Translating your current required annual retirement savings amount into a percentage of
total income and then investing that same percentage throughout your working life will
help you build a retirement savings fund that keeps up with
Social Security.
a.inflation.
b.taxes.
c.recessions.
d.Social Security.
The debt-to-income method of determining your debt limit compares nonmortgage
debts to take-home pay.
a.True
b.False
Jim spent $300 some new clothes rather than using this money to going to his college
team’s away game last weekend. his The benefits of the trip are the ____ cost of buying
the clothing.
a.marginal
b.utility
c.opportunity
d.present
Mutual funds that charge a load do so to compensate
a.fund managers.
b.Brokers and salespeople.
c.the SEC.
d.shareholders.
If the typical bank of this type has an overhead efficiency ratio of 0.65, then this
particular bank ___________________ than the typical bank, ceteris paribus.
A.is doing a poorer job generating profitable off-balance-sheet activities
B.is doing a better job time managing noninterest income and expenses
C.is paying higher taxes
D.has fewer loan losses
E.none of the options
Match the intermediary with the characteristic that best describes its function.
I. Provide protection from adverse events.
II. Pool funds of small savers and invest in either money or capital markets.
III. Provide consumer loans and real estate loans funded by deposits.
IV. Accumulate and transfer wealth from work period to retirement period.
V. Underwrite and trade securities and provide brokerage services.
1> Thrifts
2> Insurers
3> Pension funds
4> Securities firms and investment banks
5> Mutual funds
A.1, 3, 2, 5, 4
B.4, 2, 3, 5, 1
C.2, 5, 1, 3, 4
D.2, 4, 5, 3, 1
E.5, 1, 3, 2, 4
Buying and selling stocks quickly with the hope that the prices will move enough to
cover transaction costs is known as
a.short selling.
b.day trading.
c.margin trading.
d.cash trading.
Dividing the price of a product by the number of times it will likely be used provides its
______ and provides a way to compare among competing purchase options.
a.item price
b.cost-per-use
c.bottom line
d.unit-price.
A holder of Rainbow Funds convertible bonds with a $1,000 par and a $1,100 price can
convert the bond to 25 shares of common stock. The stock is currently priced at $36 per
share. By what percent does the stock price have to rise to make conversion potentially
attractive?
A.10.00 percent
B.14.73 percent
C.22.22 percent
D.23.64 percent
E.25.69 percent