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Canada Savings Bond Wiki2Web Clarity Challenge

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Study Guide: Canadian Savings Bonds: History and Features

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Canadian Savings Bonds: History and Features Study Guide

Historical Context: War Bonds

The precursor to the Canada Savings Bond program was the World War II War Bonds initiative.

Answer: False

Explanation: The precursor to the Canada Savings Bond program was the Victory Bonds initiative from World War I, not World War II War Bonds.

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Victory Bonds were first sold in 1915 to finance Canada's involvement in World War I.

Answer: False

Explanation: Victory Bonds were first sold in 1917, not 1915, to finance Canada's involvement in World War I.

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The Victory Loan Dominion Publicity Committee used celebrity endorsements to promote Victory Bonds.

Answer: True

Explanation: The Victory Loan Dominion Publicity Committee utilized celebrity endorsements as part of their strategy to promote Victory Bonds.

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Individuals who bought a large quantity of Victory Bonds received a Victory Loan Honour Medal.

Answer: False

Explanation: Individuals who demonstrated strong support by purchasing numerous Victory Bonds were presented with a Victory Loan Honour Flag, not a medal.

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The 1917 poster mentioned in the source was titled '4 Reasons for Buying Victory Bonds'.

Answer: True

Explanation: The source identifies a 1917 Canadian Government creation as a poster titled '4 Reasons for Buying Victory Bonds'.

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The 1917 Victory Bonds poster depicted leaders from the Allied Powers.

Answer: False

Explanation: The 1917 Victory Bonds poster depicted leaders from the Central Powers, not the Allied Powers.

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The Victory Bonds were primarily used to fund infrastructure projects after World War I.

Answer: False

Explanation: Victory Bonds were utilized to fund Canada's involvement in World War I, not infrastructure projects after the war.

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The Victory Loan Dominion Publicity Committee organized parades as part of their promotional efforts for Victory Bonds.

Answer: True

Explanation: The Victory Loan Dominion Publicity Committee organized parades as a promotional strategy for Victory Bonds.

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Which initiative served as the precursor to the Canada Savings Bond program?

Answer: The Victory Bonds initiative from World War I.

Explanation: The Canada Savings Bond program's precursor was the Victory Bonds initiative, which originated during World War I.

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How did the government encourage investment in Victory Bonds during World War I?

Answer: By utilizing artwork, parades, and celebrity endorsements.

Explanation: The government employed promotional strategies such as artwork, parades, and celebrity endorsements to encourage investment in Victory Bonds during World War I.

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What was the purpose of the Victory Loan Dominion Publicity Committee?

Answer: To advertise and promote the purchase of Victory Bonds.

Explanation: The Victory Loan Dominion Publicity Committee was established to advertise and promote the purchase of Victory Bonds.

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What did the 1917 poster, titled '4 Reasons for Buying Victory Bonds,' depict regarding political figures?

Answer: Leaders of the Central Powers.

Explanation: The 1917 poster for Victory Bonds depicted leaders from the Central Powers.

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Which of the following is NOT mentioned as a method used to promote Victory Bonds?

Answer: Offering lottery incentives.

Explanation: Promotional methods mentioned for Victory Bonds include artwork, parades, and celebrity endorsements; lottery incentives are not cited.

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The Victory Bonds program was revived and utilized again during which major historical conflict?

Answer: World War II

Explanation: The Victory Bonds program, initially associated with World War I, was revived and utilized again during World War II.

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Which of the following was a method used by the Victory Loan Dominion Publicity Committee?

Answer: Organizing parades.

Explanation: The Victory Loan Dominion Publicity Committee utilized methods such as organizing parades to promote Victory Bonds.

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Canada Savings Bonds (CSBs): Establishment and Purpose

The Canada Savings Bond program was active from 1945 until its discontinuation in 2017.

Answer: True

Explanation: The Canada Savings Bond program commenced in 1945 and concluded with its discontinuation in 2017.

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Canada Savings Bonds were typically available for purchase between early October and December 1st each year.

Answer: True

Explanation: Canada Savings Bonds were typically offered for purchase annually within the period from early October to December 1st.

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What was the primary function of the Canada Savings Bond (CSB)?

Answer: To provide Canadians with an accessible savings tool offering competitive, guaranteed interest rates.

Explanation: The primary function of the Canada Savings Bond was to offer Canadians an accessible savings tool that provided competitive and guaranteed interest rates.

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For how long was the Canada Savings Bond program available to the public?

Answer: From 1945 until 2017.

Explanation: The Canada Savings Bond program was available to the public from 1945 until its discontinuation in 2017.

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What was the French name for the Canada Savings Bond?

Answer: Obligations d’épargne du Canada

Explanation: The French name for the Canada Savings Bond is 'Obligations d’épargne du Canada'.

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CSB Product Variations and Features

Canada Savings Bonds (CSBs) were primarily issued by the Royal Canadian Mint.

Answer: False

Explanation: Canada Savings Bonds were issued by the Bank of Canada, not the Royal Canadian Mint.

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Canada Savings Bonds were designed to offer investors a variable interest rate that was guaranteed for the entire duration of the bond's term.

Answer: False

Explanation: Canada Savings Bonds offered a variable interest rate that was guaranteed only for the initial one-year period, not the entire bond term.

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Canada Savings Bonds were available in three main formats: regular interest, compounding interest, and premium.

Answer: False

Explanation: Canada Savings Bonds were primarily available in two formats: regular interest and compounding interest. Canada Premium Bonds were a distinct, separate product.

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Regular interest Canada Savings Bonds paid out accrued interest directly to the bondholder periodically.

Answer: True

Explanation: Regular interest Canada Savings Bonds functioned by paying the accrued interest directly to the bondholder, providing a periodic income stream.

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Compounding interest Canada Savings Bonds reinvested the earned interest into the principal amount.

Answer: True

Explanation: Compounding interest Canada Savings Bonds added the earned interest back to the principal, thereby increasing the base for future interest calculations.

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The interest rate on Canada Savings Bonds was guaranteed for the entire 10-year term.

Answer: False

Explanation: The interest rate on Canada Savings Bonds was guaranteed for an initial period of one year, after which it could fluctuate based on market conditions.

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Canada Savings Bonds offered limited redemption flexibility, restricting withdrawals to specific annual periods.

Answer: False

Explanation: Canada Savings Bonds provided significant redemption flexibility, being redeemable at any time without penalty before maturity.

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Canada Premium Bonds were introduced in 1997 and offered a higher, fixed interest rate for the first five years.

Answer: False

Explanation: Canada Premium Bonds were introduced in 1997 and offered a higher, fixed interest rate for the first three years, not five.

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After their initial fixed period, Canada Premium Bonds had interest rates that fluctuated with market conditions.

Answer: True

Explanation: Following their initial fixed-rate period, Canada Premium Bonds featured interest rates that adjusted in accordance with prevailing market conditions.

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Canada Premium Bonds could be redeemed at any time, similar to regular Canada Savings Bonds.

Answer: False

Explanation: Canada Premium Bonds had restricted redemption conditions, allowing redemption only on the anniversary of issue or within the subsequent 30-day period, unlike the anytime redemption of regular CSBs.

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Canada Investment Bonds could be redeemed before their maturity date.

Answer: False

Explanation: Canada Investment Bonds were structured such that they could not be redeemed until their maturity date.

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Canada Investment Bonds typically had a maturity term of ten years.

Answer: False

Explanation: Canada Investment Bonds typically had a shorter maturity term of three years.

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Canada Investment Bonds were exclusively sold through investment brokers.

Answer: True

Explanation: Canada Investment Bonds were exclusively distributed through investment brokers, distinguishing their sales channel from other savings bond types.

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Canada Investment Bonds were offered to the public for an extended period from 2003 to 2007.

Answer: False

Explanation: Canada Investment Bonds were offered to the public for a limited period, from October 1, 2003, to April 1, 2004.

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The Ontario Savings Bond is mentioned as a similar program to the Canada Savings Bond.

Answer: True

Explanation: The Ontario Savings Bond is cited as an example of a provincial savings bond program similar in concept to the Canada Savings Bond.

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The primary difference between regular and compounding Canada Savings Bonds was the redemption flexibility.

Answer: False

Explanation: The primary difference between regular and compounding Canada Savings Bonds was the method of interest payout: regular bonds paid interest directly, while compounding bonds reinvested interest into the principal.

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Canada Premium Bonds offered a higher interest rate than regular CSBs only after the initial fixed period.

Answer: False

Explanation: Canada Premium Bonds offered a higher, fixed interest rate for their initial three-year period, after which the rates fluctuated with market conditions.

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Canada Investment Bonds were characterized by their long-term nature and redeemability at any time.

Answer: False

Explanation: Canada Investment Bonds were characterized by their short-term nature (3-year maturity) and non-redeemability until maturity.

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Which of the following describes the function of compounding interest Canada Savings Bonds?

Answer: Interest was added to the principal, increasing the base for future interest calculations.

Explanation: Compounding interest Canada Savings Bonds functioned by adding the earned interest back to the principal, thereby increasing the base for future interest calculations.

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What was a key difference in redemption flexibility between Canada Savings Bonds and Canada Premium Bonds?

Answer: CSBs were redeemable anytime; CPBs only on specific anniversaries.

Explanation: Canada Savings Bonds offered anytime redemption flexibility, whereas Canada Premium Bonds could only be redeemed on specific anniversaries of their issue or within the following 30 days.

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Canada Investment Bonds were distinct from other CSB types primarily because they:

Answer: Could not be redeemed until maturity and had a 3-year term.

Explanation: Canada Investment Bonds were distinct due to their inability to be redeemed until maturity and their shorter, three-year term.

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Through which channel were Canada Investment Bonds exclusively distributed?

Answer: Exclusively through investment brokers.

Explanation: Canada Investment Bonds were exclusively distributed through investment brokers.

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How did the interest rate on regular interest Canada Savings Bonds function after the initial one-year guarantee?

Answer: It fluctuated based on market conditions.

Explanation: After the initial one-year guarantee, the interest rate on regular interest Canada Savings Bonds fluctuated based on market conditions.

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What was the main difference between regular and compounding Canada Savings Bonds regarding interest payout?

Answer: Regular bonds paid interest directly to the holder; compounding bonds reinvested it into the principal.

Explanation: The main difference was that regular interest bonds paid interest directly to the holder, while compounding interest bonds reinvested the interest into the principal.

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Which statement accurately describes Canada Premium Bonds introduced in 1997?

Answer: They offered a higher fixed rate for the first three years, then fluctuated.

Explanation: Canada Premium Bonds, introduced in 1997, offered a higher fixed interest rate for the first three years, after which the rates fluctuated with market conditions.

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What was the approximate maturity period for Canada Savings Bonds?

Answer: 10 years

Explanation: Canada Savings Bonds typically had a maturity period of approximately 10 years.

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What was the primary characteristic of Canada Investment Bonds regarding their redemption?

Answer: They could not be redeemed until their maturity date.

Explanation: Canada Investment Bonds could not be redeemed until their maturity date, distinguishing them from other savings bond types.

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How did Canada Savings Bonds differ from Canada Investment Bonds in terms of redemption?

Answer: CSBs were redeemable anytime; CIBs were not redeemable until maturity.

Explanation: Canada Savings Bonds could be redeemed at any time, whereas Canada Investment Bonds could not be redeemed until their maturity date.

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What was the initial guaranteed interest rate period for Canada Savings Bonds?

Answer: One year

Explanation: The initial guaranteed interest rate period for Canada Savings Bonds was one year.

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Program Evolution and Financial Analysis

Consultants recommended discontinuing the Canada Savings Bond program in 2004, estimating significant cost savings.

Answer: True

Explanation: In 2004, consultants advised the Department of Finance to discontinue the Canada Savings Bond program, projecting substantial cost savings.

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The Department of Finance immediately accepted the 2004 recommendation to end the Canada Savings Bond program.

Answer: False

Explanation: The Department of Finance, under the then-finance minister Ralph Goodale, rejected the 2004 recommendation to end the program, opting instead for modifications.

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The value of Canada Savings Bonds issued between 1987 and 2015 saw a substantial increase.

Answer: False

Explanation: The value of issued Canada Savings Bonds experienced a substantial decline, decreasing from $55 billion in 1987 to approximately $6 billion by 2015.

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A 2015 KPMG study recommended the cancellation of the Canada Savings Bond program.

Answer: True

Explanation: A government-commissioned study by KPMG in June 2015 recommended the cancellation of the Canada Savings Bond program.

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A 2015 KPMG study recommended the cancellation of the Canada Savings Bond program.

Answer: True

Explanation: A government-commissioned study by KPMG in June 2015 recommended the cancellation of the Canada Savings Bond program.

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Ralph Goodale, as finance minister, supported the 2004 recommendation to scrap the CSB program.

Answer: False

Explanation: Ralph Goodale, the finance minister at the time, rejected the 2004 recommendation to scrap the Canada Savings Bond program.

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The value of issued Canada Savings Bonds dropped significantly from $55 billion in 1987 to approximately $6 billion in 2015.

Answer: True

Explanation: The value of issued Canada Savings Bonds experienced a significant decline, decreasing from $55 billion in 1987 to approximately $6 billion by 2015.

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What was the estimated cost savings projected if the Canada Savings Bond program was scrapped based on the 2004 consultants' advice?

Answer: Approximately $650 million over 9 years.

Explanation: Consultants estimated that discontinuing the Canada Savings Bond program in 2004 could yield overall cost savings of approximately $650 million over a nine-year period.

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Who rejected the 2004 recommendation to end the Canada Savings Bond program, opting instead for program modifications?

Answer: The Minister of Finance, Ralph Goodale.

Explanation: The then-finance minister, Ralph Goodale, rejected the 2004 recommendation to end the Canada Savings Bond program, opting instead for modifications to enhance its competitiveness.

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What significant trend was observed in the value of issued Canada Savings Bonds between 1987 and 2015?

Answer: A substantial decline from $55 billion to just over $6 billion.

Explanation: The value of issued Canada Savings Bonds experienced a substantial decline between 1987 and 2015, decreasing from $55 billion to just over $6 billion.

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According to a June 2015 study, what was the estimated annual cost of the Canada Savings Bond program?

Answer: $58 million

Explanation: A government-commissioned study by KPMG in June 2015 estimated the annual cost of the Canada Savings Bond program to be $58 million.

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What was the estimated overall cost savings over nine years if the CSB program was scrapped, according to 2004 consultants?

Answer: $650 million

Explanation: The 2004 consultants' report estimated that scrapping the CSB program would result in savings of approximately $650 million over nine years.

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What was the approximate value of issued Canada Savings Bonds in 2015?

Answer: $6 billion

Explanation: In 2015, the approximate value of issued Canada Savings Bonds was $6 billion.

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The 2004 consultants' report estimated that scrapping the CSB program would result in savings of approximately how much over nine years?

Answer: $650 million

Explanation: The 2004 consultants' report estimated that scrapping the CSB program would result in savings of approximately $650 million over nine years.

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What was the approximate value of issued Canada Savings Bonds in 1987?

Answer: $55 billion

Explanation: The approximate value of issued Canada Savings Bonds in 1987 was $55 billion.

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Discontinuation and Legacy

The Liberal government decided to end the sale of new Canada Savings Bonds in the federal budget announced on March 22, 2017.

Answer: True

Explanation: The Liberal government announced its decision to end the sale of new Canada Savings Bonds in the federal budget of March 22, 2017.

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Existing Canada Savings Bonds continue to be valid and honored even after the program's discontinuation in 2017.

Answer: True

Explanation: Although the sale of new Canada Savings Bonds ceased in 2017, existing bonds remain valid and will be honored until they are redeemed.

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The discontinuation of new Canada Savings Bonds was announced in the federal budget of March 22, 2017.

Answer: True

Explanation: The federal budget of March 22, 2017, contained the announcement regarding the discontinuation of new Canada Savings Bonds.

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When did the Liberal government officially announce the discontinuation of new Canada Savings Bonds?

Answer: In the federal budget of March 22, 2017.

Explanation: The Liberal government officially announced the discontinuation of new Canada Savings Bonds in the federal budget presented on March 22, 2017.

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What was the stated reason for discontinuing the sale of new Canada Savings Bonds in 2017?

Answer: The decision was announced as part of the federal budget that year.

Explanation: The discontinuation of new Canada Savings Bonds in 2017 was announced as part of the federal budget presented that year.

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