____ would be a reasonable investment for funds that could be invested less than two
years.
a.Stocks paying high dividends
b.Short-term bonds
c.Money market mutual funds
d.Balanced mutual funds
You can save on life insurance by buying policies through fee-only financial planners
and fee-for-service insurance agents who specialize in
a. indexed universal life policies.
b. low-load life insurance.
c. viatical policies.
d. sliding scale commissions.
Service contracts are becoming more prevalent in the new car market because they are
generally a good value for consumers.
a.True
b.False
Gary contributes $200 a month to a flexible spending arrangement for health care. If
Gary is in the 25 percent marginal tax bracket, which of the following is true?
a.Gary will save $2,500 in federal income taxes.
b.Gary will save $2,400 in taxes.
c.Gary could write off $2,400 as an itemized deduction.
d.Gary will save $600 in federal income taxes.
Marvin was widowed at age 38 when his children were 8 and 10 years of age.
Assuming his deceased spouse was eligible for Social Security survivor’s benefits, how
many years would Marvin be in the “blackout period”?
a. 0 years
b. 10 years
c. 12 years
d. 13 years
Refer to Figure 12-1. Antonio and Trina decide to purchase a $300,000 policy on Trina
and a $250,000 policy on Antonio. How much would these policies cost if they were
$0.92 per $1,000 of coverage for Tina and $0.98 per $1,000 for Antonio? a. $230
b. $294
c. $521
d. $524
Ordinary income dividend distributions earned on ____ funds is tax-exempt for federal
income taxes.
a.small-cap
b.balanced
c.specialty
d.municipal bond
Investment securities plus ____________________ is equal to a bank’s earning assets.
A.net loans and leases
B.gross loans and leases
C.property, plant, and equipment
D.securities held for trading
E.purchased accounts
A tax credit of up to ____ is available for qualifying costs of an adoption.
a.$0
b.$1,000
c.$10,000
d.$13,190
What is the average share cost for the dollar-cost averaging strategy shown below?
a.$33.20
b.$34.29
c.$34.80
d.$36.00
The first attempt by a lender to dispose of a completely foreclosed property is at a
foreclosure auction.
a.True
b.False
Interest is the price of credit.
a.True
b.False
An investor wants to be able to buy 4 percent more goods and services in the future in
order to induce her to invest today. During the investment period prices are expected to
rise by 2 percent. Which statement(s) below is/are true?
I. 4 percent is the desired real risk-free interest rate.
II. 6 percent is the approximate nominal rate of interest required.
III. 2 percent is the expected inflation rate over the period.
A.I only
B.II only
C.III only
D.I and II only
E.I, II, and III are true
Which tax is assessed by the federal government against the estate of deceased person
before it is passed to heirs?
a.Estate tax
b.Inheritance tax
c.Excise tax
d.Flat tax
Financial experts estimate that retirees need at least ____ percent of their preretirement
income to live comfortably.
a.50 to 60
b.60 to 70
c.70 to 80
d.80 to 100
Silvia and Jason would like to purchase a home with the following monthly expenses:
Principal and interest$980
Homeowner’s insurance$350
Real estate taxes$265
Utilities$205
The couple needs to have an annual gross income of at least ____ in order to qualify for
a loan if the front-end ratio requirement is 26 percent.
a.$57,462
b.$61,385
c.$73,615
d.$83,077