Based on the option quote, the June put should cost
I. more than $477.
II. more than $665.
III. more than the March and June 60 calls.
IV. more than the March 60 call but no more than the June 60 call.
A.I only
B.I, II, and IV only
C.I, II, and III only
D.I and III only
E.IV only
Financial responsibility is your knowledge of facts, concepts, principles, and
technological tools that are fundamental to be smart about money.
a.True
b.False
Millie wants a life insurance policy that forces her to save, but she would also like to
have her savings go into a mutual fund that tracks a large group of stocks. Which type
of policy should Millie select?
a. Variable life
b. Interest-sensitive life
c. Whole life
d. Index-universal life
A person who is a joint owner of an ____ account should understand that his/her share
of the assets in the account are distributed to the heirs of the deceased according to the
terms of his/her will.
a.joint tenancy with right of survivorship
b.tenancy in common
c.tenancy by the entirety
d.tenancy in common and tenancy by the entirety
The process of packaging and/or selling mortgages that are then used to back publicly
traded debt securities is called
A.collateralization.
B.securitization.
C.market capitalization.
D.stock diversification.
E.mortgage globalization.
According to the U.S. Census Bureau a person with a bachelor’s degree earns about
how much more per year than someone with a high school diploma?
a.$16,000
b.$26,000
c.$34,000
d.$56,000
Refer to Figure 3-1. According to the liquidity ratio, how long could Maria and John
continue to meet their expenses after a total loss of income?
a.Less than 1 month
b.Slightly more than 1 month
c.Nearly 5 months
d.Over 12 months
Loans past due 90 days or more and loans that are not accruing interest because of
problems of the borrower are called
A.loan losses.
B.net charge-offs.
C.provisional loans.
D.noncurrent loans.
E.contra loans.
Which of the following certificates of deposit is not covered by bank deposit insurance
offered by the FDIC?
a.investment certificate
b.variable-rate certificate of deposit
c.bump-up certificate of deposit
d.brokered certificate of deposit
Banking may be subdivided into at least three categories of banks. Match the
definitions with the appropriate name.
I. A bank that specializes in retail or consumer banking in a local market
II. A bank that engages in a complete array of wholesale commercial banking activities
and usually also provides retail banking services
III. A bank that is located in a financial center and relies on nondeposit or borrowed
sources of funds for a significant portion of its liabilities
A.money center bank; community bank; super-regional bank
B.community bank; money center bank; super-regional bank
C.super-regional bank; money center bank; community bank
D.money center bank; super-regional bank; community bank
E.community bank; super-regional bank; money center bank
On September 1, 2012, an investor purchases a $10,000 par T-bond that matures in 12
years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last
coupon payment (110 days before the next). The ask yield is 7 percent. The dirty price
of the bond is
A.$9,295.45.
B.$9,300.55.
C.$9,313.75.
D.$9,321.82.
E.$9,333.24.
Ben and Luke are twin brothers age 70. Both are retired and they earned roughly the
same income all their working years. Ben put 12 percent of his salary into a retirement
plan while employed. Luke did not. Which of the following is true about their situation
today.
a.Luke collects more in Social Security benefits than Ben.
b.Ben and Luke collect about the same level of Social Security benefits.
c.Social Security is a smaller percentage of Ben€s income than Luke’s.
d.Ben and Luke collect about the same level of Social Security benefits and Social
Security is a smaller percentage of Ben€s income than Luke’s.
Bearer bonds are bonds
A.with coupons attached that are redeemable by whoever has the bond.
B.where the registered owner automatically receives bond payments when scheduled.
C.in which the issue matures on a series of dates.
D.issued in another currency other than the bond issuer’s home currency.
E.issued in a different country other than the bond issuer’s home country.
Which of the following statements about GNMA is/are true?
I. GNMA provides timing insurance.
II. GNMA creates pools of mortgages and issues securities.
III. GNMA insures only FHA, VA, and FMHA loans.
IV. GNMA requires that all mortgages in the pool have the same interest rate.
A.I, II, III, and IV are true
B.I, III, and IV only
C.I, II, and III only
D.II, III, and IV only
E.III and IV only
Which of the following is a general term used to describe an HMO, health insurance or
another plan that pays for or provides reimbursement for direct health care
expenditures? A legal document that directs life support measures, such as a respirator,
to be removed is called
a.hospitalization.
b.Medicare.
c.health insurance.
d.a health care plan.
You purchase a $325,000 town home and you pay 25 percent down. You obtain a
30-year fixed-rate mortgage with an annual interest rate of 5.75 percent. After five years
you refinance the mortgage for 25 years at a 5.1 percent annual interest rate. After you
refinance, what is the new monthly payment (to the nearest dollar)?
A.$1,422
B.$1,401
C.$1,366
D.$1,335
E.$1,296
A future is a type of forward contract that is standardized usually in terms of
All of these.
a.size of contract.
b.quality of product to be delivered.
c.delivery date.
d.All of these.