financial management

Question 1

RESP rule for 16 and 17 year olds for CESG

Answer 1

must make contribution of $2000 before turning 16 or must have made at least $100/year contributions in any 4 years before age 16

Question 2

max EAP withdrawal in first 13 consecutive weeks?

Answer 2

$5000

after first 13 weeks, there’s no limit on the EAP withdrawal

Question 3

strategies for RESP accounts

Answer 3

• contribute early to max out growth
• contribute max to get max cesg
• use family plans
• set up joint subscribers if possible
• spread AIP over 2 years if possible for max RSP contribution
• if you have $50K, contribute $2500 per year and leave rest in in trust account

Question 4

IRD

Answer 4

difference in rate x outstanding mortgage x # of yrs remaining on term

Question 5

FTHB tax credit

Answer 5

$750 max (15% of $5000

Question 6

Bias

Answer 6

systematic errors in financial judgement or imperfections in the perception of economic reality

Question 7

Heuristics

Answer 7

simple, efficient rules of thumb

Question 8

Cognitive bias

Answer 8

an error in cognition that arises in a person’s line of reasoning when making a decision is flawed by personal beliefs
i.e. over confidence, loss aversion, self serving bias, herd mentality, framing

Question 9

emotional bias

Answer 9

illogical reasoning