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An example of inflation is an increase in the price of coffee or gasoline or some other
commodity.
a.True
b.False
Today, Stock A is worth $20 and has 1,000 shares outstanding. Stock B costs $30 and
has 500 shares outstanding. Stock C is priced at $50 per share and has 1,200 shares
outstanding. If, tomorrow, Stock A is priced at $22, Stock B at $35, and Stock C is
worth $48, what would the value-weighted index amount equal? (The index has a base
period value of 100.)
A.35.00
B.105.00
C.108.44
D.101.45
E.102.21
As compared to fixed-rate mortgages, ARMs result in which of the following for the
lender?
I. Higher interest rate risk
II. Lower default risk
III. Greater prepayment penalty fees
A.I, II, and III
B.I and II only
C.II and III only
D.I and III only
E.none of the options
If a prospective home buyer simply changes his or her mind after putting up earnest
money, he or she usually forfeits the money.
a.True
b.False
Financial security is marked by having high income.
a.True
b.False
Automobile medical payments insurance will pay for the driver's injuries in an auto
accident up to the policy limits.
a.True
b.False
Suppose that $10 million face value commercial paper with a 270-day maturity is
selling for $9.55 million. What is the BEY on the paper?
A.4.71 percent
B.6.42 percent
C.6.37 percent
D.6.28 percent
E.4.50 percent
The interest earned on a ____ will equal the inflation rate plus a fixed assigned rate of
return.
a.revenue bond
b.tax-exempt bond
c.Treasury bill
d.I-bonds
