RBC RBC - Online Assessment Financial Literacy and Banking Knowledge Questions and Answers

Question 1

What does the term 'prime rate' refer to in the context of Canadian banking?

Accepted Answer

The benchmark interest rate set by the Bank of Canada used by banks to price loans

Answer

The highest interest rate charged on all loans

Answer

The interest rate offered exclusively to RBC Premier clients

Answer

The penalty rate applied to overdue credit card balances

Question 2

Which of the following best describes a Registered Retirement Savings Plan (RRSP)?

Accepted Answer

A tax-sheltered savings account where contributions reduce taxable income

Answer

A government pension plan funded by payroll deductions

Answer

A guaranteed investment certificate offered only to seniors

Answer

A chequing account with a higher interest rate for retirees

Question 3

A client wants low risk and guaranteed returns over 1 year. Which product is MOST suitable?

Accepted Answer

Guaranteed Investment Certificate (GIC)

Answer

Common equity stocks

Answer

High-yield bond mutual fund

Answer

Foreign exchange forward contract

Question 4

What is the primary purpose of the Canada Deposit Insurance Corporation (CDIC)?

Accepted Answer

To insure eligible deposits at member institutions up to a set limit per depositor

Answer

To regulate mortgage interest rates across Canadian banks

Answer

To provide investment advice to retail banking clients

Answer

To approve all new banking products before they launch

Question 5

Which ratio is most commonly used to assess a borrower's ability to service debt relative to income?

Accepted Answer

Debt service coverage ratio (DSCR)

Answer

Price-to-earnings ratio

Answer

Current ratio

Answer

Return on equity (ROE)

Question 6

What distinguishes a TFSA (Tax-Free Savings Account) from an RRSP?

Accepted Answer

TFSA withdrawals are tax-free; RRSP contributions reduce taxable income

Answer

TFSA contributions reduce taxable income; RRSP withdrawals are tax-free

Answer

Both accounts have identical tax treatment at withdrawal

Answer

TFSA is only available to clients over age 65