1.Unmarried couples face formidable retirement and estate planning challenges.
Answer:TRUE2.A mortgage bond is a
corporate bond that is secured by various assets of the issuing firm.
Answer:TRUE3.During retirement, you
should increase your premium payments by increasing the face value of your life
insurance.
Answer:FALSE4.Most decisions have only a
few alternatives from which to choose.
Answer:FALSE5.A three percent rate of
inflation will cause prices to double every 24 years.
Answer:TRUE6.Social Security is a package
of protection, providing retirement, survivors’, and disability benefits.
Answer:TRUE7.Accurate recordkeeping can
help you spot opportunities to maximize profits or reduce dollar losses when you sell your
investments.
Answer:TRUE8.Opportunity costs refer to
what a person gives up when making a decision.
Answer:TRUE9.The Fair Debt Collection
Practices Act regulates the ways debt collection agencies do business.
Answer:TRUE10.A defensive stock is a
stock that typically sells for less than $1.
Answer:FALSE11.If you cosign, the creditor
can collect this debt from you without first trying to collect from the borrower.
Answer:TRUE12.Your first step in retirement
planning is to analyze your current assets and liabilities.
Answer:TRUE13.For some debtors,
bankruptcy has become an acceptable tool of credit management.
Answer:TRUE14.Dean Thomas has an
insurance policy that cannot be cancelled unless he fails to pay his premium. What
provision in his insurance policy would specify this?
A.eligibility
B.assigned benefits
C.benefit limits
D.guaranteed renewable
E.exclusions and limitations
Answer:D15.Another name for a mutual fund
that doesn’t charge a load, but does charge an ongoing higher 12b-1 fee is a class
____________ fund.
A.A
B.B
C.C
D.D
E.E
Answer:C16.Mike Cook has been receiving
calls at work every two hours from a collection company that is trying to collect a past due
loan from him. He believes this is harassment and that the collections company is not
allowed to do this. Which consumer protection law provides protection from this type of
harassment?
A.(A) Fair Credit Reporting Act
B.Fair Credit Billing Act
C.Equal Credit Opportunity Act
D.Fair Debt Collection Practices Act
E.Truth in Lending Act
Answer:D17.The ability to convert financial
resources into usable cash with ease is referred to as:
A.bankruptcy.
B.liquidity.
C.investing.
D.saving.
E.opportunity cost.
Answer:B18.A personal balance sheet:
A.predicts income and expenses.
B.reports what an individual or a family owes and owns.
C.reports income and expenses or an individual or a family.
D.predicts net worth of an economic entity.
E.analyzes debt payment activities.
Answer:B19.As a result of the recently
passed Health Care and Education Reconciliation Act, federal student loans come directly
from:
A.commercial banks.
B.finance companies.
C.the U.S. Department of Education.
D.the U.S. Department of Family Services.
E.credit unions.
Answer:C20.The total dollar amount you pay
to use credit is called the:
A.finance charge.
B.annual percentage rate.
C.price of the good/service purchased.
D.amortized rebate.
E.interest rate.
Answer:A21.If you think that your bill is
wrong, you should first:
A.contact the local credit bureau and inform it of the billing error.
B.complain to the Better Business Bureau.
C.contact your state consumer protection agency.
D.notify the creditor in writing within 60 days after the bill was mailed.
E.contact your attorney to settle the matter.
Answer:D22.Which one of the following
expenditures for retirees is most likely to increase?
A.health care
B.federal income taxes
C.clothing expenses
D.work-related expenses
E.state income taxes
Answer:A23.Which type of housing is
preferred by most persons who are approaching retirement?
A.house-sharing
B.present home
C.a smaller apartment
D.nursing home
E.boarding-house/rooming house
Answer:B24.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(n) ____________ stock.
A.defensive
B.cyclical
C.growth
D.income
E.blue-chip
Answer:C25.The yield-to-maturity takes into
account the relationship among a bond’s maturity value and the:
A.time to maturity.
B.current price.
C.dollar amount of interest.
D.current price and dollar amount of interest only.
E.time to maturity, current price, and dollar amount of interest.
Answer:E26.Legislation that requires that
loan applicants be given certain information, including an estimate of closing costs, before
the closing is known as:
A.Real Estate Settlement Procedures Act
B.Cooperative Lending Act
C.Truth in Lending Act
D.Title Insurance Act
E.Real Estate Investment Act
Answer:A27.A allows a taxpayer to put
pre-tax dollars into an employer-sponsored program to cover medical and child care costs.
A.tax credit
B.tax deduction
C.flexible spending account
D.tax deferred investment
E.tax exempt investment
Answer:C28.The 2001 CSO Table separates
the mortality experience by:
A.age.
B.income level.
C.occupation.
D.domicile.
E.sex.
Answer:E29.Anthony Newton wants to buy a
new sail boat. He makes a down payment of $10,000 which represents 20% of the value of
the sail boat he is purchasing. In which way is Anthony reducing his lender’s risk:
A.He is sharing the interest rate risk with his lender.
B.He is pledging valuable assets that can be seized if the loan is not repaid.
C.He is taking a larger stake in the asset he is purchasing.
D.He is repaying the loan over a faster period of time.
E.None of the other answers.
Answer:C30.If the board of directors
approves a two-for-one stock split, an investor who owns 150 shares before the split will
own ____________ shares after the split.
A.75
B.150
C.225
D.300
E.450
Answer:D
After-split shares = 150 x 2 = 300 shares
31.Stock dividends are determined by the:
A.chief financial officer.
B.board of directors.
C.stockholders.
D.corporate employees.
E.U.S. government.
Answer:B32.Which form would an
individual use who has less than $100,000 in taxable income from wages, salaries, tips,
unemployment compensation, interest, or dividends, and who is married and does not
itemize deductions?
A.Form 1040X
B.Form 1040EZ
C.Form 1040A
D.Schedule A
E.Schedule E
Answer:C33.Jeff Willis has a budget that he
follows each month. He has used Microsoft’s Money to help him determine what he wants
to spend each month. At the end of the month, Money automatically compares what he
budgeted with what he spent. Jeff can also graph these results if he wants to. What type of
budget has Jeff created?
A.mental budget
B.physical budget
C.written budget
D.computerized budget
E.none of the answers
Answer:D34.Mike Jacobs is planning to
lease an automobile. In an effort to minimize the price of the vehicle being leased, Mike
should compare the ____________ at different leasing companies.
A.down payment
B.capitalized cost
C.money factor
D.residual value
E.number of payments
Answer:B35.Which of the following would
most likely be classified as a current liability?
A.monthly balance due on a credit card
B.total amount of a mortgage
C.balance of a student loan
D.total of a home improvement loan
E.balance of an auto loan
Answer:A36.Brenda Johnson has used a
preprinted form that she got from the internet to create her will. What type of will has she
created?
A.holographic
B.formal
C.statutory
D.casual
E.living
Answer:C37.If you put $1,000 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
B.simple interest
C.present value of a single amount
D.present value of a series of deposits
E.future value of a series of deposits
Answer:A38.Medical insurance is which part
of Medicare?
A.Part A
B.Part B
C.Part C
D.Part D
E.Part E
Answer:B39.When investors purchase bonds
that mature at regular intervals in order to balance risk and return, they are creating a:
A.bond ladder.
B.staggered investment program.
C.incremental investment program.
D.step-up allocation program.
E.guaranteed investment program.
Answer:A40.Which of the following
payments would be considered a variable expense?
A.rent
B.installment loan payment
C.mortgage payment
D.payment on a car loan
E.water bill
Answer:E41.If you have a problem with your
creditor, the best solution is to:
A.file a lawsuit against the creditor.
B.solve your problem directly with the creditor.
C.complain to the Federal Reserve System.
D.complain to the Board of Governors.
E.wait for creditor action.
Answer:B42.Which CD attempts to attract
savers with gifts or special rates?
A.bump-up
B.indexed
C.callable
D.global
E.promotional
Answer:E43.A endorsement is especially
useful when you are depositing checks.
A.blank
B.restrictive
C.common
D.special
E.documented
Answer:B44.David Wynn gets a personal
loan from his credit union for $1,000. David will make monthly payments $85.15 over the
next year to repay the loan. What type of financial service is David using?
A.payment service
B.savings service
C.borrowing service
D.trust service
E.asset management
Answer:C45.Owen Cartwright has joined a
real estate syndicate that bought an office building in downtown Orlando, Florida. What
type of investment does he hold?
A.direct investment in real estate
B.indirect investment in real estate
C.equity REIT
D.participation certificate
E.mortgage REIT
Answer:B46.If there is incorrect information
in your credit file:
A.you should sue the credit bureau.
B.the credit bureau has no power to change it.
C.the credit bureau must reinvestigate and modify or remove inaccurate data.
D.you must wait at least six months prior to launching an investigation.
E.you have no means of correcting it.
Answer:C47.Jennifer Garner purchases a
sofa, love seat and reclining chair for her family room and will make payments of $65 per
month for the next twenty-four months. What type of credit did Jennifer use?
A.installment sales credit
B.installment cash credit
C.single lump sum credit
D.revolving credit
E.incidental credit
Answer:A