personal finance final

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A round lot of stock is any multiple of​ ________ shares.

100

If you own stock that has increased in​ price, it would be best to sell it after you have owned it for at least

12 months and one day.

Disability insurance would probably cost the most for which of the following​ people?

A construction worker

You have​ $3,000 that you may need any day to replace the furnace in your house. Which of the following would be the best place to put the​ $3,000?

A savings account earning​ 2%

Which act established provisions that require U.S. citizens to obtain health​ insurance?

Affordable Care Act

Which of the following is not true regarding certificates of deposit​ (CDs)?

All banks offer the same rates on CDs.

Information such as​ ________ can be easily found on a variety of Web sites.

All of the above

The knowledge of tax laws can help you

All of the above.

If spending exceeds the amount of your income over a period of​ time, your best option is probably to

All of these

Which factor affects a​ household's cash​ flows?

All of these

The concept of time value of money is important to financial decision making because

All of these are correct.

Money received today is worth more than the same amount of money received in the future. This is true because

All of these.

In​ general, insurance companies generate their revenues from

Both A and B are correct.

Organizational skills are an important component in developing a personal financial plan because

Both A and B are correct. [decisions related to one component of the plan may affect all other components. you can apply organizational skills on the job.]

Debt consolidation loans can be used to

Both A and B are correct.[lower total payments.replace higher interest rate debt.]

In saving or​ investing, the​ ________ the​ risk, the​ ________ the potential return.

Both A and B are correct.[​higher; higher. ​lower; lower]

Everything else being​ equal, the​ ________ the interest​ rate, the​ ________ the final accumulation of money.

Both A and B are correct.[​lower; lower. ​higher; higher]

The​ ________ the maturity of a​ loan, the​ ________ the payments.

Both A and B are correct[​longer; smaller. ​shorter; larger]

Additional types of insurance commonly offered through employers include

Both A and C are correct.[dental insurance. vision insurance.]

The personal cash flow statement measures

Both of are part of the cash flow statement.

Your net worth will not be increased by which of the following​ actions?

Buying a new home entertainment system and putting the entire amount on your credit card

Which of the following is the most​ risky?

Buying on margin

The Act that allows banks to transmit electronic images of​ checks, thus allowing funds to be transferred immediately is known as

Check 21.

Which of the following items will give you the greatest​ liquidity?

Checking account

Which of the following is not usually used as collateral for a​ loan?

Clothing

Which of the following financial institutions would be used the most by business customers wishing to borrow​ money?

Commercial banks

In comparing credit cards to other forms of​ credit, which of the following is​ true?

Credit cards are generally the most expensive form of credit.

Which of the following is not included in the loan​ contract?

Credit score

Which of the following is a nonprofit depository institution that provides services only to members who have a common​ affiliation?

Credit union

Which of the following is not a type of life insurance covered in the​ text?

Dependent life

Which of the following is not a tax filing status​ option?

Divorced

Which of the following would not be included in closing​ costs?

Earnest money

Which of the following is not a method by which financial institutions calculate finance charges on credit​ cards?

Ending balance method

Which of the following is not one of the three primary credit​ bureaus?

Fair Isaac Corporation

Effective estate planning will ensure that your wealth is distributed according to your​ wishes, but will do nothing to reduce the potential taxes your estate is subject to.

False

It is always easier to pay back what you borrow than to obtain credit in the first place.

False

It is good financial planning to pay only the minimum credit card payment and thus maintain a balance since interest rates are low on credit cards.

False

Your financial plan should include a plan for protecting and enhancing your assets and income through carrying excess insurance coverage so you can profit in the event of a loss.

False

Deposits at commercial banks are insured by a government- owned insurance agency called the

Federal Deposit Insurance Corporation.

Which of the following financial institutions specializes in making personal loans to people who are perceived to have a higher risk of​ default?

Finance companies

Which of the following is not covered by​ renter's insurance?

Fire damage to the​ building's roof

Which of the following is considered personal property for home insurance​ coverage?

Furniture

Which of the following is not a popular form of insurance for​ individuals?

General liability insurance

​________ mutual funds invest in both foreign bonds and U.S. bonds.

Global bond

Which of the following is a stock mutual​ fund?

Growth fund

Which of the following is not a reason investors purchase​ bonds?

Guaranteed return of principal

Jerry is divorced and has two children that live with him. What filing status should Jerry claim on his tax​ return?

Head of household

A budget will not do which of the​ following?

Help determine how much risk a family should take on investments

Which of the following statements is not true regarding education and financial​ position?

Higher education always guarantees a higher income.

Which of the following statements about student loans is not​ true?

If you​ don't complete your​ education, you will not have to pay back your student loan.

​________ funds are mutual funds that attempt to mirror the movements of existing broad market indicators.

Index

​________ are nondepository institutions that provide insurance to protect individuals or firms against possible adverse events.

Insurance companies

Which of the following is not a legitimate itemized​ deduction?

Interest paid on credit cards

Which of the following is a true statement about student​ loans?

Interest payments on some loans are deferred until the students graduate and enter the workforce.

A branch of the U.S. Treasury​ Department, called the​ ________, administers the federal tax system.

Internal Revenue Service

Which of the following is not true of common​ stock?

Investors in common stock are guaranteed a dividend.

Regarding​ Medicaid, which of the following is​ true?

It is a federal program administered by each state.

Of the following​ statements, which is not a disadvantage of using​ credit?

It is more difficult to obtain than repay.

In using the Internet to price​ insurance, which of the following is not ​true?

It is usually more expensive.

​________ are specific expenses instead of a standard amount that reduce adjusted gross income.

Itemized deductions

Which of the following is most important when selecting a​ home?

Location

Which of the following is not a good source of current stock​ quotations?

Magazines that focus on success stories of new businesses

Which of the following is true about​ condominiums?

Maintenance fees of common areas are shared.

Which of the following would increase your liquid​ assets?

Making regular deposits to a savings account at your bank

Which of the following is not a factor in the FICO credit​ scoring?

Marital status

​________ is the government program that provides health insurance to individuals who are 65 years of age or older.

Medicare

​________ management involves decisions regarding how much money to retain in a liquid form and how to allocate funds among shortminus term investment instruments.

Money

​________ management is a series of decisions made over a short- term period regarding cash inflows and outflows.

Money

​________ bonds are issued by state and local government agencies.

Municipal

The​ ________ is not a physical​ location, but rather an electronic communications network to buy and sell stocks.

NASDAQ

The stock exchange that is the largest in terms of listed​ companies' market capitalization is the

NYSE.

Which of the following would be considered the most high-risk driver?

Nineteen-year-old male

Which of the following is not true regarding preferred​ stock?

Preferred stock has greater potential for capital appreciation than common stock.

Yogi Berra Jr. has agreed to play for the New York Mets for​ $4 million per year for the next 10 years. What table would you use to calculate the value of this contract in​ today's dollars?

Present value of an annuity

Which of the following is not a method for computing interest on credit​ cards?

Present value of future payment method

Susie wants to know how much she needs to save today to have​ $5,000 in five years. Which of the following tables should she​ use?

Present value of​ $1

Which of the following is not a reason that your checking account balance might change from one month to​ another?

Purchasing new shoes with a credit card

Which of the following is an example of money​ management?

Putting your money in a savings account at your bank

When selling a​ home, which of the following costs will you​ incur?

Real estate​ agent's commission

Allison anticipates an additional car expense two months from now of​ $400 for new tires that she has not previously budgeted for. What action should Allison​ take?

Revise her car expenses over the next two months to allow for the additional cost of the new tires.

Which of the following goals would be easiest to​ measure?

Save​ $100 a month to create a​ $4,000 emergency fund

Which of the following would be a long- term ​goal?

Saving enough money to retire in 20 years

Investing in one of which of the following funds will typically give you the least​ diversification?

Sector funds

If you agree to allow the lender to take your computer in the event you fail to make​ payments, the loan is which of the​ following?

Secured

Which of the following is not a depository​ institution?

Securities firm

​________ are nondepository institutions that facilitate the purchase or sale of securities by firms or individuals by providing investment banking services and brokerage services.

Securities firms

FICA taxes include two​ components, which consist of

Social Security and Medicare contributions.

Which of the following is not an interest rate calculation method discussed in the​ text?

Sum of the digits interest

​________ insurance is life insurance that is provided over a specified time period and does not build cash value.

Term

Which of the following is not an example of a future​ value?

The balance in your checking account today

Which of the following is not covered in a standard​ homeowner's policy?

The river near your house overflows its bank and washes your house away.

Which of the following items is not a​ liability?

The wages you give up to take a class

Which of the following is not true about certificates of deposit​ (CDs)?

They are only offered in denominations of​ $100,000 or more.

Which of the following is not true regarding cash advances on credit​ cards?

They are treated just like other charges on your credit card.

Which of the following is not a reason some investors never purchase​ stock?

They​ don't want to make better returns.

​________ bonds are the least risky of all bonds​ and, therefore, pay a lower rate of interest.

Treasury

A mutual fund that buys only the stocks of gold mining companies is a good example of a sector fund.

True

Because credit card interest rates are usually quite​ high, you should pay off your credit card balances before you invest funds anywhere else.

True

Excessive use of credit can impair your ability to save money.

True

Mutual funds pool money from investors to purchase portfolios of investments.

True

Preferred stock dividends are paid before a firm can pay dividends on its common stock.

True

To prevent an overdraft or​ "bounced check," it is always a good idea to record each check written in your check register and reconcile your account balance when you receive your monthly bank statement.

True

When creating credit​ scores, credit bureaus rely on a model created by the Fair Isaac Corporation.

True

Which of the following will increase your need for life​ insurance?

You get married and plan to have children.

Credit has its advantages and disadvantages. Which of the following is false​?

You should spend up to the limit on all your credit cards.

Which of the following decisions would involve the use of the future value of a​ $1 ordinary annuity​ table?

You want to have​ $1,000,000 in order to retire at age​ 55, but need to know how much you will need to deposit each year from now until your 55th birthday.

If you have an accident resulting in​ $2,000 damage to your car and have​ $500 deductible collision​ coverage, which of the following statements is​ true?

You will pay the first​ $500 and your insurance company will pay​ $1,500.

Which of the following decisions would involve the use of the future value of​ $1? Select all that apply.

Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a cruise that will cost​ $7000 when you graduate from college in 4 years.

Why is it important to monitor and revise your financial plan from time to​ time?

Your financial position changes over time as does your​ personal, job, and family situation.

Which of the following is not an​ asset?

Your house that you rent

Which of the following is not an advantage of using ATM​ cards?

Your total banking expenses will be lower.

Financial institutions loan funds at​ ________ they pay depositors.

a higher interest rate than

A 15-year mortgage compared to a 30-year mortgage has all of the​ following, except

a lower appraisal fee.

A family of mutual funds is

a number of funds with different objectives operated by one investment company.

An ordinary annuity can be defined as

a series of equal payments received or paid at equal intervals of time at the end of each period.

The term ARM stands for

adjustable- rate mortgage.

The schedule that discloses the monthly payment that you will​ make, based on a specific mortgage​ amount, a fixed interest rate​ level, and maturity is called​ a(n)

amortization table.

APR means

annual percentage rate.

On a credit​ card, a finance charge is applied to

any balance not previously paid.

All of the following are true of Treasury​ securities, except they

are a means by which the U.S. government lends money.

If you have a car accident in which a person in the other car is​ injured, the type of insurance that would protect you from financial loss is

auto insurance.

By establishing high and unrealistic financial​ goals, you will probably

become discouraged and lose interest in planning.

Your home value is likely to be higher with all of the​ following, except

being in an area that has just been zoned for industrial use.

When buying a​ home, all of the following are factors one should​ consider, except

borrowing as much as the lender is willing to loan you since the mortgage interest is tax deductible and may result in a larger tax refund.

All of the following situations are valid reasons to borrow​ funds, except

borrowing for everyday living expenses.

In​ budgeting, it is useful to compare​ ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary.

both actual inflows and outflows

A​ ________ feature on a bond allows the issuer to buy back the bond from the investor before maturity.

call

Analyzing your expected income and expenses over the coming 6 months is

called budgeting and is worthwhile no matter your life stage.

If you were to receive​ $100,000 from a​ corporation, the most tax- efficient way to receive it would be as

capital gains.

Insurance agents who work for one particular company are called

captive agents.

If you do not budget for unexpected expenses in a given​ month, you will likely experience​ a(n)

cash shortage.

The security that represents equity or ownership of a corporation is

common stock.

The earning of interest on interest over time is called

compounding.

Bonds that may be exchanged for common stock when the stock reaches a specified price are called

convertible bonds.

Health insurance policies may provide coverage for all of the​ following, except

cosmetic surgery.

The​ ________ is the stated interest rate of the bond at the time it was issued.

coupon rate

The item that receives the most weight in the FICO credit scoring system is

credit payment history.

The cash flow statement reports a​ person's or​ family's

current income and payments.

Comprehensive coverage would cover financial losses due to

damage to your car caused by wind or hail.

Identity theft occurs when an individual​ obtains, without your​ permission, any of the following​ information, except your

date and place of birth.

Investors who buy and sell​ stock, sometimes in the same​ day, are called

day traders.

In making the purchase versus leasing​ decision, it is important to remember that

dealers may impose an additional mileage cost.

​A(n) ________ card allows you to pay for a purchase directly from your checking account without writing a check.

debit

If economic conditions​ deteriorate, stock prices are likely to

decrease.

Financial institutions that accept deposits​ (that are insured up to a maximum​ level) from individuals and provide loans are called

depository institutions.

The first step in the home-buying process should be to

determine a realistic price range of homes you can afford.

In the secondary​ market, stock prices are

determined by supply and demand.

You can reduce your risk by

diversifying your investments.

Going through documents discarded by your bank to obtain information in order to access your bank account is an example of

dumpster diving.

Dividends are a portion of

earnings returned to the investor.

People are more willing to purchase or increase their insurance coverage when

economic conditions are favorable and incomes are higher.

Computer systems that match up purchases and sales of stocks even at night when the other exchanges are closed are

electronic communication networks.

If you obtain an FHA or VA loan you will make additional payments each month to cover your home insurance and property taxes that will be placed in an account called​ a(n)

escrow account.

The term​ "liquid assets" refers to

financial assets that can be easily sold without a loss in value.

The means by which the U.S. government imposes taxes on individuals and corporations and by which it spends its money is called​ ________ policy.

fiscal

An account that allows employees to use pre-tax income to pay for medical expenses is a

flexible spending account.

People who execute stock trades for others at the NYSE are called

floor traders.

Lisa wants to know how much savings she would accumulate in 15 years if she saves​ $2,000 per year and her savings earns ​4% per year. She needs to determine the

future value of an annuity.

Unlike discount​ brokers, full-service brokers

give stock advice to their clients.

Making extra payments on a loan does all of the​ following, except

gives you extra income for living expenses.

The difference between an international and a global fund is

global funds invest in both U.S. firms and those of other countries whereas international funds focus on firms outside the United States.

As interest rates go​ up, bond prices

go down.

Taxable income equals

gross income less standard deduction.

All reportable income from any source is called

gross income.

Auto insurance rates are based upon all of the following except your

height and weight.

Credit scores in the 500- 600 range will likely result in

higher interest rates.

When interest rates​ rise, individuals who make deposits will earn a​ ________ rate of​ interest, while individuals who need to borrow funds will have to pay a​ ________ rate.

higher; higher

Property such as a​ person's home,​ car, and furniture are called

household assets.

To increase your​ savings,

income must be increased or expenses decreased.

The best way to reduce your​ homeowner's insurance premiums is to

increase deductibles.

The concept of the time value of money is based on

interest earned over time.

When making payments on a credit​ card, the amount paid is first applied to​ ________ and the remainder is applied to​ ________.

interest for the​ month; balance due

Goals with a time frame of between one and five years are classified as

intermediate term.

Corporate​ stocks, government or corporate​ bonds, or mutual​ funds, are called

investment assets.

Regarding automobile​ insurance,

it is better to compare costs before you commit to buying a particular car.

When purchasing a certificate of deposit​ (CD),

it is wise to shop around as rates vary among financial institutions.

You should claim itemized deductions if

itemized deductions exceed the standard deduction.

Another name for high-yield bonds is

junk bonds.

Auto insurance discounts might be given for all of the​ following, except

leather seats.

A​ ________ order is an order to execute a transaction to buy or sell a stock only if the price is within the range specified.

limit

The document that specifies the term of the loan as agreed to by the borrower and lender is called the

loan contract.

Student​ loans, auto​ loans, and housing loans are good examples of

long- term liabilities.

You are investing for your retirement 20 years hence. You would be most interested in a fund whose investment objective is focused on

long-term growth.

​Generally, stocks perform better when interest rates are

low.

In​ general, the more liquid an investment​ is, the​ ________ the return you will receive.

lower

Improper use of credit may

make it necessary to file for bankruptcy.

A​ ________ order is an order to execute a transaction to buy or sell a stock at its prevailing price.

market

Before you start to​ invest, you should ensure liquidity by owning

money market securities.

To determine how much home you can afford to​ purchase, you should not consider

money you might receive if you win a small lottery.

If you are considering trading in a used car when you purchase your new​ one, it is best to

negotiate the trade-in deal a separate transaction from the new car deal.

The difference between assets and liabilities is called

net worth.

Stock brokers typically do not recommend no-load funds because

no-load funds do not pay an upfront fee to the broker for selling them.

Private health insurance plans contain all of the following​ coverage, except

nursing home insurance.

Corporate bonds

offer a predictable return to investors in the form of interest or coupon payments.

Growth stocks tend to

offer great opportunities for capital appreciation.

The net asset value​ (NAV) is reported in financial newspapers and on financial Web sites

on a per-share basis by fund.

Mutual funds that sell shares directly to investors and repurchase shares investors want to sell are called​ ________ funds.

open-end

An arrangement that protects a customer who writes a check or uses a debit card for an amount that exceeds the checking account balance is called

overdraft protection.

Many individuals tend to​ ________ their cash inflows and​ ________ their outflows.

overestimate; underestimate

Legal methods of reducing your taxes include all of the​ following, except

overstating cash contributions to Salvation Army Christmas kettles.

The factor that will not reduce your insurance rate is

paying all speeding tickets promptly.

On a fixed rate​ mortgage, the monthly

payment remains constant and interest rate stays the same.

If your life follows the pattern of college-marriage-kids- ​retirement, your need for life insurance will

peak and then decline.

Whole life insurance is also referred to as

permanent insurance.

To cover valuable personal property not adequately covered by your​ homeowner's policy, you should take out​ a(n) ________ policy.

personal articles floater

Using e- mail messages that pretend to be from a legitimate source to obtain account information for the purpose of identity theft is referred to as

phishing

A disadvantage of using credit as a source of liquidity is the

potential cost of finance charges.

Risk management of money market investments involves all of the​ following, except

potential for default when backed by the federal government.

The process of obtaining​ ________ values is referred to as discounting.

present

The market for newly issued securities and initial public offerings​ (IPOs) is the​ ________ market.

primary

The​ ________ is the amount returned to the investor at the maturity date when the bond is due.

principal

​A(n) ________ is a document that provides financial information about a mutual​ fund, including expenses and past performance.

prospectus

The best way to ensure that you will receive dividends is to

purchase preferred stock.

Marginal tax rate is the

rate applied to your last dollar of taxable income.

A​ ________ is responsible for determining the value of the home as part of the loan process.

real estate appraiser

An expense that could be included in the itemized deductions of a taxpayer is

real estate property taxes.

A​ person's net worth would increase as a result of

reducing amounts owed to others.

Purchasing a car is a big decision.​ Therefore, you should not

rely on the dealer personnel as the best source of expert advice.

Independent insurance agents

represent many different insurance companies.

Bonds usually pay interest

semiannually.

If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone​ call, they are

shoulder surfing.

Identity thieves that obtain your information from the magnetic strip on your credit card are using a technique known as

skimming.

Regarding dividends paid on common​ stock,

some firms​ don't pay any dividends at all.

A​ company's annual report usually includes all of the​ following, except

testimonials from employees.

Life insurance premiums are based on all of the​ following, except

the age of your children when the policy is taken out.

When you place an order to buy or sell​ stock, you must specify all of the​ following, except

the commission you are willing to pay.

You are considering investing in a no-load mutual fund that focuses on growth stocks or in an index fund. The growth stock fund had a gross annual return of​ 15% and expenses of​ 2%. The index fund had a gross annual return of​ 12% and expenses of​ 1%. Assuming equal​ risk, you should buy

the growth fund.

The risk-return relationship means

the higher the​ risk, the higher the return.

All of the following are correct statements about​ credit, except

the interest is the total amount to be repaid.

All of the following are true regarding a cosigner on an​ account, except

the lender may not seize the assets of the cosigner.

The income in your budget is not affected by

the standard of living you experienced as a child.

Advantages of investing in mutual funds include all of the​ following, except

there is virtually no risk of loss.

A disadvantage of whole life policies is that

they are much more expensive than term policies.

All of the following may be a feature of a​ bond, except

they pay dividends.

Investors purchase corporate bonds because

they pay interest income.

A​ ________ symbol is used to identify a stock for trading purposes.

ticker

You are in an auto accident with someone who does not have insurance. You should do all of the​ following, except

try to settle the claim without involving the police or your insurance company.

One disadvantage of a flexible spending account is that

unused funds in the FSA over the amount of​ $500 cannot be rolled over into the next year.

Opportunity cost refers to

what you give up or forego as a result of making a decision.

Most home purchases are made initially

with a 10 to​ 20% down payment and a mortgage.

Making personal finance decisions enhances your employability because

you are managing yourself and showing initiative.

Life insurance would be necessary in all of the following​ situations, except

you are single and have no dependents.

The definition of disability can be defined as all of the​ following, except

you are unable to perform the duties of your job due to a work-related injury.

Regarding the amount of money borrowed on a​ loan, all of the following are​ true, except

you should borrow slightly more than you need to cover future inflation.

Refinancing a home is usually worthwhile when

you will live in your home long enough to recoup the closing costs.

Your checkbook balance at the end of May is​ $1,041.52. When you receive​ May's bank​ statement, you discover the following additional​ items: Bank​ fees, $27.00; Interest​ earned, $16.35. Your adjusted checkbook balance after considering these items is

​$1030.87.

What is the highest price paid for a share of Acarz stock in the last 52​ weeks?

​$11.14

Jane purchased General Motors stock for​ $20,000. Seven years​ later, in​ 2015, she sold the stock for​ $35,000. What is​ Jane's gain or​ loss?

​$15,000 long- term gain

If Jim wants​ $25,000 in five years and can earn an​ 8% interest​ rate, how much does he need to invest​ today?

​$17,025

If Joe has​ $5,600 today and invests it at a​ 10% interest​ rate, how much will he have in 12​ years?

​$17,572.80

You are considering the purchase of a​ 2,300 square foot house that is being offered for​ $238,500. After researching recent home sales in the​ area, you find three that are comparable. The first was a​ 2,500 square foot home that sold for​ $225,000, the second was a​ 2,200 square foot home that sold for​ $200,000 and the third was a​ 2,000 square foot home that sold for​ $178,000. Based on your​ analysis, what would be a reasonable offer on the​ house? (Round all computations to the nearest​ dollar.)

​$207,000

Deposits at commercial banks are insured up to​ ________ per depositor by the Federal Deposit Insurance Corporation​ (FDIC).

​$250,000

You obtain a loan of​ $3,000 based on simple interest with an annual interest rate of​ 12%. At the end of the first​ month, the interest owed on​ $3,000 is

​$30.

If you invest​ $12,000 today at an interest rate of​ 10%, how much will you have in 10​ years?

​$31,128

What is the semiannual interest payment on a​ $1,000 bond with a​ 7% coupon​ rate?

​$35

The state lottery has just informed you that you have won​ $1 million to be paid out in the amount of​ $50,000 per year for the next 20 years. With a discount rate of​ 12%, what is the present value of your​ winnings?

​$373,450

Kelly deposits​ $1,000 in her savings account earning​ 4% per year. How much interest would she earn in a​ year?

​$40

If your cash outflows are​ $600 and your cash inflows are​ $1,000, you can increase your net worth by

​$400.

Bill borrowed​ $3,600 and will be charged a simple interest rate of​ 18%. Bill will pay​ ________ interest for borrowing the money on April 1 and repaying the money on December 31.

​$486

Jim has​ $1,000 of salary and​ $100 of dividend income this month. This month he also has rent and utilities of​ $300 and he spent​ $200 on groceries and​ $100 on clothing. What is​ Jim's net cash flow this​ month?

​$500

Using the income​ method, if Jenny has an annual income of​ $50,000, debt of​ $20,000, and a factor of​ 10, then she should purchase​ ________ of life insurance.

​$500,000

Your home insurance provides for replacement value for personal property losses. Your china hutch was vandalized and completely destroyed. Your hutch cost​ $400 four years​ ago, but a new one will cost you​ $600. How much will the insurance company​ pay?

​$600

To save for her newborn​ son's college​ education, Kelli Peterson will invest​ $1,500 at the end of each year for the next 18 years. The interest rate she expects to earn on her investment is​ 9%. How much money will she have saved by the time her son turns​ 18?

​$61,952

Josh has decided to take a course at the local community college that could help him get a promotion at work. The course begins at 5 p.m. and goes until 9 p.m. on Monday nights. Josh normally works until 5 p.m. each​ day, but because of the drive time to the community​ college, he will need to leave work at 3 p.m. on class days. Josh currently earns​ $18.50 per hour. His employer contributes​ 10% of​ Josh's gross earnings to a​ 401(k) retirement plan. If the class meets 16​ times, what is​ Josh's total beforeminus tax opportunity cost for the​ class?

​$651.20

Greg and Kathy are considering purchasing a home requiring an​ $85,000 mortgage. The payment on a 30-year mortgage for this amount is​ $605. The payment for a 15-year mortgage is​ $752. What is the additional amount of interest paid on the 30-year ​mortgage?

​$82,440

The opening balance in your checking account was​ $1000. During the month you had the following​ activity: wrote checks for​ $45.00 and​ $75.00 but only the first one​ cleared; had debit card transactions for​ $50 and​ $35.20; received a bank charge for the account of​ $6, deposited a check you received from a friend for​ $100 but it did not clear by month end. What is your month end account​ balance?

​$863.80

Lucky Louie earned a salary of​ $100,000 this year and interest income of​ $3,000. Louie, was not so lucky in the stock market however and had capital losses of​ $3,000. What was Lucky​ Louie's taxable​ income, assuming Louie takes the standard​ $12,000 deduction?

​$88,000

Frank purchased his home in 1997 for​ $130,000. He added an addition costing​ $35,000. The current tax assessed value is​ $80,000 while the current market value is​ $185,000. If​ Frank's current mortgage balance is​ $95,000, his equity in his home is

​$90,000.

A​ $1,000 face value bond with a quoted price of 98 is selling for

​$980.

On the purchase of a​ home, one​ "point" is equal to

​1% of the amount being financed.

On the​ average, actively managed mutual funds have an expense ratio of about

​1.25%

Which of the following is not a​ good, short- term money market​ investment?

​AT&T common stock

The size of the monthly payment on a loan is dependent on all of the​ , except the

​borrower's age.

A​ ________ is a check that is written on behalf of a person to a specific payee and will be charged against a financial​ institution's account.

​cashier's check

When corporate taxes rates are​ ________, the after-tax earnings of corporations are​ ________, which means​ ________ money for shareholders.

​decreased; increased; more

The impact of credit​ ________ saving and​ ________ spending.

​decreases; increases

The use of credit may result in​ ________ spending and​ ________ debt.

​excessive; increased

Whole life insurance has a​ ________ premium and has​ ________ cash value build-up over the life of the policy.

​fixed; a

The more expensive the​ car, the​ ________ the​ payments, and the​ ________ you can put toward other investments.

​higher; less

A one- year CD has a​ ________ return and​ ________ liquidity than a checking account.

​higher; lower

Income stocks tend to pay​ ________ dividends and have​ ________ appreciation of stock prices.

​higher; lower

If your income exceeds the amount you​ spend, you should​ ________ your investments or​ ________ loans.

​increase; repay existing

Over the life of a​ mortgage, the payment to principal​ ________ and the portion to interest expense​ ________.

​increases; decreases

Historical credit problems remain on a credit​ bureau's report for​ ________ years while a bankruptcy remains for​ ________ years.

​seven; ten

A personal financial plan specifies financial goals and describes

​spending, financing, and investment plans.


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