Reference no: EM132073599

1. Ali’s gross income is $50,000 a year. His employer withholds 30% to cover income taxes and other mandatory government deductions (e.g. EI). After expenses and other cash outflows, his annual surplus cash flow equals $5,000. He has $1,200 in a chequing account and $2,500 in a high interest savings account. His long-term liabilities equal $45,000 and non-liquid assets total $53,000. He carries a balance on his credit card of $3,300 every month. Identify the correct statements.

Ali’s net worth is $11,700.

Ali’s savings ratio is 14.29%.

Ali’s has $1.12 of current assets for each $1.00 of current liabilities.

Ali’s liquidity ratio is 1.27.

Ali’s debt-to-asset ratio is less than 1.

I, II and III

II, III and V

I, IV and V

II, III and IV

2. Identify the correct statements.

The most important criteria in determining your credit score is your payment history.

The majority of Canadians have a BEACON score less than 750.

Filing for bankruptcy can remain on your credit report for up to 10 years.

Your credit report includes information on your bank balances.

Use of short-term credit card debt over long-term debt has a positive impact on your credit score.

Your written consent is required to permit access to your credit report.