Many employers have gone to ____ in their retirement plan that allows the employer to
sign up all eligible employees rather than only sign up those who say they want to do
so.
a.defined-benefit initiation
b.defined-contribution sign-up
c.automatic enrollment
d.blanket enrollment
On July 1, 2012, you purchase a $10,000 par T-note that matures in five years. The
coupon rate is 8 percent and the price quote is 98:6. The last coupon payment was May
1, 2012, and the next payment is November 1, 2012 (184 days total). The accrued
interest is
A.$132.61.
B.$101.00.
C.$50.54.
D.$40.65.
E.$35.67.
A debt-to-income ratio of 0.36 or less is considered manageable for most families.
a.True
b.False
A contract wherein the buyer agrees to pay a specified interest rate on a loan that will be
originated at some future time is called a(n)
A.forward rate agreement.
B.futures loan.
C.option on a futures contract.
D.interest rate swap contract.
E.currency swap contract.
Which of the following are likely to lead to an appreciation of the U.S. dollar (ceteris
paribus)?
I. Higher real U.S. interest rates
II. Lower U.S. inflation
III. Higher nominal U.S. interest rates
A.II and III only
B.I and III only
C.I and II only
D.II only
E.I, II, and III
Refer to Figure 10-1. In the same fire, Roberto and Denise lost a large portion of their
personal property. The lost personal property will cost them $80,000 to replace, but it
had an actual cash value of only $48,000. How much will their insurance company pay
for the personal property loss?
a.$80,000
b.$48,000
c.$47,250
d.$40,000
Refer to Figure 12-1. Using a 7-year multiple-of-earnings approach, how much
additional life insurance is needed on Trina’s life? a. $625,000
b. $575,000
c. $350,000
d. $300,000
The agreement that ended the era of fixed exchange rates for the major economies was
called the
A.Louvre Accord.
B.Bretton Woods Agreement.
C.Smithsonian Agreement I.
D.Smithsonian Agreement II.
E.Plaza Accord.
A repo is in essence a collateralized
A.banker’s acceptance.
B.certificate of deposit.
C.Fed funds loan.
D.commercial paper loan.
E.Eurodollar deposit.
Refer to Figure 10-1. While they were on vacation, the Swansons’ home was damaged
by a fire. Repair of the damages to the house and the attached garage totaled $50,000.
How much will their insurance company pay for these repairs?
a.$180,000
b.$50,000
c.$37,500
d.$37,312
The rate of increase in prices of items purchased by a particular individual is called the
a.federal funds rate.
b.consumer confidence index.
c.personal inflation rate.
d.consumer price index.
Of the following, the most likely effect of an increase in income tax rates would be to
A.decrease the savings rate.
B.decrease the supply of loanable funds.
C.increase interest rates.
D.All of the options.
Matt has a three-year closed-end lease on his Prius V. His contract stipulates a $0.31 per
mile excess mileage charge in excess of 39,000 miles. If he actually drove the vehicle
45,000 miles during the three years, he would be charged an extra ____.
a.$0
b.$1,209
c.$1,860
d.$5,580
Selling your home yourself is commonly referred to as a FSBO (pronounced €fizzbo€)
sale.
a.True
b.False
A stock that has a negative beta tends to
a.be stable compared to the market as a whole.
b.be volatile compared to the market as a whole.
c.move up when the market as a whole moves down.
d.move up when the market as a whole moves down.
To reduce interest rate risk and smooth out interest rate fluctuations when purchasing
certificates of deposit (CDs) you can engage in
a.CD laddering.
b.CD layering.
c.grace period management.
d.money-market arbitrage.
Lance, a volunteer baseball coach, was hit by a hard line drive. As a result of the injury,
Lance was taken to the emergency room for treatment and admitted to the hospital.
Lance’s covered expenses totaled $4,000. How much of the $4,000 will Lance have to
pay if these are his first medical expenses of the year and he has the following health
insurance coverage?
$500 deductible per year
80/20 coinsurance
$1,000 per year out-of-pocket coinsurance cap
a.$500
b.$700
c.$1,000
d.$1,200