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Chapter 18

Multiple-Choice Questionsand

Answers

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1. Which of the following is not a source of retirement income?

(a) Reverse mortgage on the home(b) Locked-in RRSP(c) OAS (Old Age Security)(d) Employer pension(e) None of the above

The answer is (e).

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2. To meet the demand for different patterns of retirement income and risk management, the financial markets have developed many types of annuities. Which of the following has not been developed?

(a) Fully indexed (to some inflation measure) annuity

(b) Straight life annuity(c) Term-certain annuity(d) Life with guaranteed term annuity(e) None of the above

The answer is (a).

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3. Which of the following will not affect the optimal asset allocation of investment funds for retirees?

(a) Gender of the retiree

(b) Initial wealth

(c) Annual consumption

(d) Rate of return on investment

(e) All of the above affect optimal asset allocation

The answer is (e).

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4. Which of the following is not a way to transfer assets to your beneficiaries?

(a) Selling of properties to your beneficiary at fair market value

(b) Gifts to the beneficiaries during your life time(c) Assets transferred directly through a bequest in a

will(d) Assets transferred according to provincial law if

you die intestate(e) Assets transferred through “inter vivos”

The answer is (a).

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5. If one dies intestate, without any surviving spouse or children, the estate will go ________.

(a) all to the brothers and sisters(b) all to the next of kin(c) all to the government(d) half to the parents and half to the next of

kin(e) all to the charitable organizations approved

by the government

The answer is (b).