Personal Finance final

A government security issued in minimum units of $1,000 with a 10 year to 30 year maturity is called a ___. D treasury bond
A stock that follows the business cycle of advances and declines in the economy is called a stock. B. cyclical
For most mutual funds, the net asset value is calculated C. at the close of each trading day
A mutual fund that invests in the common stocks of companies in the same industry is called a ____________ fund. C. sector
An emergency fund should be deposited in a A. savings account at the highest available interest rate
A request that a stock be bought or sold at the current market price is called a _________ order. A: market
A bond that can be exchanged, at the owner’s option, for a specified number of shares of the corporations stock is called a ____________ bond. D: convertible
Generally, interest on corporate bonds is paid every ________. 6 months
A mutual fund in which investors pay a commission every time they purchase shares is called a ________ fund. C. Load
When the board of directors approves a two for one stock split, the price for each share of stock… . A: decreases in value
The legal conditions for a corporate bond are described in the D: bond indenture
The management fee for most mutual funds ranges between _________ percent. A: 0.25 to 2
A 1-5 percent fee that investors pay when they withdraw their investment from a mutual fund is called a _________. Contingent deferred sales loan
A call feature… C: allows the corporation to buy outstanding bonds from current bondholders before the maturity date
When a bondholder loses money because interest rates in the economy increase it is an example of ________ risk. B: interest rate
Which of the following investments offers the greatest growth potential? B: common stock
A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified process called a _________ order. C: stop
A request that a stock be bought or sold at a specified price is called a ________ order. B: limit
Which of the following statements is true… a. Most mutual funds are managed fundsb. The role of a fund manager is not important because the investment company is always changing managersc. If a fund has performed well under present manager over a 5-year, 10-year, or longer period it is time to sell the fund
If the board of directors approves a two for one stock split an investor who owns 150 shares before the split owns ______ shares after the split D: 300
A market for existing financial securities that are currently traded between investors is called the _________ market. D: secondary
An order to buy or sell a security that lets the broker decide when to execute the transaction and at what price is called a ________ order E: discretionary
A mutual fund that invest in common stocks and bonds with the primary objectives of conserving capital, providing income, and long term growth is called a __________ fund A: balanced
A mutual fund in which no sales charge is paid by the individual investor is called a __________ fund. D: no-load
A mutual fund that invests in common stocks of rapidly growing corporations with higher than average revenue and earnings growth is called a ______ fund. B: growth
A government security issued in $1000 units with maturities of more than one year by no more than ten years is called a _________. C: treasury note
When one investment company manages a group of mutual funds, it’s called a ________. A: family of funds
An example of ___________ risk occurs when an investment does not keep up with prices that are increasing the overall economy. inflation
If overall interest rates in the economy rise, a corporate bond with a fixed interest rates will generally … B: decrease in value
When an investor purchases shares in a load fund, the average sales charge is usually __________ percent. Between 3-5
A decrease in value of stocks, bonds or other investments may cause investors to experience ________ risk. Market.
The value of MF’s portfolio minus the mutual funds liabilities divided by the number of shares outstanding is called the _________ net asset value
When a bond is selling for less than its face value, it is said to be selling at a A: discount
A market in which an investor purchases financial securities (via an investment bank or other representative from the issuer of those securities) is called the _______ market. E: primary
An individual can reduce the amount of risk associated with an investment program by using… B: asset allocation
According to Ibbotson Associates, which of the following investments is projected to earn the largest return between now and the year 2025? Stocks
Index funds invest in… E securities contained in an index like the S&P 500
The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in an…. D: prospectus
A very safe investment that generally attracts conservative investors is called a ___________ stock. E: blue-chip
A fee that some investment companies charge for marketing and distributing a mutual fund is called a __________ B: 12b-1 fee
A government security issued in minimum units of $1000 with maturities that are one year or less is called a _______ B: treasury bill
Income dividends and capital gain distributions are: s subject to federal taxation.
A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called a _____. A: dollar cost averaging
A mutual fund in which shares are issued only when the fund is organized is called a ______ fund. B closed end
An investor concerned with a predictable source of income provided by an investment would choose ________ A: government bonds
If interest rates in the overall economy decrease, what will happen to the market value of a corporate bond, with a fixed interest rate? B: The value of the bond will increase
A bond that is repaid from the income generated by the project it is designed to finance is called a C: revenue bond
A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a _______ stock. D defensive
Which of the following investments offers the greatest liquidity? interest- bearing checking accounts
A bond that is backed only by the reputation of the issuing corporation is called a ________ bond A: debenture
All the different management fees and funds operating costs are often referred to as a _______ B: expense ratio
A mutual fund that invests in companies outside the US is called a ________ fund. C: international
A MF in which new shares are issued and redeemed by the investment company at the requests of investors is called a _______ fund open-end
A stock that pays higher than average dividends is called a ____ stock D: income
Bad products or poor financial management may result in investors experiencing _____ risk. C: business failure
A bond back by the full faith, credit, and unlimited taxing power of the government that issued it is called a ________ bond. B General Obligation
Which of the following investments would rank the highest with regard to safety? A: government stocks
Equity financing is a popular choice to provide long-term financing for a corporation because… B: it does not have to be repaid
A stock that is issued by a corporation that has a large amount of capitalization is called a __________ stock C: large-cap
A stock that remain stable during declines in the economy is called a ________ stock. A: defensive
A deduction from adjusted gross income for yourself, your spouse and qualified dependents is E: an exemption
For a dependent to qualify as an exemption, he or she must… D: receive more than one half of his or her support from the taxpayer
An example of a tax-exempt investment is… D: interest on municipal bonds
For which of the following types of credit plans is the interest tax deductible? A: a home equity loan
An expense that would be included in the itemized deductions of a taxpayer is… C: real estate property taxes
___________ are expenses that a taxpayer is allowed to deduct from adjusted gross income C: itemized deductions
Personal finance planning has the main goal of… C: putting money to work and living within your means
A family with $45,000 in assets and $22,000 of liabilities would have a net worth of… B: $23,000
Attempts to increase income are part of the _____ component of financial planning. B: obtaining
With an inflation rate of 9 percent, prices would double in about ____ years. 8
Money management refers to… B: day-to day financial activites
A personal budget sheet presents… D: items owned and amounts owed
A cash-flow statement reports a person or family’s B: current income and payments
A formalized report that summarized your current financial situation, analyzes your financial needs and recommends a direction for your financial activities is a B: financial plan
The main responsibility of The Fed is to B: approve spending by Congress
The first step of the financial planning process is to … C. analyze your current personal and financial situation
The study of how wealth is created and distributed is D: economics
Items with monetary worth are referred to as E: assets
If you put $1000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years? A: future value of a single amount
To determine a person’s solvency, which financial document should be consulted? B: budget
Which type of audit is the least complicated for taxpayers? D: a correspondence audit
The time value of money refers to D: increases in an amount of money as a result of interest
What type of tax is imposed on the value of an individuals property at the time of his or her death? E: estate
________ risk refers to the danger of lost buying power during times of rising prices. D: inflation
The use of legitimate methods to reduce ones taxes is tax _____. B: avoidance
A tax credit of $50 for a person in a 28 percent tax bracket would reduce a persons taxes by D: $50
Current liabilities differ from long-term liabilities based on D: when the debt is due
Which of the following situation is a person who could be insolvent? D: Assets $40k and Liabilities $45k
Liabilites are amounts representing A: debts
Capital gains refer to C: profits from the sale of an investment asset
The ____ property tax is based on the value of land and buildings. B: real estate
A tax ____ is an amount subtracted directly from the amount of taxes owed. A: credit
Future value calculations are also referred to as C: compounding
The main purpose of taxes is to A: generate revenue for funding of government programs
Which of the following items is a set amount on which no taxes are paid? B: standard deduction
Which type of tax is imposed on specific goods and services at the time of purchase? C: excise
A decrease in net worth would be result of B: expenses greater than income for a month
The problem of bankruptcy is associated with poor decisions in the ____ component of financial planning. D: borrowing
As Jean Tyler plans to set aside funds for her young children’s college education , she is setting a _____ goal B: long-term
The current financial position of an individual or family is best present with the use of a C: balance sheet
The financial planning process concludes with efforts to E: review and revise your actions
Which of the following would result in reduction of taxable income? C: passive income
Payments that do not vary from month to month are ___ expenses. A: fixed
The difference between the amount budgeted and the actual amount is called a D: budget variance
A major activity in the planning component of financial planning is D: allocating current resources for spending
Opportunity costs refers to B: trade-off of a decision
Liquid assets refer to B: items that are easily converted to cash
The main economic influence that determines prices is E: supply and demand
If a family planned to spend $370 for food during march but only spent $348, the difference is referred to as an A: surplus
The ability to convert financial resources into usable cash with ease is referred to as B: liquidity
Information about a personal bankruptcy may be reported on your credit file for D: 10 years
Ursula wants to have an interest rate that can increase or decrease during the life of her loan. She would look for a A: ARM
The use of property or savings to secure a loan relates to D: collateral
Which of the following is a legal form of ownership in which the owners pay a monthly fee for maintenance of the common areas. A: condominiums
Rebecca paid extra money to reduce her mortgage interest rate. The extra money is called E: points
If you do not pay back any of the loan amount for a portion of the loan period you gave a E: interest-only mortgage
What should a home-buyer consider when evaluating a house? E: all- going laws, location of business and future construction sites, school system, property values of community
Frank and Diane want to buy a house. Which of the following do they need before they purchase a house? A: down payment
Which of the following is an account used to pay property taxes and home insurance? B: Escrow
Most products come with some guarantee of quality. This type of warranty covers the products intended use of other basic understandings that are not written. D: implied warranty
Experts suggest that the debt payment to income ratio be a maximum of B: 20%
Which of the following is an example of open-end credit? B: a department store credit card
Which of the following is a disadvantage of renting B: tenants cannot take tax deductions for mortgage interest and property taxes
If you have a mortgage that has fixed monthly payments and a very large final payment, you have a A: balloon mortgage
Most products come with some guarantee of quality. Which of the following is usually in written form created by the seller or manufacturer and has two forms? B: express warranty
Helga plans to purchase a pickup truck. She should begin her price negotiation at the A: invoice price
Pauline just submitted an offer on her dream home. To show that she is serious, she included D: earnest money
The amount printed on a label with the suggested retail price that is posted on a vehicle is called the B: sticker price
This gives the landlord the right to take legal action against a tenant for nonpayment of rent or destruction of property A: Lease
Diane purchased her house and had it assembled before it was moved to her lot. She purchased a C: Manufactured home
A process used to settle grievances in a nonbinding process is called a D: Mediation
When purchasing a used vehicle, it’s a good idea to C: have a trained and trusted mechanic of your choice check out the vehicle
Which of the following is often considered to offer the least expensive loans? D: parents or family members
A credit card holder who pays off his balances in full each month is known as B: a convenience user
The primary benefit of a home equity loan is B: the deductibility of the loan interest on federal taxes
FICO scores generally range from C: 350 to 850
Which of the following is an advantage of renting? B: renters have fewer responsibilities than home owners
The APR is the percentage cost of credit on a ____ basis. D: annual
The question “Will you repay the loan?” relates to A: Character
The question “What are your assets and net worth/” relates to C: Capital
Adolph has a low income and needs legal assistance. He should make use of a C: legal aid society
All of the following are fixed operating costs for a vehicle except E:Maintence and repairs
Which of the following is a valid reason for borrowing? E: -all are
Trenton wants to buy a house but can provide only a 10% down payment He probably will be required to have D: PMI
Which of the following is an example of closed-end credit? A: a mortgage loan
A loan officer examines whether or not he will offer you a loan today Specifically, she is examine your income and debts, Which of the five C’s is the loan officer reviewing? B: Capacity
A variable operating cost for a vehicle is E: maintenance and repairs
Under CH. 7 of the US bankruptcy code C: Certain assets receive some protection
The dealer’s cost is also known as the A: invoice price
A standard measurement used to compare packages of different sized is D: unit pricing
LIST AND GIVE THE PERCENTAGE OF THE 5 KEY AREAS THAT MAKE UP YOUR CREDIT: pay on time 35%. Debt credit limit ratio 30%. Credit history 15%. New credit 10%. Mix of credit 10%.
What type of loan will never be forgiven, even with bankruptcy? Student
_________ is the time between the statement end date and the due date of the bill. Grace Period
__________ is the best billing cycle for a credit card. Daily.
What is the lowest credit score you can have and still get the best interest rate available when you borrow money? 720- 850
Jack needs comprehensive medical coverage; however, his income is quite low. What plan should he investigate C: medicaid
Tom wanted to receive as many discounts on his home insurance as possible. Which if the following would NOT provide a discount? E:- all would
Jenny wants health insurance that limits the amount that she must pay before the insurance starts paying benefits. She is concerned about a A: deductible
After you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. This is called B: out of pocket limit
If you choose to avoid the risk of a traffic accident by not driving to work, you are using A: risk avoidance
If you choose to wear your seatbelt, you are using B: risk reduction
The best place to keep a household inventory is D: in a safe deposit box
A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Which if the following riders should he consider? D: cost of living protection
Miguel is concerned that the health insurance option he is considering plays upon unrealistic fears. He is most concerned about a E: dread disease policy
If you have loss due to a flood, B: You need to have purchased special coverage if you live in an area that has frequent floods in order to be covered
Medicaid covers E: -all- specifics- i.e. eyeglasses
Another name for permanent life insurance is A: whole life
Which if the following is not temporary insurance? A: Whole life
After you purchase a life insurance contract, you have a “free look period” that lasts C: 10 days
Barbra left a skateboard on her front steps. Her neighbor tripped on the sk8board and was injured. The fact that Barbra didn’t put away the skateboard is called B: negligence
Medical payments coverage applies to medical expenses of A : anyone in your vehicle, including you
A policy that supplements your basic personal liability coverage is called a E: umbrella policy
All of the following are sources of disability income except E: – all – work comp, empl, priv income, SS
A person who is named to receive benfits from an insurance policy is a B: beneficiary
Pam just started working XYZ widget company and finally wants to get insurance coverage. She does not want tot take a medical exam to get coverage because she has underlying health conditions and is concered that she might not qualify for a policy. Which life policy should she apply B: group life
Madeline had a severe allergy attack and crashed her car into a telephone pole while sneezing, the damage to the pole would be covered under madelines B: property damage liability policy
Sandy went to the doctor 3 times, and each apt cost $200. Her copayment was $25 per visit How much was Sandy required to pay in total for her three visits? B: $75
Which of the following households most likely has the greatest need to life insurance? D: household with children
Which of the following is not a type of permanent insurance? D: term life
Which of the following is a poor choice for the amount of protection offered for an individual? C: credit life
Georgia has a health insurance policy that includes a deductible of $600 and a coinsurance of 20%. Other total bill is $4,000 how much will she be required to pay? D: $1,280
Katrina was injured in an accident at work, the benefits she will receive to cover part of her income will come from E: workers compensation.
Henry was driving at dusk and hit a deer running across the road his damage would be covered under his C: collision policy
Nancy is studying the health insurance plan options offered by her employer, she wants a policy that will have the insurance pay a percentage of her med expenses after she meets her deductible B: coinsurance
Individuals over the age of 65 who are eligible for fed gov health paying coverage may also be interested in purchasing more coverages called D: medigap.
Andrew is applying for insurance for his new home. Which of the following is incorrect C: he should use the replacement value method for settling claims to receive the full cost of repairing or replacing his personal belongings
Most people receive health insurance from C: a plan offered by their employer
Which of the following should reduce your auto insurance premium C:good grades in college.
An insurance company will B: insure pure risk but not speculative risk
Which of the following is incorrect D: a bad disability policy pays you if you cannot work at your regular job.
Medicare part A covers D: inpatient hospital care.
Insurance that covers valuable items such as an expensive harp C: personal property loader
Most people buy life insurance to B: protect the people who depend on the insured from financial losses caused by his or her death
Fred bought life insurance 5 yrs ago he forgot to tell them that he had a heart condition and as a result of that condition he recently died, which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misinterpretation A:incontestiblitly clause.
Another name for temporary life insurance is… D: Term
Barbra left a skateboard on her front steps a windstorm swept it up through her window C: peril.
Homeowners insurance covers all of the following except D:auto insurance
Zach lived in a neighborhood that was known for gang activity, one day he noticed that his car had been vandalized, this damage would be covered under his D: comprehensive physical damage policy.
Barbra left a skateboard on her front steps. Her neighbor tripped on the skateboard and was injured. The skateboard was a A: Hazard
Mildred was diagnosed with terminal cancer and knows that she doesn’t have long to live which of the following writers would allow her to receive cash now E: accelerated benefits.
Fred bought life insurance when he was 47, although he told the insurance company he was 42, he has since died. Which will affect how much money his beneficiary will receive B: statement of age provision.
The set amount that you must pay toward medical expenses before the insurance company pays benefits is called C: deductible
Sally was driving her own car and collided with a pickup truck, sally sustained $100, 250 in injuries and her passengers sustained $10, 000 in injuries. If her coverage was 100/300/50 what are the total med expenses the insurance company would pay for this accident. C: $110,000.
Timothy is driving his friend to football practice, while driving he was hit by a driver who had a coverage of 100/300/50. Tim and Nick each suffered some physical injuries, based on this info which of the following info is correct. E: the policy would provide a max of $100,000 for each of the injured and no more than $300,000 for total injuries sustained in the accident.
Georgia was suppose to pay her premium by the 15th of the month, which of the following provisions allows her to keep her coverage if she is a couple weeks late with paying her premium E: grace period.

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