Wait. Don’t reach for the rum and eggnog yet. You’ll need to stay sharp for the next 15 minutes while you tackle the year-end money and investing quiz.
Get the whole family to join in! Compare scores! Trash talk! What could be more fun than sitting around the Christmas dinner table discussing OAS clawbacks and phantom distributions?
Good luck to all, and send me an e-mail if you’re stumped by any of the questions.
1 Barring a major year-end rally, the S&P/TSX Composite Index is poised to finish 2022 in the red. Assuming it does, how many times in the past 20 years, including 2022, will Canada’s benchmark index have posted an annual loss (excluding dividends)?
a. Four
b. Five
c. Six
d. Seven
b.
2 In 2022, the Bank of Canada raised its key policy interest rate, also known as the target for the overnight rate, ______ times, for a total increase of ______ percentage points. The overnight rate now stands at ______ per cent.
a. Four; 4.75; 5
b. Five; 4.5, 4.75
c. Six; 4.25, 4.5
d. Seven; 4, 4.25
d.
3 Which of the following companies did not raise its dividend in 2022?
a. Algonquin Power & Utilities
b. Northland Power
c. Canadian Utilities
d. Laurentian Bank of Canada
b.
4 As of Jan. 1, the annual contribution limit for tax-free savings accounts will:
a. Remain at $6,500
b. Rise to $6,500 from $6,000
c. Rise to $7,000 from $6,500
d. Remain at $6,000
b.
5 In 2021, Mrs. Claus maxed out her home equity line of credit to invest in Shopify. With the stock down 75 per cent from her purchase price, she wants to sell her shares and claim a tax loss. The last day she can sell her shares to claim a loss for 2022 is:
a. Dec. 26
b. Dec. 27
c. Dec. 28
d. Dec. 29
c.
6 In August, Santa withdrew $50,000 from his tax-free savings account to upgrade his toy workshop. A month later, he lost the remaining $150,000 in his TFSA on a penny mining stock recommended by his friend, Yukon Cornelius. Assuming Santa contributed the maximum to his TFSA each year since 2009 and this was his first withdrawal, as of Dec. 31 he can contribute ______ to his TFSA.
a. Zero
b. $50,000
c. $150,000
d. $200,000
a.
7 As of Dec. 16, the worst-performing stock on the S&P/TSX Composite Index was Dye & Durham Ltd., with a year-to-date decline of about 73 per cent. In what sector does Dye & Durham operate?
a. Printing
b. Software
c. Oil and gas
d. None of the above
b.
8 Which of the following companies is not ranked among the top five in Canada based on market capitalization?
a. Canadian National Railway Co.
b. Enbridge Inc.
c. Toronto-Dominion Bank
d. Suncor Energy Inc.
d.
9 Rudolph’s Reindeer Burgers Ltd. trades at $84 a share and pays a quarterly dividend of 50 cents. If the stock’s price-to-earnings multiple is 21 (based on the current year’s earnings estimates), the company’s dividend payout ratio would be:
a. 25 per cent
b. 50 per cent
c. 75 per cent
d. Impossible to say with the information provided
b.
10 For the 2022 tax year, a 70-year-old collecting Old Age Security pension benefits would start getting her OAS clawed back at income of ______ and her benefits would be completely eliminated when income reaches ______.
a. $47,124; $87,053
b. $61,780; $110,934
c. $72,542; $118,275
d. $81,761; $134,626
d.
11 How the mighty have fallen. Rank the following based on their 2022 returns through Dec. 16, from worst to best. (Hint: the returns are negative 78 per cent, negative 64 per cent, negative 57 per cent and negative 52 per cent.)
a. Bitcoin, Beyond Meat, Tesla, Netflix
b. Tesla, Bitcoin, Netflix, Beyond Meat
c. Netflix, Tesla, Beyond Meat, Bitcoin
d. Beyond Meat, Bitcoin, Tesla, Netflix
d.
12 Hermey the misfit elf bought 500 shares of Dentalcorp Holdings in September at $8 a share. He bought another 1,000 shares in November at $6, before selling 850 shares in December at $8.50. Hermey’s total capital gain on the sale would be about ______ and the adjusted cost base per share of his remaining 650 shares would be ______.
a. $2,125; $4.27
b. $1,275; $4.27
c. $1,555; $6.67
d. $2,125; $6
c.
13 Cindy Lou Who holds an exchange-traded fund in her tax-free savings account (TFSA) and noticed that the ETF distributed a large sum of return of capital (ROC) in 2022. For tax purposes, she is required to:
a. Subtract the ROC from her cost base
b. Add the ROC to her cost base
c. Report the ROC as a capital gain
d. Do nothing
d.
14 As of Dec. 16, the yield on five-year Government of Canada bonds was about:
a. 2.3 per cent
b. 2.9 per cent
c. 3.5 per cent
d. 4.1 per cent
b.
15 In December, many ETFs declare a year-end reinvested or “phantom” distribution. These non-cash amounts typically consist of ______ and in nonregistered accounts should be ______ the investor’s adjusted cost base.
a. return of capital; subtracted from
b. dividends; subtracted from
c. return of capital; added to
d. capital gains; added to
d.
How well did you do?
Answer all of the questions to see your result
What a savvy investor you are! Congratulations and have a prosperous 2023.
Good effort, but you missed a few. Want to try again?
Lots of room for improvement here. Care to give it another try?
Care for one more investing-related quiz? Try Ian McGugan’s year-end review of the events moving the markets, from war in Ukraine to the “moron premium” to the FTX fiasco.
Editor’s note: Assuming the S&P/TSX Composite Index finishes 2022 with a loss, the index will have fallen in five of the 20 years from 2003 to 2022. Incorrect information appeared in an earlier version of this quiz. It has been corrected.