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Segregated Funds And Annuities Exam Version 2 And
Practice Exam Newest 2026-2027 Exam Complete 300
Questions And Correct Detailed Answers (Verified
Answers) |Already Graded A+
What does it mean when a bond is selling at a discount? -
ANSWER-It means the market price of the bond falls
below its face value.
What are the main risks of investing in bonds? -
ANSWER-Interest rate risk, reinvestment risk, inflation
risk, credit risk, and liquidity risk.
How does interest rate risk affect bond prices? -
ANSWER-As interest rates rise, bond prices fall, causing
existing bonds' market prices to drop.
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What are the advantages of savings accounts? -
ANSWER-Available cash, benefit of interest, and ease of
opening, depositing, and withdrawing.
What are the disadvantages of savings accounts? -
ANSWER-Interest rates may be lower than inflation rates,
and interest earned is fully taxable.
What is a Guaranteed Investment Certificate (GIC)? -
ANSWER-A term deposit that pays interest on the
invested capital, with guaranteed principal and interest at
maturity.
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What are the advantages of GICs? - ANSWER-
Guaranteed return of principal and interest, variety of
products, easy to buy, and no out-of-pocket fees.
What are the disadvantages of GICs? - ANSWER-Low
return rates, interest taxed as income, and significant
penalties for early withdrawal.
What are the types of GICs? - ANSWER-Fixed interest
GICs, cashable/redeemable GICs, escalating GICs,
variable-interest GICs, market-linked GICs, foreign
currency GICs, and insurance GICs.
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What is a market index? - ANSWER-A tool used to
measure the performance of a group of stocks
representing a specific market segment.
What does the S&P 500 index track? - ANSWER-The
performance of 500 large companies listed on stock
exchanges in the USA.
What does the S&P/TSX Composite Index track? -
ANSWER-The performance of the largest companies
listed on the Toronto Stock Exchange (TSX).
Segregated Funds And Annuities Exam Version 2 And
Practice Exam Newest 2026-2027 Exam Complete 300
Questions And Correct Detailed Answers (Verified
Answers) |Already Graded A+
What does it mean when a bond is selling at a discount? -
ANSWER-It means the market price of the bond falls
below its face value.
What are the main risks of investing in bonds? -
ANSWER-Interest rate risk, reinvestment risk, inflation
risk, credit risk, and liquidity risk.
How does interest rate risk affect bond prices? -
ANSWER-As interest rates rise, bond prices fall, causing
existing bonds' market prices to drop.
,2|Page
What are the advantages of savings accounts? -
ANSWER-Available cash, benefit of interest, and ease of
opening, depositing, and withdrawing.
What are the disadvantages of savings accounts? -
ANSWER-Interest rates may be lower than inflation rates,
and interest earned is fully taxable.
What is a Guaranteed Investment Certificate (GIC)? -
ANSWER-A term deposit that pays interest on the
invested capital, with guaranteed principal and interest at
maturity.
,3|Page
What are the advantages of GICs? - ANSWER-
Guaranteed return of principal and interest, variety of
products, easy to buy, and no out-of-pocket fees.
What are the disadvantages of GICs? - ANSWER-Low
return rates, interest taxed as income, and significant
penalties for early withdrawal.
What are the types of GICs? - ANSWER-Fixed interest
GICs, cashable/redeemable GICs, escalating GICs,
variable-interest GICs, market-linked GICs, foreign
currency GICs, and insurance GICs.
, 4|Page
What is a market index? - ANSWER-A tool used to
measure the performance of a group of stocks
representing a specific market segment.
What does the S&P 500 index track? - ANSWER-The
performance of 500 large companies listed on stock
exchanges in the USA.
What does the S&P/TSX Composite Index track? -
ANSWER-The performance of the largest companies
listed on the Toronto Stock Exchange (TSX).
