Forward Thinking Dec 2008
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Effective marginal tax at 80%?
It can happen!
Q1
An effective marginal tax rate (EMTR) is best described as:
a) The same as the headline marginal tax rate;
b) The amount of tax paid net of LITO rebate, excluding Medicare levy;
c) The difference between an extra gross $1 earnings and the amount of take home benefit attributable to that $1 of gross earnings
d) Total amount of tax payable by an individual or couple who have dependent children
Q2
For those under age 55, the low income tax offset (LITO) can have the effect that no tax is payable until income reaches what level?
a) $10,000
b) $14,000
c) $17,309
d) $20,363
Q3
Considering the case study of John & Vicki, based on their actual annual family income (AAFI), what impact does Family Tax Benefit A have on Vicki’s EMTR?
a) Increases her EMTR by 15% for range of $42,559 - $82,885
b) Decreases her EMTR by 20% for range of $42,559 - $82,885
c) Increases her EMTR by 30% for range of $101,908 - $122,263
d) Decreases her EMTR by 30% for range of $101,908 - $122,263
Q4
What factors need to be considered when a family (with children) is considering the return to work of a non-income earner versus the primary income earner increasing their income (through a pay increase or second job)?
a) Amount of family tax benefit they will receive
b) Gross child care costs (after child care rebates if applicable)
c) Net take home income
d) All of the above
Q5
Which strategy was considered in the article as a way to potentially decrease the impact of EMTRs?
a) Make a non-concessional contribution into superannuation
b) Head off an extended overseas holiday
c) Implement a salary sacrifice arrangement
d) Have more children to increase family assistance benefits
Cash
Q6
According to MPW Research, a balanced investor holds what percentage in cash?
a) 30%
b) 5%
c) 25%
d) 15%
Q7
What did cash perform over the past 12 months?
a) 5%
b) 7%
c) 8%
d) 3%
Q8
Creating a single cash hub helps put you in control of your client’s cash investments. True or false?
a) True
b) False
Economic
Q9
Fill the gaps in this sentence: Following x years of robust expansion, where global GDP rose at an average of x per cent a year
a) Following 6 years of robust expansion, where global GDP rose at an average of 5 per cent a year
b) Following 4 years of robust expansion, where global GDP rose at an average of 5 per cent a year
c) Following 4 years of robust expansion, where global GDP rose at an average of 6 per cent a year
d) Following 5 years of robust expansion, where global GDP rose at an average of 5 per cent a year
Q10
What will the global economic output remain for the majority of 2009?
a) Steady
b) Positive
c) Weak
d) Stagnant
Q11
What is the official cash rate expected to fall to?
a) 5.5%
b) 3.5%
c) 4.5%
d) 4%
Insurance
Q12
Less than half of women aged 18 and over in Australia report to have seen a financial adviser.
a) True
b) False
Q13
An increase in stress levels causes the adrenal glands to produce cortisol and adrenalin.
a) True
b) False
Q14
Two thirds of all heart failure sufferers are male.
a) True
b) False
Q15
The female death rate from lung cancer in Australia and worldwide is increasing.
a) True
b) False
Q16
Women should never have more than two units of alcohol per day.
a) True
b) False
Practice management
Q17
What is the first step to understanding your cost to income ratio?
a) Work out the average hourly raw cost of a practice
b) Work out how much income is generated per hour
c) Look at your marketing plan
Q18
What is the optimum cost to income ratio?
a) 53%
b) 50%
c) 60 to 65%
d) 80%
Q19
Growth in the insurance sector is around what per cent per annum?
a) 12%
b) 13%
c) 9%
d) 5%
Curing shoebox syndrome - how to explain the benefits of using a wrap platform to your clients
Q20
Are the below all benefits of using an administration platform?
Consolidated performance and tax reporting
Access to an extensive range of managed investments
Custodial structure removes paperwork administration
Online access to their portfolio
One call centre for all of their investments
a) true
b) false
Q21
How many educational brochures does Macquarie's Investment Essential's toolkit contain?
a) 6
b) 1
c) 3
d) 2
Gearing in today’s market
Q22
Margin lending is not an investment strategy on its own; rather, it is a way to fund an investment. True or false?
a) true
b) false
Q23
What time horizon should investors consider when using gearing as an investment strategy?
a) 3 years
b) 5 years
c) 10 years
d) 12 years
Q24
With capital protected investing, the lender loans what per cent of the total value of funds?
a) 100%
b) 80%
c) 120%
d) 50%