INSTRUCTOR’S SOLUTIONS &
RESOURCE MANUAL
Prepared by
Hardeep S. Gill
NAIT

PERSONAL FINANCE
Second Canadian Edition
Jeff Madura
Florida Atlantic University

Hardeep S. Gill
NAIT

Toronto
Copyright © 2012 Pearson Canada Inc., Toronto, Ontario. All rights reserved. This work is protected by Canadian
copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student
learning. Dissemination or sale of any part of this work (including on the Internet) will destroy the integrity of the
work and is not permitted. The copyright holder grants permission to instructors who have adopted Madura, Gill,
Personal Finance, Second Canadian Edition to post this material online only if the use of the website is restricted by
access codes to students in the instructor’s class that is using the textbook and provided the reproduced material bears
this copyright notice.

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Contents
Overview

................................................................................................................................................. iii


Personal Loans........................................................................................................................58

Chapter 8

Purchasing and Financing a Home ........................................................................................66

Chapter 9

Auto and Homeowner’s Insurance ........................................................................................78

Chapter 10

Health and Life Insurance ......................................................................................................86

Chapter 11

Investing Fundamentals ...................................................................................................... 100

Chapter 12

Investing in Stocks .............................................................................................................. 111

Chapter 13

Investing in Bonds............................................................................................................... 123

Chapter 14

Investing in Mutual Funds .................................................................................................. 134


personal financial planning.
Many thanks go to those at Pearson Canada for their help in preparing and technically checking this
manual.

Copyright © 2012 Pearson Canada Inc.

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Introduction
The Instructor’s Solutions and Resource Manual for Personal Finance, Second Canadian Edition, by Jeff
Madura and Hardeep Gill is designed to meet the far-ranging needs of personal finance instructors. In most
schools, a personal finance course is not a required course and therefore will often attract students from
many different backgrounds and colleges who will be taking the course as an elective. This subsequently
creates a challenging teaching environment. Some students may feel overwhelmed by the material, while
others may find it too basic. Having access to a variety of resources, methods, and materials may alleviate
some of these challenges. This introduction describes the many resources this instructor’s solutions and
resource manual contains. We hope it will ease the burden of busy instructors and help them to enhance
their students’ ability to retain the material.

 An Overview of Chapter-by-Chapter Resources
This manual provides instructors with much more than the solutions to the end-of-the-chapter exercises.
Each chapter begins with an introduction to the chapter. This introduction is intended to aid the instructor
by offering a brief summary of the topics that will be covered in that chapter. In this way, each instructor
should be better able to determine if only a portion of the topics will be sufficient or if the coverage will be
comprehensive.
In-depth Teaching Suggestions for each chapter include both important topics to be discussed in an
individual chapter and additional assignments that may be helpful to aid the students in learning the

Stockbrokers: Various types of information on a variety of investment issues and types.
Internet: There are many Internet assignments in the book and even more suggestions in the Instructor’s
Solutions and Resource Manual. The Internet is a source of information that will be available to the
students even after the class is finished. The information is generally more up to date than any other source
and everyone today has at least limited access to a computer.

 Teaching Personal Finance Online
The unique needs of online courses merit separate mention regarding teaching resources and suggestions.
Teaching suggestions geared to the needs of online courses are included in the materials corresponding to
each chapter. What follows are general suggestions to aid the many instructors who are restructuring their
individual courses so they can be taught an online course.
1. An online course should reflect the same rigour and content as the classroom course demands. This
ensures that students are exposed to the same content and learning experiences, which will help ensure
that the course both meets the prerequisite criteria for upper-level courses and/or transfer. Using a
common syllabus and textbook will diminish perceptions that the courses are different.
2. Teams can also be used in an online course. Since many students take courses online because of
scheduling conflicts with work, etc., it would be beneficial before assigning teams to survey the
students as to the times they are available to work online. This would then do some self-selecting for
the teams.
The cases in the text are useful for team solving. Worksheets with discussion questions are also a good
way to use teams. If the students are self-paced, it is more difficult to implement teams. Thus, it is
important to know the target audience before implementation.
3. Communication is critical in any course and even more so in an online course. The address book is a
valuable asset for an online course. The instructor can send messages to everyone at the same time, or
individually. Information can be disseminated quickly and efficiently. For example, answers to
quizzes and exams can be distributed electronically immediately after the deadline assigned for each.
4. Chat Rooms: This is another way to communicate with students. This can serve as office hours.
Students know when the instructor will be online and can participate or not.
5. Just as instructors teach differently in the classroom, so also will this happen in an online course.
Knowing the audience is critical to the success of any class. Today, even in a conventional classroom,

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