Refer to Figure 4-1. What is Tony and Liz’s taxable income?
a.$15,600
b.$28,000
c.$35,000
d.$63,000
A stock has a spot price of $55. Its May options are about to expire. One of its puts is
worth $5 and one of its calls is worth $10. The exercise price of the put must be
______________ and the exercise price of the call must be ________________.
A.$50; $45
B.$55; $55
C.$60; $45
D.$60; $50
E.One cannot tell from the information given.
Using a front-end ratio of 28 percent, one would need an annual gross income of at least
____ to buy a home with total monthly payments of $1,245.
a.$43,057
b.$53,357
c.$62,250
d.$63,115
The NYSE specialists are charged with
I. trading for their own account.
II. ensuring public limit orders are executed.
III. facilitating processing public market orders.
A.I only
B.I and II only
C.II and III only
D.I and III only
E.I, II, and III
The concept underlying purchasing power parity is the
A.Fisher effect.
B.Bretton Woods Agreement.
C.law of one price.
D.Big Mac Index.
E.balance of payments concept.
Which of the following is the major monetary policy making body of the U.S. Federal
Reserve System?
A.FOMC
B.OCC
C.FRB bank presidents
D.U.S. Congress
E.Group of Eight
Financial planning is only for the rich.
a.True
b.False
Refer to Figure 10-1. After the house was finally restored to its previous condition,
Roberto and Denise decided to have a housewarming party. At the party, Roberto and
Tom, one of their guests, were injured by a limb that fell out of a tree. Roberto’s trip to
the emergency room cost $1,225, while Tom’s medical bill was $3,000. How much, if
any, of these costs would be covered by the couple’s homeowner’s policy?
a.$0
b.$1,225
c.$3,000
d.$4,225
Refer to Figure 4-1. What is Tony and Liz’s adjusted gross income?
a.$43,800
b.$55,400
c.$60,000
d.$6,100
_________ and __________ allow a financial intermediary to offer safe liquid
liabilities such as deposits while investing the depositors’ money in riskier illiquid
assets.
A.Diversification; high equity returns
B.Price risk; collateral
C.Free riders; regulations
D.Monitoring; diversification
E.Primary markets; foreign exchange markets
The bank’s ROE is
A.15.65 percent.
B.13.21 percent.
C.19.55 percent.
D.11.17 percent.
E.12.67 percent.
Net loans and leases plus ________________ plus _________________ equals gross
loans and leases.
A.earned income; provision for loan and lease losses
B.unearned income; the allowance for loan and lease losses
C.net charge-offs; provision for loan and lease losses
D.provision for loan and lease losses; allowance for loan and lease losses
E.none of the options
The fairest method for calculating interest on an account used ____ method for
determining the balance to which the interest rate is applied.
a.minimum-balance
b.quarterly compounding
c.APY
d.average daily balance
Checks allow you to transfer funds from your account to other people and
organizations.
a.True
b.False
____ risk represents the uncertainty that the yield on an investment will deviate from
what is expected.
a.Financial
b.Premium
c.Investment
d.Market
Should the person covered by life insurance die before repaying a policy loan, the life
insurance company will pay the entire face value of the policy to the beneficiaries.
a.True
b.False