Segregated Funds and Annuities - Chapter 1:
Investment and Savings (Qs & As)
Save
Terms in this set (89)
Segregated Funds and Investment and savings products marketed to
Annuities Indvidual and group prospects and clients
Compounding Usually refers to earning interest on an investment.
Stated or advertised rate. For example, a savings
Nominal Return
account is advertised with a 2% return.
Calculated as the nominal return on an investment
Real Return
minus the rate of inflation.
Stocks (equities), bonds (fixed income or debt), and
Three main asset classes
cash (money market instruments).
Two other classes that Real estate and Commodities.
are often added
Manages risk. Combining asset classes and
investments within those classes, investing risk will
Diversification
be lower and the expected overall returns may be
higher than if savings were put into one investment.
Diversified Instrument Segregated Funds, Mutual Funds, and Exchange-
Example Traded Funds (ETFs)
The ability to cash in, or sell, an investment quickly
Liquidity
at or near its current market price.
Liquid Investment Savings Account
Example
An investment that does not have characteristics of
Illiquid
liquidity
Illiquid Example Real Estate
, Present Value Formula PV = FV / (1 + i)^n
Future Value Formula FV=PV(1+r)^n
Short term Objective A goal to be met in 3 years or less
Medium Term Objective A goal to be met between 3 to 10 years
Long Term Objective A goal to be met in 10 years or more
Registered Retirement Retirement
Savings Plan (RRSP)
Registered Education Post secondary education costs
Savings Plan (RESP)
Registered Disability Income for a disabled dependant
Savings Plan (RDSP)
Tax-Free Savings Account Tax-free investment growth
(TFSA)
Registered Pension Plan Retirement savings for members of a group
(RPP)
A future event when invested money will be needed
Time Horizon
to meet financial objectives
The time horizon for someone saving for retirement
Time Horizon Example
is when retirement occurs.
MER Management Expense Ratio
SF are primarily sold by life insurance agents and
Where and How to Buy brokers. Some are sold by investment dealers, but
Segregated Funds those dealers act as life insurers; the investment
dealers are only a sales channel
The agent provides this to the investor before or at
the time of purchase. It describes the key benefits of
Information Folder the contract. It also provides info about the fund
itself, such as fees the investor pays and past
performance
Investment and Savings (Qs & As)
Save
Terms in this set (89)
Segregated Funds and Investment and savings products marketed to
Annuities Indvidual and group prospects and clients
Compounding Usually refers to earning interest on an investment.
Stated or advertised rate. For example, a savings
Nominal Return
account is advertised with a 2% return.
Calculated as the nominal return on an investment
Real Return
minus the rate of inflation.
Stocks (equities), bonds (fixed income or debt), and
Three main asset classes
cash (money market instruments).
Two other classes that Real estate and Commodities.
are often added
Manages risk. Combining asset classes and
investments within those classes, investing risk will
Diversification
be lower and the expected overall returns may be
higher than if savings were put into one investment.
Diversified Instrument Segregated Funds, Mutual Funds, and Exchange-
Example Traded Funds (ETFs)
The ability to cash in, or sell, an investment quickly
Liquidity
at or near its current market price.
Liquid Investment Savings Account
Example
An investment that does not have characteristics of
Illiquid
liquidity
Illiquid Example Real Estate
, Present Value Formula PV = FV / (1 + i)^n
Future Value Formula FV=PV(1+r)^n
Short term Objective A goal to be met in 3 years or less
Medium Term Objective A goal to be met between 3 to 10 years
Long Term Objective A goal to be met in 10 years or more
Registered Retirement Retirement
Savings Plan (RRSP)
Registered Education Post secondary education costs
Savings Plan (RESP)
Registered Disability Income for a disabled dependant
Savings Plan (RDSP)
Tax-Free Savings Account Tax-free investment growth
(TFSA)
Registered Pension Plan Retirement savings for members of a group
(RPP)
A future event when invested money will be needed
Time Horizon
to meet financial objectives
The time horizon for someone saving for retirement
Time Horizon Example
is when retirement occurs.
MER Management Expense Ratio
SF are primarily sold by life insurance agents and
Where and How to Buy brokers. Some are sold by investment dealers, but
Segregated Funds those dealers act as life insurers; the investment
dealers are only a sales channel
The agent provides this to the investor before or at
the time of purchase. It describes the key benefits of
Information Folder the contract. It also provides info about the fund
itself, such as fees the investor pays and past
performance
