Reference no: EM132603915

Problem 1: Briefly describe two disadvantages of purchasing a term insurance policy instead of a whole life policy.

Problem 2: You buy 500 common shares of South Company, which is eligible for reduced margin, at $48.00 per share.

a) What is the maximum loan and the amount of margin that you must contribute?

b) What is the revised loan and margin excess or deficiency if the shares fall to $40.00?

Problem 3: Last year you invested CDN $75,000 in an American mutual fund when CDN$1.00 = US$0.90. The fund increased in value by 8% but the exchange rate is now CDN$1.00 = US$0.80. What is your rate of return in Canadian dollars?

Problem 4: Donna earned $60,000 last year in salary and is a member of her company's defined benefit pension plan. Based on this information, calculate her maximum allowable RRSP contribution for this year if the company pension plan provides a maximum annual pension income of 1.75% of her current earnings.

Problem 5: An Ontario resident dies intestate (i.e. without leaving a will) with an estate worth $830,000. Calculate the amount that the surviving spouse and each of the four daughters of the deceased will receive.