Question 1 (1 point) Electronic options for withdrawals or payments include Question 1 options: A) automatic payments. B) debit and ATM cards C)…

Question 1 (1 point)

Electronic options for withdrawals or payments include

Question 1 options:

A) 

automatic payments.

B) 

debit and ATM cards

C) 

direct deposits.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 2 (1 point)

To estimate required savings, you need to estimate

Question 2 options:

A) 

the return on your savings in retirement.

B) 

how long you will be retired before you die.

C) 

what your expenses will be in retirement.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 3 (1 point)

Lenders determine their risk by assessing

Question 3 options:

A) 

the five C’s.

B) 

your credit score.

C) 

the prime rate.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 4 (1 point)

Future incomes and expenses can be projected for quantity and price on the basis of

Question 4 options:

A) 

probability.

B) 

volatility.

C) 

predictability.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 5 (1 point)

Property factors that determine the amount of property insurance premiums include

Question 5 options:

A) 

the age and size of the house.

B) 

the location and proximity to a hydrant.

C) 

the number of occupants.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 6 (1 point)

Your credit score is determined primarily on the basis of

Question 6 options:

A) 

your current debt.

B) 

how long you have been using credit.

C) 

your character.

D) 

your credit history.

E) 

the types of credit issued to you.

SaveQuestion 7 (1 point)

Your auto insurance premium may be reduced if

Question 7 options:

A) 

you pass a driver education course.

B) 

you live in an accident-prone or high crime area.

C) 

you have had an accident in the past three years.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 8 (1 point)

Financial management is significantly influenced by

Question 8 options:

A) 

microeconomic factors.

B) 

macroeconomic factors.

C) 

personal factors.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 9 (1 point)

Mortgage-backed securities are not good real estate investments for individual investors because they are

Question 9 options:

A) 

difficult to price.

B) 

vulnerable to economic cycles and default risk.

C) 

in real estate financing rather than real estate.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 10 (1 point)

The percentage of fund assets that are replaced in a year is the fund’s trading activity expressed as

Question 10 options:

A) 

the 12b-1 fee.

B) 

the capital gains distribution.

C) 

the expense ratio.

D) 

the dividend distribution.

E) 

the turnover ratio.

SaveQuestion 11 (1 point)

Investor constraints include all the following EXCEPT

Question 11 options:

A) 

tax obligations.

B) 

time horizon.

C) 

level of debt.

D) 

legal requirements.

E) 

liquidity needs.

SaveQuestion 12 (1 point)

A 401k plan

Question 12 options:

A) 

has a maximum contribution limit.

B) 

is a tax-deferred plan.

C) 

is a portable plan.

D) 

a. and b.

E) 

a., b., and c.    

SaveQuestion 13 (1 point)

Your prime directive as a consumer is to

Question 13 options:

A) 

live within your means.

B) 

avoid buyer’s remorse.

C) 

shop for bargains.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 14 (1 point)

Derivative contracts

Question 14 options:

A) 

include future and forward contracts.

B) 

are time-sensitive with an expiration date.

C) 

depend on the value of commodities.

D) 

a. and b.

E) 

a., b., and c.       

SaveQuestion 15 (1 point)

Which of the following measures is a way to avoid becoming the victim of an unscrupulous vendor or scam artist?

Question 15 options:

A) 

Second opinions

B) 

Verification of identity or certification

C) 

Written estimates

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 16 (1 point)

The costs of car ownership include

Question 16 options:

A) 

the down payment.

B) 

financing costs.

C) 

opportunity and liquidity costs.

D) 

a. and b.

E) 

a., b., and c.       

SaveQuestion 17 (1 point)

Mutual funds provide investors with

Question 17 options:

A) 

diversification.

B) 

security selection.

C) 

asset allocation.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 18 (1 point)

Returns from a mutual fund are returns on the securities it owns, including distributions of

Question 18 options:

A) 

interest.

B) 

dividends.

C) 

capital gains.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 19 (1 point)

The U. S. government’s retirement account, Social Security, is funded by

Question 19 options:

A) 

a mandatory payroll tax.

B) 

both employers and employees.

C) 

your income taxes.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 20 (1 point)

When you invest in an index fund you invest in

Question 20 options:

a mutual fund.

a fund reflecting the performance of similar securities.

a fund managed by a company, brokerage, or bank.

a. and b.

a., b., and c.

SaveQuestion 21 (1 point)

Examples of price advantages include all the following EXCEPT

Question 21 options:

A) 

discounts on excess inventory.

B) 

price discrimination.

C) 

brand or label discounts.

D) 

volume or quantity discounts.

E) 

seasonal or expiration date discounts.

SaveQuestion 22 (1 point)

Factors that lenders look at to evaluate borrowers include

Question 22 options:

A) 

your current debts and PITI calculation.

B) 

your income and employment.

C) 

your credit history and credit score.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 23 (1 point)

Alex realizes from his balance sheet that he could be facing personal bankruptcy within the year. He can prevent this from happening by

Question 23 options:

A) 

liquidating assets to pay creditors.

B) 

achieving positive net worth.

C) 

refinancing debt on different terms.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 24 (1 point)

As a car owner you can maximize the benefits you enjoy by

Question 24 options:

A) 

following the owner’s manual.

B) 

maintaining a valid driver’s license.

C) 

registering and insuring the car.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 25 (1 point)

Future capital expenditures can be projected on the basis of

Question 25 options:

A) 

financial history.

B) 

recurring incomes.

C) 

the time value of money.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 26 (1 point)

The study of risk and prediction of outcomes is based on 

Question 26 options:

A) 

the dynamics of probability.

B) 

the study of behavioral finance.

C) 

the uncertainty of independent events.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 27 (1 point)

Optional enhancements that lower risks and reduce premiums include all the following EXCEPT

Question 27 options:

A) 

smoke detectors.

B) 

burglar alarms.

C) 

fire extinguishers.

D) 

deadbolt locks.

E) 

electrical upgrades.

SaveQuestion 28 (1 point)

Perhaps the most critical information to have about an investment is its

Question 28 options:

A) 

potential return.

B) 

susceptibility to types of risk.

C) 

asset value.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 29 (1 point)

The financial decision-making process is complicated by all of the following factors EXCEPT

Question 29 options:

A) 

the use of information in planning.

B) 

uncertainty and risk.

C) 

the complexity of relationships among factors.

D) 

the relative importance of consequences.

E) 

the number of factors to consider.

SaveQuestion 30 (1 point)

The cash budget’s greatest value is in clarifying

Question 30 options:

A) 

risks and choices in the timing of cash flows.

B) 

attainable short-term goals and lifestyle goals.

C) 

the importance of cash management tools.

D) 

recurring incomes and expenses.

E) 

free cash flows for capital expenditures.

SaveQuestion 31 (1 point)

By buying shares in mutual funds, you

Question 31 options:

A) 

achieve diversification at lower transaction cost.

B) 

receive the benefit of professional expertise.

C) 

opt for passive portfolio management.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 32 (1 point)

Retirement planning involves

Question 32 options:

A) 

defining your goals.

B) 

saving for the time when you will not have income from employment.

C) 

estimating how much savings you will need to retire when you want.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 33 (1 point)

When you invest in stocks you

Question 33 options:

A) 

pay dividends.

B) 

sell equity for liquidity.

C) 

buy a share of a corporation.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 34 (1 point)

You decide you want to have a million dollars in the bank when you retire. Your bank pays 3% interest per year. If you start when you are 28, how much would you need to save each year to reach your goal by the time you are 68, assuming the interest rate stays the same?

Question 34 options:

A) 

Between $13,000 and $14,000 a year.     

B) 

Between $15,000 and $16,000 a year.

C) 

Between $19,000 and $20,000 a year.

D) 

Between $24,000 and $26,000 a year.

E) 

Between $10,000 and $11,000 a year.

SaveQuestion 35 (1 point)

Your PITI plus other debt should be what percent of your gross annual income?

Question 35 options:

A) 

50%

B) 

25%

C) 

33%

D) 

38%

E) 

15%

SaveQuestion 36 (1 point)

In financial planning, analyzing costs, benefits, and risks

Question 36 options:

A) 

reveals shortcuts to reaching your goals.

B) 

forces you to defer some goals.

C) 

helps you to choose alternatives.

D) 

prevents you from making bad decisions.

E) 

allows you to establish a budget.

SaveQuestion 37 (1 point)

You can negotiate all the following factors with car dealers, affecting the value of your purchase, EXCEPT

Question 37 options:

A) 

the trade-in value of your old car.

B) 

the price.

C) 

service discounts on maintenance.

D) 

the dealer’s warranty terms.

E) 

the manufacturer’s rebate.

SaveQuestion 38 (1 point)

The higher the lender’s risk, then

Question 38 options:

A) 

the lower your interest rate risk.

B) 

the lower your cost of debt.

C) 

the higher your cost of debt.

D) 

the higher your interest rate risk.

E) 

the lower your default risk.

SaveQuestion 39 (1 point)

Your time horizon for financial planning is

Question 39 options:

A) 

lifelong.

B) 

approximately 65 years.

C) 

the time it takes to set goals.

D) 

the five-year plan.

E) 

the time it takes to realize goals.

SaveQuestion 40 (1 point)

If you are risk averse, then you do not have enough

Question 40 options:

A) 

wealth or surplus to invest.

B) 

knowledge to invest with confidence.

C) 

time before you need your money for expenses.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 41 (1 point)

With a line of credit you can

Question 41 options:

A) 

borrow money as needed, up to a limit.

B) 

pay down each loan as desired.

C) 

pay interest only on the outstanding balance.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 42 (1 point)

When you invest in bonds you

Question 42 options:

A) 

loan money and receive interest

B) 

receive repayment of principal at maturity.

C) 

borrow money and pay interest.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 43 (1 point)

The Consumer Price Index is a measure of

Question 43 options:

A) 

GDP.

B) 

purchasing power.

C) 

consumption.

D) 

inflation.

E) 

recession.

SaveQuestion 44 (1 point)

A good credit rating would be based on all the following criteria EXCEPT

Question 44 options:

A) 

you can afford to take on more credit.

B) 

you have little or no current debt.

C) 

you have used credit appropriately in the past.

D) 

you depend on credit for regular expenses.

E) 

you have a record of paying what you owe on time.

SaveQuestion 45 (1 point)

A health insurance policy that covers physician expense, surgical expense, and hospital expense is called

Question 45 options:

A) 

dental and vision insurance.         

B) 

basic insurance.

C) 

a formulary.

D) 

major medical insurance.

E) 

group health insurance.

SaveQuestion 46 (1 point)

The most common uses of debt by consumers are

Question 46 options:

A) 

college loans.

B) 

car loans and home mortgages.

C) 

personal loans.

D) 

a. and b.

E) 

a., b., and c.

SaveQuestion 47 (1 point)

The Joneses believe it is important to try to reduce poverty and hunger globally by aiding local communities. They invest internationally in local businesses and nonprofit organizations that are effectively addressing the problem. Their strategy is an example of

Question 47 options:

A) 

social investment.

B) 

legal constraints.

C) 

unique circumstances.

D) 

risk tolerance.

E) 

divestment.

SaveQuestion 48 (1 point)

The future value of an annuity increases when

Question 48 options:

A) 

the present value increases.

B) 

the time value increases

C) 

the rate of compounding increases

D) 

a. and b.

E) 

a., b., and c.       

SaveQuestion 49 (1 point)

When you invest in an exchange-traded fund you invest in

Question 49 options:

A) 

a mutual fund.

B) 

a fund traded like a share of stock.

C) 

an index fund.

D) 

a. and b.

E) 

a., b., and c.