At the Age of 65 Your Grandfather Decides to Retire

question 36

Multiple Choice

At the age of 65 your grandfather decides to retire and use the money he saved in his RRSPs.He decided to get a fixed amount every quarter starting the day he retires.What type of payment is this?

• A)an ordinary annuity
• B)an annuity due
• C)a reverse ordinary annuity
• D)a reverse annuity due

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Definitions:

Money Market Fund

A type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash equivalents and is considered to be relatively low risk.

Portfolio Management

The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.

Growth Stock Fund

A mutual fund that invests primarily in the stocks of companies believed to have above-average potential for growth in revenue and earnings.

Zero-Coupon Bonds

Bonds that do not pay periodic interest payments and are instead issued at a substantial discount to their face value, with the face value being paid at maturity.