has. Sheila is asking you if
any of these group retirement and investment plans are not creditor protected. Which of the
following will you tell her is not creditor protected? - Answer- TFSA
\.Which of the following statements is NOT accurate about a GRRSP? - Answer- There are
usually more investment options in a group plan
\.Out of the following list which one list has its segregated funds in the correct order of risk? -
Answer- Canadian Bond Fund, Balanced Fund, Dividend Fund
, \.Which of the following statements is NOT correct? - Answer- Mutual fund values grow by
increases in unit value; segregated fund values grow by the addition of new units
\.Out of the following list, which fund will typically have the most diversification? - Answer-
Fund of Funds
\.Bobby owns a segregated fund contract with a 100% maturity and death benefit guarantee.
Bobby named his son, Jack, as the contract's beneficiary. Bobby passed away today. The
contract was started with an investment of $80,000 and Bobby has withdrawn total of $10,000.
As of today's date the contract value is $60,000. As the beneficiary, how much will Jack receive?
- Answer- $60,000 or the guaranteed amount adjusted for partial withdrawals, whichever is
greater
\.Joe is retiring from his position with the manufacturing company that he's been with for over
the past 35 years. As part of his retirement benefits he has been given a lump sum of cash equal
to the last five years of his salary. Since he is retiring early at age 60, he wants to know what the
best option is to use this money to provide consistent income over the next five years, until his
retirement pension begins. Which of the following choices should you suggest? - Answer- 5-
year immediate term annuity
\.Mr. Domingo purchased a $250,000, 5-year accumulating segregated fund with a 5% interest
rate maturing in 5 years. The value at maturity would be $319,070. At the end of 4 years, the
value had climbed to $303,877 and interest rates had increased to 6%. Mr. Domingo decided
that he wished to close the 5% fund so that he could reinvest in the current 6% fund. What is
the market value adjustment that Mr. Domingo would pay at the end of 4 years to break his
contract and receive his money? - Answer- $2,868.00
\.Out of the following list what is NOT an acceptable identification document when an agent is
required by FINTRAC to obtain an identification document? - Answer- Driver's Insurance
\.Candice, a retired school teacher, receives $4,250 per month from her life annuity. She would
like to know how much she would receive every month in the unlikely event that the insurance
