Financial Terms and Acronyms Exam Review

Question 1

Financial Institution

Answer 1

Provide a range of financial products and services like checking and saving accounts as well as loans. mortgages, and other investment opportunities.

Question 2

Bank

Answer 2

A larger corporation that is nation wide and provides financial services typically for profit.

Question 3

Credit Union

Answer 3

A smaller financial institution that usually serves a specific region or community. They also provide financial services, but, they are not for-profit.

Question 4

Canada Banks

Answer 4

-Bank of Montreal (BMO)
-Royal Bank of Canada (RBC)
-Scotia Bank
-Canadian Imperial Bank of Commerce (CIBC)
-Toronto-Dominion Bank (TD)

Question 5

Saskatchewan Credit Unions

Answer 5

-Affinity Credit Union
-Conexus Credit Union
-Innovation Credit Union
There are 32 credit unions in Saskatchewan.

Question 6

Checking Account

Answer 6

An everyday bank account that can be used for day-to-day transactions such as bills, direct deposits, purchases, and money transfers.

Question 7

Saving Account

Answer 7

Designed to hold money that you don’t intend on spending immediately.

Question 8

Account Balance

Answer 8

The amount of money that is in your bank at any given moment.

Question 9

Debit Card

Answer 9

Gives you access to your bank accounts and can be used to withdraw funds directly from your accounts.

Question 10

Cheques

Answer 10

A financial tool that tells the bank to pay a specific amount from one bank account to an individual or business.

Question 11

E-Transfer

Answer 11

A funds transfer service between personal or business accounts that allow a person to send money through email or text to another person or business with a bank account in Canada

Question 12

Pre-Authorized-Payment

Answer 12

Are securing payments that come out of your bank account automatically.

Question 13

Direct Deposit

Answer 13

A way to receive payments int your account without having to deposit a cheque.(ex. having your pay cheque go directly to your bank account).

Question 14

Loan

Answer 14

A sum of money that an individual or company borrows from a bank/financial institution with a promise of paying it back within a certain time period.

Question 15

Personal Loan

Answer 15

An unsecured loan meaning they do not require security and could either have a fixed or variable interest rate that is paid back within a certain time period.

Question 16

Auto Loan

Answer 16

When you buy a vehicle, an auto loan lets you borrow the price of the car, minus any down payment or trade in. They generally range from 36 to 73 months (3 to 6 years).

Question 17

Student Loan

Answer 17

Loans available through the provincial and federal government to help students pay for post-secondary schooling. The loan is paid back overtime and usually at lower interest rates.

Question 18

Pay Day Loans

Answer 18

A small loan usually between $50 and $1,000 that must be paid in full by your next pay cheque.

Question 19

Line of Credit

Answer 19

A flexible loan from a bank or financial institutions. Similar to a credit card with a set credit limit, a line of credit is a specific amount of money that you can access as needed and use as you wish.

Question 20

Mortgage

Answer 20

A loan from the bank that is secured for real estate. You take out a mortgage when a house.

Question 21

Down Payment

Answer 21

The amount of money you put towards the purchase of a home. Purchase price minus down payment is the amount you need to borrow

Question 22

Mortgage Term/Amortization Period

Answer 22

Th length of the current mortgage loan agreement associated with your interest-rate. Basically, how long you agree to pay off the mortgage by usually 20 or 25 years.

Question 23

Interest

Answer 23

The amount you pay to borrow money, or the return earned on those investments.

Question 24

Interest Rate

Answer 24

A pre-determined percentage that can change from day to day or is a fixed rate that is influenced by the stock market and state of the world.

Question 25

Compound Interest

Answer 25

Involves owing or earning interest on your interest. Helps sum of money grow faster than if just a single interest were calculated on the principle alone.

Question 26

Budgeting

Answer 26

The process of calculating how much money you must earn or save during a particular period of time, and planning how you will spend it/what you need to spend it on.

Question 27

Stock Market

Answer 27

A trading network that connects investors looking to but and sell stocks and their by products.

Question 28

Insurance

Answer 28

Is a contract between you (or a business) and an insurance company to help you and your loved ones from financial loss due to an unexpected event, like an accident, illness, natural disaster, or the unexpected events.

Question 29

Mutual Fund

Answer 29

It is a trust that collects money from a number of investors who share a common investment objective. Your money is pooled with the money of other investors and invested on your behalf by the fund manager.

Question 30

TFSA (Tax Free Savings Account)

Answer 30

-Allows you to save tax-free to reach any financial goal (home, car, vacation, retirement, etc).

Question 31

RESP (Registered Education Savings Account)

Answer 31

Helps you save for your child’s post-secondary education, also deferring tax while in the plan and offering government grant contributions to help grow your savings faster.

Question 32

RRSP (Registered Retirement Savings Plan)

Answer 32

Is an account registered with the federal government that you can use to save for retirement or other financial goals.

Question 33

APR (Annual Percentage Rates)

Answer 33

Refers to the yearly interest generated by a sum that’s charged to borrowers or paid investors. (the yearly interest rate you’ll pay if you carry a balance on your credit card. )

Question 34

NOA (Notice of Assessment)

Answer 34

Is an annual statement by the Canadian Revenue Agency to taxpayers detailing the amount of income tax they owe, as well as the amounts of their tax refund, tax credit, income tax already paid, and more.

Question 35

OAS (Old Age Security)

Answer 35

A type of pension that you can get over the age of 65.

Question 36

CPP (Canadian Pension Plan)

Answer 36

Monthly taxable benefit that replaces part of your income wen you retire.

Question 37

EI (Employment Insurance)

Answer 37

Provides temporary icon support to unemployed workers while they look for employment or to upgrade their skills.

Question 38

CFP (Certified Financial Planner)

Answer 38

The most widely recognized financial planning designation in Canada standard for financial planners around the world.

Question 39

GIC (Guaranteed Investment Certificate)

Answer 39

Saving account that you can open to ensure that the amount you invest is the amount you get back at the end of your term.

Question 40

CRA (Canada Revenue Agency)

Answer 40

Is the revenue service of Canadian federal government, and most provincial and territorial government. They collect taxes, administers tax, law and policy, and delivers benefit programs and tax credit.

Question 41

MER (Management Expense Ratio)

Answer 41

Is the fee that must be paid by shareholders of a mutual fun or exchange-trade fin (ETF). Goes to the total expenses used to run such funds.

Question 42

FHSA (First Home Savings Account)

Answer 42

Is a registered plan which allows you, if you re a first time home buyer, to save to buy or build a qualifying first home, tax-free.

Question 43

HBP (The Home Buyers Plan)

Answer 43

Is a program, that allows you to withdraw from your registered retirement savings plan to buy or build a qualifying home for yourself or for a specified disabled person.

Question 44

TDSR (Total Dept Service Ratio)

Answer 44

Includes all your outstanding personal dept (mortgage, car loans, credit card, lines of credit, etc) and calculates how much debt that person has at a particular time.