The kids have returned to school. Now it’s your turn.
Grab a pencil and test your financial savvy with Investor Clinic’s back-to-school quiz! It’s guaranteed to be the most thrilling 15 minutes you spend all summer – without the risk of grievous injury posed by certain amusement park rides.
Stumped by something? Drop me an e-mail and I’ll explain some of the answers in a future column.
1 Eligible contributions to the federal government’s new first home savings account (FHSA) are tax deductible, and qualifying withdrawals to purchase a home are also tax-free. What happens if you do not end up buying a home?
a. A jail term of up to one year can be imposed
b. FHSA funds can be transferred tax-free to an RRSP
c. FHSA funds can be transferred tax-free to a TFSA
d. All investment earnings in the FHSA are forfeited
b.
2 The Bank of Canada this week _____ its benchmark interest rate, which is now _____ per cent.
a. raised; 5
b. raised; 5.25
c. left unchanged; 5
d. left unchanged; 5.25
c.
3 Of the Big Six banks, two have dividend yields of more than 6 per cent. They are:
a. National Bank and Bank of Nova Scotia
b. CIBC and Bank of Nova Scotia
c. National Bank and Bank of Montreal
d. CIBC and National Bank
b.
4 Through Sept. 5, the stock with the biggest year-to-date gain on the S&P 500 was _____, with a return of about 232 per cent.
a. Meta Platforms
b. Royal Caribbean Cruises
c. General Electric
d. Nvidia
d.
5 Through Sept. 5, the stock with the biggest year-to-date gain on the S&P/TSX Composite Index was _____, with a return of about 109 per cent.
a. Shopify
b. SNC-Lavalin
c. Boardwalk REIT
d. Celestica
d.
6 While buying a shawarma with bitcoin in March, 2022, Pierre Poilievre endorsed cryptocurrencies as a way “to let Canadians opt out of inflation.” Since then, the price of bitcoin has fallen about 40 per cent in Canadian dollars. Assuming the menu price of the shawarma, in Canadian dollars, has not changed, how much more would Mr. Poilievre have to pay in bitcoin for that same shawarma today?
a. 67 per cent more
b. 58 per cent more
c. 45 per cent more
d. 40 per cent more
a.
7 Based on the 2023 tax year, a 70-year-old collecting Old Age Security pension benefits would start getting OAS clawed back at income of ______, and the benefits would be completely eliminated when income reaches ______. (Numbers are based on preliminary government estimates.)
a. $79,845; $129,757
b. $81,761; $134,626
c. $86,912; $142,428
d. $103,345; $151,068
c.
8 Ken and Barbie recently bought a raccoon-infested teardown in Toronto for $1-million, financed with an $800,000 mortgage at a fixed rate of 5.5 per cent for five years. If they pay $3,500 per month in principal and interest, how long will it take them to pay off the mortgage, assuming they can renew every five years at the same interest rate?
a. 25 years
b. 41 years
c. 66 years
d. They will never pay off the mortgage
d.
9 Leylah 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. do nothing
b. add the amount to her adjusted cost base
c. subtract the amount from her adjusted cost base
d. call 911 to report the error
a.
10 The Toronto Maple Leafs recently signed Auston Matthews to a US$53-million contract extension over four years, making him the highest-paid National Hockey League player on an annual basis. If a 14-ounce filet mignon costs $110 at Harbour 60 restaurant in Toronto, and the Canadian dollar averages 75 U.S. cents, how many steaks can he buy with the money? (Disregard taxes and tips.)
a. 361,363
b. 481,818
c. 642,242
d. None of the above
c.
11 Which of the following companies has not raised its dividend this year?
a. Fortis
b. Canadian Utilities
c. Brookfield Renewable Partners
d. Choice Properties REIT
a.
12 When an exchange-traded fund declares a reinvested – or “phantom” – distribution, the amount per unit should be
a. included with employment income on a T4 slip
b. multiplied by eight and subtracted from 97 to reveal your age
c. added to the adjusted cost base of the investment
d. subtracted from the adjusted cost base of the investment
c.
13 The consumer price index rose _____ per cent year-over-year in July, compared with an increase of _____ per cent in July, 2022, according to Statistics Canada.
a. 5.3; 9.1
b. 3.3; 7.6
c. 6.3; 4.1
d. 5.5; 6.1
b.
14 Which of the following companies has not cut its dividend this year?
a. Intel
b. Corus Entertainment
c. Algonquin Power & Utilities
d. Canadian Western Bank
d.
15 Felix purchased 500 common shares of Enbridge at $55 each in a non-registered account. He later sold 200 shares at $51. His adjusted cost base per share on the remaining 300 shares is
a. $51
b. $55
c. $56.60
d. $57.67
b.
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?
E-mail your questions to jheinzl@globeandmail.com. I’m not able to respond personally to e-mails but I choose certain questions to answer in my column.