Sharpen your pencils, grab a calculator and tell the family to be quiet for the next 15 minutes so you can concentrate.
It’s time for the annual Investor Clinic quiz.
As usual, there are a few gimmes but watch out for the traps. If you’re left scratching your head by any of the answers, drop me an e-mail and I’ll explain them in a future column.
E-mail your questions to jheinzl@globeandmail.com.
1Clarice holds an exchange-traded
fund in her tax-free savings account (TFSA) and noticed that
the ETF distributed a large sum of return of capital (ROC) in
2018. For tax purposes, she is required to:
A. Subtract the ROC from her cost base
B. Add the ROC to her cost base
C. Report the ROC as a capital gain
D. Do nothing
2As of Jan. 1, 2019, the
annual contribution limit for tax-free savings accounts will:
A. Rise to $6,000 from $5,500
B. Rise to $5,750 from $5,500
C. Rise to $5,750 from $5,250
D. Fall to $5,500 from $10,000
Answer: A. Rise to $6,000 from $5,500
3Under enhancements to the
Canada Pension Plan, in 2019 employers and employees will each
pay ____ per cent of pensionable earnings (above $3,500) toward
the CPP, up from 4.95 per cent currently. By 2023, the contribution
rate will rise to ____ per cent.
A. 5.45; 6.95
B. 5.10; 5.95
C. 6.95; 8.95
D. 5.90; 6.95
4As of Dec. 20, the yield
on the five-year Government of Canada bond was about:
A. 2.45 per cent
B. 2.33 per cent
C. 2.17 per cent
D. 1.95 per cent
5Steve bought 100 shares
of Blockchain Marijuana Renewable Energy Corp., which subsequently
plunged 80 per cent when a short-seller’s report alleged the
company is a scam. The last day Steve can sell the shares and
claim a capital loss for 2018 is:
A. Dec. 26
B. Dec. 27
C. Dec. 28
D. Dec. 31
6Through Dec. 20, the best-
and worst-performing stocks on the S&P/TSX Composite Index for
2018 were:
A. Canada Goose; Crescent Point Energy
B. Kirkland Lake Gold; Baytex Energy
C. Nevsun Resources; Maxar Technologies
D. Great Canadian Gaming; Aphria
Answer: C. Nevsun Resources; Maxar Technologies
7Santa Claus is thinking
about retiring and living off the dividends from his toy and
entertainment company stocks. When he sits down to calculate
his income, however, he is shocked to discover that one of his
stocks paid no dividends in 2018. Which stock is it?
A. Mattel
B. Hasbro
C. Walt Disney
D. Activision Blizzard
8Ms. Claus doesn’t trust
Santa’s financial judgment and has built her own dividend-stock
portfolio that includes Royal Bank (RY), Enbridge (ENB), BCE
(BCE) and Fortis (FTS). Rank the stocks in ascending order of
yield:
A. RY, FTS, ENB, BCE
B. FTS, BCE, RY, ENB
C. RY, BCE, ENB, FTS
D. FTS, RY, BCE, ENB
Answer: D. FTS, RY, BCE, ENB
9Which of the following
companies did not raise its dividend in 2018?
A. Rogers Communications
B. BCE
C. Telus
D. Quebecor
Answer: A. Rogers Communications
10Justin wanted some U.S.
exposure for his non-registered account. In January, 2018, with
the Canadian dollar trading at 80 US cents, he bought 100 shares
of Microsoft for US$90 each. He later sold the shares for US$112
each when the Canadian dollar was trading at 75 US cents. His
capital gain, in Canadian dollars, was:
A. $2,933.33
B. $3,683.33
C. $2,346.67
D. $2,750
11Wilma buys 400 shares
of Slate Rock and Gravel Inc. for $20 each. She later sells 100
shares at $25 each. She then buys 200 shares at $27 each. Ignoring
commissions, what is the adjusted cost base per share for her
500 shares?
A. $20.33
B. 21.80
C. 22.80
D. 22.33
12When an ETF or mutual
fund declares a year-end reinvested or “phantom” non-cash distribution,
the amount usually consists of ________ and must be _______ the
investor’s adjusted cost base.
A. return of capital; subtracted from
B. dividends; subtracted from
C. return of capital; added to
D. capital gains; added to
Answer: D. capital gains; added to
13There is no withholding
tax on dividends from U.S. companies if the shares are held in
a:
A. RRSP, RRIF or LIRA
B. TFSA, RRSP or RESP
C. RESP, TFSA or RRSP
D. RESP, TFSA or LIRA
Answer: A. RRSP, RRIF or LIRA
14As of Dec. 20, the S&P/TSX
Composite Index was ________ for 2018 and the S&P 500 was ________.
A. down 3.7 per cent; up 3.3 per cent
B. down 4.8 per cent; up 1.1 per cent
C. down 8.9 per cent; down 3.7 per cent
D. down 12.8 per cent; down 7.7 per cent
Answer: D. down 12.8 per cent; down 7.7 per cent
15After a rough year on
the stock market, Rudolph’s realized capital losses were $28,500
and his realized capital gains were $1,500. For tax purposes,
he can carry back _____ of losses for up to three years or forward
______.
A. $28,500; three years
B. $27,000; indefinitely
C. $27,000; five years
D. $28,500, indefinitely
Answer: B. $27,000; indefinitely
How did you do?
Answer all of the questions to see your result
Not bad!
Nice try, but you missed some.