Archives
Finance Chapter 1 1 Interest on savings is calculated by multiplying the money amount times the opportunity cost times the annual interest rate
Chapter 01 – Personal Finance Basics and the Time Value of Money 1. (p. 2) Financial planning has specific techniques that will be effective for every individual and household. FALSE Bloom’s: Comprehension Difficulty: Medium Learning Objective: 01-01 Analyze the Process […]
Finance Chapter 1 2 Lynn Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home she owns
Chapter 01 – Personal Finance Basics and the Time Value of Money 61. (p. 6) The changing cost of money is referred to as ____________ risk. A. interest-rate B. inflation C. economic D. trade-off E. personal Bloom’s: Knowledge Difficulty: Medium […]
Finance Chapter 10 1 The purpose of insurance is to help protect you and your family against financial hardship due to hazard, accident, death, and similar risks.
Chapter 10 – Property and Motor Vehicle Insurance 1. (p. 317) The purpose of insurance is to help protect you and your family against financial hardship due to hazard, accident, death, and similar risks. TRUE Bloom’s: Comprehension Difficulty: Easy Learning […]
Finance Chapter 10 2 Which one of the following refers to a category based on age, sex, marital status, and driving habits that is used to set automobile insurance premiums
Chapter 10 – Property and Motor Vehicle Insurance 55. (p. 335) ____________ protects you against financial loss when your car damages the property of others. A. Collision B. Comprehensive physical damage C. Property damage liability D. No-fault insurance E. Assigned […]
Finance Chapter 11 1 39 Basic health insurance coverage includes hospital expense insurance, surgical expense insurance, and physician expense insurance
Chapter 11 – Health, Disability, and Long-Term Care Insurance 1. (p. 348) The United States has the lowest per capita medical expenditures of any industrialized country in the world. FALSE Bloom’s: Knowledge Difficulty: Medium Learning Objective: 11-01 Explain why the […]
Finance Chapter 11 2 Julie Cumbie is playing softball and gets hurt sliding into second base. She gets an x-ray at her doctor’s office to make sure her ankle isn’t broken
Chapter 11 – Health, Disability, and Long-Term Care Insurance 76. (p. 356) Joe Johnson needs surgery for appendicitis. Which part of his basic insurance coverage should help pay for this surgery? A. hospital expense B. surgical expense C. physician expense […]
Finance Chapter 11 3 Which type of insurance provides for the partial replacement of income lost by employees as a result of an accident or illness
Chapter 11 – Health, Disability, and Long-Term Care Insurance 114. (p. 369) Hospital insurance (Part A) of Medicare is financed from part of the ____________ tax. A. state income B. federal excise C. individual income D. corporate income E. Social […]
Finance Chapter 12 1 Although it is impossible to put a price on the life of an insured person, most adults probably are covered by some life insurance
Chapter 12 – Life Insurance 1. (p. 389) Most people buy life insurance to protect someone who depends on them from financial losses caused by their death. TRUE Bloom’s: Comprehension Difficulty: Easy Learning Objective: 12-01 Define life insurance and describe […]
Finance Chapter 12 2 Which method of determining life insurance requirements is designed specifically for a working couple with no dependents
Chapter 12 – Life Insurance 78. (p. 388) Which is a correct statement about life insurance? A. People are less apt to actively seek life insurance than health insurance. B. Private sources are the only available sources for life insurance. […]
Finance Chapter 12 3 Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes. What type of term life insurance does Renee likely have
Chapter 12 – Life Insurance 126. (p. 397) Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes. What type of term life insurance does Renee likely have? A. straight B. renewable C. […]
Finance Chapter 13 1 A credit ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card
Chapter 13 – Investing Fundamentals 1. (p. 424) The decision to establish an investment plan is an important first step to accomplishing your financial goals. TRUE Bloom’s: Comprehension Difficulty: Easy Learning Objective: 13-01 Describe Why You Should Establish an Investment […]
Finance Chapter 13 2 Lester McCann wants to invest but is worried about risk. In particular, he is worried that the money he invests today will not buy as much ten years from now
Chapter 13 – Investing Fundamentals 61. (p. 433) Lester McCann wants to invest but is worried about risk. In particular, he is worried that the money he invests today will not buy as much ten years from now. What type […]
Finance Chapter 13 3 Which one of these investments pools the funds of many investors and hires a professional money manager to manage those funds
Chapter 13 – Investing Fundamentals 90. (p. 441-442) Which one of these investments pools the funds of many investors and hires a professional money manager to manage those funds? A. NOW account B. securities exchange C. certificate of deposit D. […]
Finance Chapter 14 1 A proxy is a legal form that lists the issues to be decided at a stockholders’ meeting and requests that stockholders transfer their voting rights to some individual or individuals
Chapter 14 – Investing in Stocks 1. (p. 462) Since 1926, stocks as measured by the Standard & Poor’s 500 Index have returned on average about 10 percent a year. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 14-01 Identify the […]
Finance Chapter 14 2 The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances
Chapter 14 – Investing in Stocks 65. (p. 468) A stock that pays higher than average dividends is called a(n) ____________ stock. A. defensive B. cyclical C. growth D. income E. blue-chip Bloom’s: Knowledge Difficulty: Easy Learning Objective: 14-02 Explain […]
Finance Chapter 14 3 In order for a corporation’s stock to be bought and sold on the New York Stock Exchange, the corporation must meet certain requirements
Chapter 14 – Investing in Stocks 99. (p. 477) The Arnold Fertilizer Company’s stock is selling for $55 in the market and its earnings per share is $5. The company is projected to grow at a rate of 22% over […]
Finance Chapter 15 1 A convertible bond is a bond that can be exchanged, at the owner’s option, for a specified number of shares of the corporation’s common stock
Chapter 15 – Investing in Bonds 1. (p. 500) A corporate bond is a corporation’s written pledge that it will repay a specified amount of money with interest. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 15-01 Describe the characteristics of […]
Finance Chapter 15 2 Dave Johnson’s objective was to purchase a government bond that provided some protection against inflation and higher prices. To fulfill this objective
Chapter 15 – Investing in Bonds 66. (p. 513) A government security issued in $100 units with maturities of more than one year but not more than ten years is called a: A. subordinated bond. B. Treasury bill. C. Treasury […]
Finance Chapter 15 3 Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds
Chapter 15 – Investing in Bonds 15–33 99. (p. 520) Which one of the following bonds is most apt to have the highest interest rate? All of the bonds mature in 10 years. Bloom’s: Comprehension Difficulty: Hard Learning Objective: 15-05 […]
Finance Chapter 16 1 An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index
Chapter 16 – Investing in Mutual Funds 1. (p. 536) In late 2009, there were over 12,000 mutual funds, and the number continues to increase each year. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 16-01 Describe the Characteristics of Mutual […]
Finance Chapter 16 2 67 Joseph Carter is buying shares in a mutual fund that is investing in stocks all over the world, including the United States. What type of mutual fund is this
Chapter 16 – Investing in Mutual Funds 16–21 67. (p. 545) A mutual fund that invests in common stocks of rapidly growing corporations with higher-than-average revenue and earnings growth is called a(n) ____________ fund. Bloom’s: Knowledge Difficulty: Medium Learning Objective: […]
Finance Chapter 16 3 Noelle Simon is buying shares in a mutual fund that only invests in companies located in Latin America. What type of mutual fund is this
Chapter 16 – Investing in Mutual Funds 102. (p. 546) Noelle Simon is buying shares in a mutual fund that only invests in companies located in Latin America. What type of mutual fund is this? A. aggressive growth fund B. […]
Finance Chapter 17 1 With an indirect real estate investment, the investors appoint a trustee to hold legal title on behalf of all the investors in the group
Chapter 17 – Investing in Real Estate and Other Investment Alternatives 1. (p. 571) In a direct real estate investment, the investor holds legal title to the property. TRUE Bloom’s: Knowledge Difficulty: Medium Learning Objective: 17-01 Identify Types of Real […]
Finance Chapter 17 2 Jane Calvert owns a condominium at the beach which she rents out to vacationers. What type of investment does she hold
Chapter 17 – Investing in Real Estate and Other Investment Alternatives 78. (p. 576) Federal law requires REITs to: A. distribute at least 90 percent of their earnings to shareholders. B. engage in short-term holdings of real estate. C. register […]
Finance Chapter 17 3 During which of the following economic periods is the price of a precious metal, such as gold, silver or platinum, likely to increase
Chapter 17 – Investing in Real Estate and Other Investment Alternatives 110. (p. 580) Which of the following can be a management problem when investing directly in real estate? A. maintaining the rental property B. inability to sell your interest […]
Finance Chapter 18 1 You can depend on your employer’s health insurance plan and Medicare to pay all your medical expenses when you retire.
Chapter 18 – Starting Early: Retirement Planning 1. (p. 594) You can depend on your employer’s health insurance plan and Medicare to pay all your medical expenses when you retire. FALSE Bloom’s: Knowledge Difficulty: Medium Learning Objective: 18-01 Recognize the […]
Finance Chapter 18 2 During retirement, as long as you do not earn more than the annually exempt amount, your Social Security payments will not be affected.
Chapter 18 – Starting Early: Retirement Planning 79. (p. 620) A Keogh plan is also called a self-employed retirement plan. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 18-05 Determine your planned retirement income Topic: Personal retirement plans 80. (p. 620) […]
Finance Chapter 18 3 Karen Endicott is planning for her retirement. She knows that after she retires she will no longer need her own single family dwelling
Chapter 18 – Starting Early: Retirement Planning 128. (p. 596) Beverly Foster is planning for her retirement. She has determined that her car is worth $10,000, her home is worth $150,000, her personal belongings are worth $100,000, and her stocks […]
Finance Chapter 19 1 Estate planning is a definite plan for the administration and disposition of one’s property during one’s lifetime and at one’s death.
Chapter 19 – Estate Planning 1. (p. 635) Many people do little, if any, estate planning. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 19-01 Analyze the personal aspects of estate planning Topic: Estate planning basics 2. (p. 635) Estate planning […]
Finance Chapter 19 2 Under what type of will does everything pass to your spouse, with the exception of an amount equal to the exemption, which passes into trust
Chapter 19 – Estate Planning 78. (p. 635) Gerald Wilkins owns a home worth $250,000, a car worth $15,000, various investments worth $600,000 and other personal assets worth $25,000. What are these things to Gerald? A. estate B. will C. […]
Finance Chapter 19 3 Under what type of ownership is the property considered owned 50-50 for estate tax purposes and passed automatically to your spouse at your death
Chapter 19 – Estate Planning 113. (p. 649) A legal arrangement through which your assets are held by a trustee for your benefit or that of your beneficiaries is called a: A. codicil. B. power of attorney. C. proxy. D. […]
Finance Chapter 2 1 Increased technology can result in a reduction of employment in one industry while creating new jobs in other industries
Chapter 02 – Financial Aspects of Career Planning 1. (p. 42) A job tends to have less of a long-term commitment to a field than a career. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 02-01 Activities Associated with Career Planning […]
Finance Chapter 2 2 Ned Turner has done some research and has found that the population in the U.S. is aging which means there will be an increased need for health care
Chapter 02 – Financial Aspects of Career Planning 52. (p. 71) What is the purpose of a cover letter? A. obtain career planning information B. request a reference for a job C. develop résumé information D. research a career area […]
Finance Chapter 3 1 Ben Chase needs to pay off some of his debts over the next few months. Which item on his balance sheet would help him decide what amounts are due in the near future
Chapter 03 – Money Management Strategy: Financial Statements and Budgeting 1. (p. 78) Money management activities refer to long-term investment decisions. FALSE Bloom’s: Knowledge Difficulty: Medium Learning Objective: 03-01 Recognize relationships among financial documents and money management activities Topic: Money […]
Finance Chapter 3 2 Jerry Allison needs to store the title to his car and his house. Where is the most appropriate place for Jerry to store this information
Chapter 03 – Money Management Strategy: Financial Statements and Budgeting 58. (p. 81-82) Patricia McDonald has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions […]
Finance Chapter 4 1 Exemptions are deductions for yourself, your spouse, and qualified dependents that you can deduct from adjusted gross income
Chapter 04 – Planning Your Tax Strategy 1. (p. 123) Taxes are only considered as financial planning activities in April. FALSE Bloom’s: Comprehension Difficulty: Easy Learning Objective: 04-01 Describe the importance of taxes for personal financial planning Topic: Financial Planning […]
Finance Chapter 4 2 Tim Bridges owns a bass fishing boat. His state imposes an annual 3.25 percent tax on the current value of this boat. What type of tax is this most likely to be
Chapter 04 – Planning Your Tax Strategy 58. (p. 130) Union dues, fees for tax return preparation, and other miscellaneous expenses are: A. not deductible. B. fully deductible. C. deductible for self-employed individuals only. D. deductible for people in certain […]
Finance Chapter 5 1 Based on the following information, what amount would be subtracted from the bank balance side of the checking account reconciliation
Chapter 05 – Financial Services: Savings Plans and Payment Accounts 1. (p. 143) Higher returns on savings will usually result in less liquidity. TRUE Bloom’s: Comprehension Difficulty: Medium Learning Objective: 05-01 Analyze Factors that Affect the Selection and Use of […]
Finance Chapter 5 2 Tim Gleason has set up a legal agreement that allows the First State Bank of Orlando to manage funds set aside for his daughter’s college education
Chapter 05 – Financial Services: Savings Plans and Payment Accounts 51. (p. 164) A personal check with guaranteed payment is called a: A. traveler’s check. B. bank draft. C. certified check. D. money order. E. cashier’s check. Bloom’s: Knowledge Difficulty: […]
Finance Chapter 6 1 It is safer to use credit, since charge accounts and credit cards let you shop and travel without carrying large amounts of cash
Chapter 06 – Introduction to Consumer Credit 1. (p. 171) Credit is an arrangement to receive cash, goods, or services now and pay for them in the future. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 06-01 Define consumer credit and […]
Finance Chapter 6 2 Which one of the following agencies can produce for a subscribing member, almost instantaneously, a report about your past and present credit activity
Chapter 06 – Introduction to Consumer Credit 75. (p. 178) A debit card: A. immediately deducts the cost of your purchase from your bank account. B. credits your account at the moment you buy goods or services. C. is a […]
Finance Chapter 6 3 Which federal law requires creditors to inform applicants of acceptance or rejection of their credit application within 30 days of receiving a completed application
Chapter 06 – Introduction to Consumer Credit 126. (p. 203) Which federal law requires creditors to inform applicants of acceptance or rejection of their credit application within 30 days of receiving a completed application? A. Truth in Lending Act B. […]
Finance Chapter 7 1 When more than one payment is made on a simple interest loan, the method of computing interest is known as the declining balance method
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives 1. (p. 213) After you have selected a product, you should buy it immediately before the store runs out of it. FALSE Bloom’s: Comprehension Difficulty: Easy Learning […]
Finance Chapter 7 2 If you dispute this debt, you must write to the debt collector and request verification of the obligation. How many days do you have to send this letter
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives 70. (p. 232) If you default on your automobile loan: A. an advance notice to you is required before your car is repossessed. B. no advance notice […]
Finance Chapter 7 3 Sarah Parker’s husband goes out with the ‘boys’ for a night on the town and gets home at 4 am waking everyone in the house
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives 104. (p. 229) Shelly Sanders gets a loan for $3,000 and repays the loan in 12 monthly payments of $258 per month. Under the rule of 78s, […]
Finance Chapter 8 1 Howard Ramsell recently became aware of implied warranties that exist for consumer purchases. An implied warranty exists as a result of
Chapter 08 – Consumer Purchasing Strategies and Legal Protection 1. (p. 260) The first phase in the buying process involves information gathering. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 08-02 Implement a Process for Making Routine Consumer Purchases Topic: Buying […]
Finance Chapter 8 2 Paul Spoon has noticed that interest rates have risen in recent months. He is worried that this may make it more difficult for him to finance the purchase of a car
Chapter 08 – Consumer Purchasing Strategies and Legal Protection 52. (p. 264) The purpose of the invoice price is to inform customers of the: A. sales tax on the vehicle. B. suggested retail price. C. sticker price. D. charge for […]
Finance Chapter 9 1 A balloon mortgage can help a homebuyer when interest rates are high but are expected to come down in the near future.
Chapter 09 – The Housing Decision: Factors and Finances 1. (p. 283) Most people select a place of residence based on available financial resources, needs, and lifestyle. TRUE Bloom’s: Knowledge Difficulty: Easy Learning Objective: 09-01 Evaluate Available Housing Alternatives Topic: […]
Finance Chapter 9 2 James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building. What type of housing is James most likely living in
Chapter 09 – The Housing Decision: Factors and Finances 54. (p. 306) Which of the following is an example of a closing cost? A. home inspection fees B. realtor fees C. earnest money D. title insurance E. down payment Bloom’s: […]