FIN 300 Final Exam

The maximum that an individual can contribute to a Coverdell Education Savings Account each year is $3,000. $2,000. $5,000. $15,500. $1,000.

$2,000.

Information about a personal bankruptcy may be reported in your credit file for Permanently. 10 years. 3 years. 7 years. 1 year.

10 years

The rate used to calculate the tax due on the next dollar of income is referred to as the AMT. Income tax rate. Total tax rate. Marginal tax rate. Average tax rate.

Marginal tax rate.

Most tenants sign a lease. Which of the following is part of a lease agreement? The sale date. The amount of the down payment. The interest rate for a lease loan. The conditions under which the landlord may enter the apartment. The name and address of the buyer.

The conditions under which the landlord may enter the apartment.

Making financial decisions related to income involves all of the following except Sharing Spending Taking Saving All of these are financial decisions

Taking

If Brenda wants to pay her fair share of taxes, no more and no less, she should practice Tax maximization. Tax avoidance. Tax acceleration. Tax evasion. Tax elimination.

Tax avoidance.

Which of the following is a disadvantage of renting? Renters usually do not have to be concerned with maintenance and repairs. Tenants cannot take tax deductions for mortgage interest and property taxes. Renters have fewer responsibilities than home owners. Renting can be more convenient for those who move frequently. Taking possession of a rental unit is less expensive than buying a home.

Tenants cannot take tax deductions for mortgage interest and property taxes.

All of the following are consumer credit protection laws except The Consumer Credit Reporting Reform Act The Fair Credit Billing Act The Credit Lawsuit Act The Equal Credit Opportunity Act The Truth in Lending and Consumer Leasing Acts

The Credit Lawsuit Act

The consumer price index measures: The prices of goods and services in the United States None of the above The change in prices of goods and services around the world The average change in prices of goods and services of urban consumers The prices of goods and services in Bolivia

The average change in prices of goods and services of urban consumers

Tamra went to a restaurant and had an unpleasant experience that sent her to the hospital. The problems at the restaurant should be handled by Mediation. The county health department. Arbitration. A lawsuit. The doctor who treated her.

The county health department.

Kelly selected a home and submitted an offer to the seller. Her offer must have been for the asking price. Kelly will receive earnest money when she presents the offer. The seller must accept her offer. The seller may reject the offer and choose to provide a counteroffer. The seller's price is affected by Kelly's need to buy.

The seller may reject the offer and choose to provide a counteroffer.

Which of the following is NOT correct regarding real estate agents? They require that you conduct your own showings. They can provide advice on features of your home to highlight. They can suggest a selling price. They will make other agents aware of your home. They may screen potential buyers to determine if they will qualify for a mortgage for your home.

They require that you conduct your own showings.

Which of the following is NOT correct? Home ownership usually has long-term financial advantages. Renting offers mobility. Renting is usually less costly in the short run. Traditional financial guidelines suggest that your home should cost about five times your annual income. Lifestyle and financial factors should be analyzed to determine if you should rent or buy.

Traditional financial guidelines suggest that your home should cost about five times your annual income.

Madeline wants to purchase a larger house. However, she has not yet sold her current home. She may want to include a(n) ________ in her offer. counteroffer dual agent appraisal purchase agreement contingency clause

contingency clause

The difficulty of converting savings and investments to cash is referred to as ____________ risk. personal income liquidity interest-rate inflation

liquidity

A prearranged loan for a specified amount that a consumer can use by writing a special check is known as Single lump-sum credit. Closed-end credit. A revolving check credit. Installment sales credit. A bank credit card.

A revolving check credit.

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the AMT. Total tax rate. Income tax rate. Marginal tax rate. Average tax rate.

AMT

Recent tax credits include all of the following except the Savers credit. Foreign tax credit. AMT tax credit. Earned income credit. Adoption tax credit.

AMT tax credit.

A direct loan for personal purposes, home improvements, or vacation expenses is called A bank line of credit. A credit card. An installment cash credit. Single lump-sum credit. Open-end credit.

An installment cash credit.

A demand deposit is also known as A loan. A trust. A checking account. All of these are demand deposits. A savings account.

A checking account.

All of the following are fixed operating costs for a vehicle except Depreciation. License and registration. Interest on an auto loan. Insurance. Maintenance and repairs.

Maintenance and repairs.

A budget system that involves envelopes, folders, or containers to hold money or slips of paper is called a Written budget. Allocated budget. Physical budget. Digital budget. Mental budget.

Physical budget.

The Rule of 72 is: A tool to determine the number of years until retirement for an employee Used to calculate interest rates for savings Used to estimate how fast prices will double using a given annual inflation rate The legal code for requiring companies to provide a match on retirement savings The number of steps required to complete a financial plan

Used to estimate how fast prices will double using a given annual inflation rate

Ricky has a conventional mortgage. He can monitor the reduction of his loan balance through his payments by using _____ information. points escrow amortization PMI lock

amortization

The loss of a job or encountering an illness results in ____________ risk. interest-rate inflation personal income liquidity

income

Elaine purchased her living unit in a building with five other separate units. She purchased a Manufactured home. Townhouse. Duplex. Single-family dwelling. Prefabricated home.

townhouse

According to the Fair Credit Billing Act, if a creditor fails to follow the rules that apply to correcting any billing errors, you have the right to sue for Three times the actual damages. Actual damages. Actual damages plus twice the amount of any finance charges. Punitive damages Finance charges only

Actual damages plus twice the amount of any finance charges.

The stages in the family situation and financial needs of an adult is called the Budgeting procedure Financial planning process Personal economic cycle Tax planning process Adult life cycle

Adult life cycle

The major sections of Form 1040 include all of the following except Adjustments to income (AGI). Signature. Tax credits. All of these are major sections of Form 1040. Filing status and exemptions.

All of these are major sections of Form 1040.

Which of the following usually offers money market funds? A finance company A life insurance company A credit card company An investment company A payday loan company

An investment company

Ursula wants to have an interest rate that can increase or decrease during the life of her loan. She should look for a(n) FHA loan. ARM. Second mortgage VA loan. Negative amortization.

ARM

Which of the following is organized as a corporation with investors (stockholders) contributing the needed capital to operate? A rent-to-own center A check-cashing outlet A commercial bank A pawnshop A payday loan facility

A commercial bank

Which of the following offers a full range of financial services including checking, savings, lending, and other services? A pawnshop A commercial bank A check-cashing outlet A rent-to-own center A payday loan company

A commercial bank

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services? A home equity loan A credit card A debit card Closed-end credit A gift card

A debit card

Which of the following is NOT required when writing a check? A driver's license number The date written The amount of check written in words The name of person or organization receiving payment A signature

A driver's license number

If you are selling your house by owner, you should still enlist the assistance of Your brother-in-law to aid with legal issues of the sale. A lawyer or title company to assist with the contract, closing, and other legal matters. A real estate agent to help with the closing. A real estate agent to help with marketing efforts. All of these are correct.

A lawyer or title company to assist with the contract, closing, and other legal matters.

A drawback of a regular savings account is A minimum required deposit. All of these are drawbacks of a regular savings account. Not being insured. A low rate of return. A possible penalty for early withdrawal.

A low rate of return.

All of the following are non-deposit institutions except A finance company. A investment company. A credit card company. A payday loan company. A life insurance company.

A payday loan company.

When Nancy buys her house, the mortgage company will usually conduct a(n) Dual agent. Appraisal. Contingency clause. Earnest money. Purchase agreement.

Appraisal

The equation to calculate net worth is Cash inflows + Liabilities = Net worth. Cash inflows - Liabilities = Net worth. Assets - Cash outflows = Net worth. Assets - Liabilities = Net worth. Cash inflows - Cash outflows = Net worth.

Assets - Liabilities = Net worth.

Items with monetary value are referred to as Income. Variable expenses. Assets. Net worth. Liabilities.

Assets.

The tax based on the total tax due divided by taxable income is called the Total tax rate. Average tax rate. Marginal tax rate. AMT. Income tax rate.

Average tax rate

Another name for a statement of financial position is a Bank statement. Cash flow statement. Time value of money report. Balance sheet. Budget.

Balance sheet

The problem of bankruptcy is associated with overuse and misuse of credit in the ______________ component of financial planning. Obtaining Borrowing Savings Protecting Sharing

Borrowing

The difference between the amount budgeted and the actual amount received or spent is called the Cash inflow. Variable expense. Budget variance. Income. Cash outflow.

Budget variance.

The monthly budget showed that a family planned to spend $440 for food during March but only spent $380. This difference would be referred to as a: Fixed Living Expense. Budget variance. Budgeted Production. Deficit. Contribution to Net worth.

Budget variance.

Many people make mistakes when managing current cash needs. Which of these is NOT a frequently made mistake? Using savings or borrowing to pay for current expenses Budgeting spending Having insufficient liquid assets to pay current bills Overspending due to impulse buying and over using credit Failing to put unneeded funds in an investment plan

Budgeting spending

Jennifer is thinking about leasing a sports car. She will make monthly payments based on a money factor and the price of the vehicle, which is called the Residual value. Sticker price. Set price. Capitalized cost. Invoice price.

Capitalized cost

Which of the following is a form of housing in which the owners pay a monthly fee for maintenance of the common areas? Apartment Single-family dwelling Cooperative housing Condominium Manufactured home

Condominium

Paul and Lora built their home. When they researched contractors, they considered all of the following except Contractor's property tax payments during construction. Contractor's relationship with suppliers and carpenters. Contractor's reputation and experience. Time and payment schedules. Payment arrangements during construction.

Contractor's property tax payments during construction.

Money management refers to Preparing personal financial statements. Day-to-day financial activities. Storing financial records for easy access. Spending money on current living expenses. Trade-offs that occur with financial decisions.

Day-to-day financial activities.

Present value computations are also referred to as Simple interest. Discounting. An annuity. Future value. Compounding.

Discounting.

The money left over after paying for housing, food, and other necessities is called Take-home pay. Disposable income. Discretionary income. Monthly savings. Gross income.

Discretionary income.

If you want to file a complaint against a bank in connection with any of the consumer credit protection laws, you Must have at least $100,000 invested in the bank. Must have an account at the bank. Must get advice from the Federal Government Must have a loan outstanding at the bank. Do not need to have an account at the bank.

Do not need to have an account at the bank.

Which of the following is NOT a tax credit? Foreign tax credit Savers credit Domestic tax credit Earned income credit Adoption tax credit

Domestic tax credit

Opal is a real estate agent who represents the buyer as well as the seller. In some states, the buyers are required to sign a disclosure acknowledging that they are aware that Opal is working as a(n) Purchase agreement. Dual agent. Earnest money. Contingency clause. Appraisal.

Dual agent.

Pauline just submitted an offer on her dream home. As evidence of good faith , she also included a(n) Earnest money. Contingency clause. Appraisal. Counteroffer Dual agent.

Earnest money.

A tax imposed on the value of a person's property at the time of death is called a(n) Sales tax. Income tax. Real estate property tax. Estate tax. Excise tax.

Estate tax.

Quinn applied for a loan. He provided information about his finances and the home he plans to purchase. Results of the affordability mortgage calculation included all of the following except None of the above are correct. The monthly mortgage payment he can afford. Expected maintenance costs. The mortgage amount he can afford. The home purchase price he can afford.

Expected maintenance costs.

Most products come with some guarantee of quality. Which of the following is usually in written form, created by the seller or manufacturer, and has two forms? Express warranty "As-is" warranty Limited warranty Full warranty Implied warranty

Express warranty

Paul is looking for a low-interest, low-downpayment loan for his first home, but he is not a veteran.. He might be eligible for a(n) Payment cap. ARM. Negative amortization. FHA loan. VA loan.

FHA loan.

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments? Bills and Disputes Act of 1963 Fair Credit Billing Act of 1975 Fair Credit Reporting Act of 2009 Experian Act of 1982 Equifax Act of 1979

Fair Credit Billing Act of 1975

A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is a(n) Statement. Insurance prospectus. Financial plan. Investment forecast. Budget.

Financial plan.

Investments, insurance, and tax assistance are tools for financial planning and are also known as Loans. Financial services. Checking accounts. Trusts. Savings accounts.

Financial services.

Steve bought a laptop that was defective. This laptop will be fixed or replaced by the manufacturer as long as he returns it in a reasonable amount of time. What type of warranty does he have on his laptop? Express warranty "As-is" warranty Limited warranty Full warranty Implied warranty

Full warranty

If a person deposited $200 a month for 6 years earning 7 percent, this would involve what type of computation if you were trying to determine the value of the account at the end of the 6 years? Simple interest Present value of a series of deposits Present value of a single amount Future value of a single amount Future value of a series of deposits

Future value of a series of deposits

If you put $2,320 in a savings account and make no further deposits, what type of calculation would provide you with the value of the account in 28 years? Simple interest Present value of a series of deposits Future value of a series of deposits Present value of a single amount Future value of a single amount

Future value of a single amount

Franklin wants to sell his house himself. Which of the following is NOT correct about his sale? He should create a detailed information sheet and distribute it in stores and other public areas. He should show the house only when he is home alone. He should plan to spend time and effort in the sales process. He should provide information about the availability of financing and financing requirements. He should require potential buyers to provide names, addresses, telephone numbers, and background information.

He should show the house only when he is home alone.

Lonnie wanted to sell his house but didn't know what price to ask. He should consider all of the following except Current mortgage rates. Recent selling prices of comparable homes in the area. Demand in the housing market. His original cost. The appraised value of his home.

His original cost.

While Paul was shopping for a new chainsaw, he found a great deal on a new drill and bought it. This is an example of Compulsive shopping. Impulse shopping. Warranty shopping. Comparison shopping. Trade-off shopping.

Impulse shopping.

The time value of money refers to Personal opportunity costs such as time lost on an activity. Financial decisions that require borrowing funds from a financial institution. Changing demographic trends in our society. Increases in an amount of money as a result of interest earned. Changes in interest rates due to changes in the supply and demand for money in our economy.

Increases in an amount of money as a result of interest earned.

The inability to pay debts when they are due because liabilities far exceed the value of assets is called Cash flow. Liquid assets. Liabilities. Insolvency. Net worth.

Insolvency.

Which is NOT true about the Fair Credit Reporting Act? It places limits on who can obtain your credit report. It requires deletion of out-of-date information. It places limits on who can obtain a report. It regulates the use of credit reports. It gives borrowers the right to know why they are denied credit.

It gives borrowers the right to know why they are denied credit.

A personal balance sheet reports Amounts budgeted for spending. Income and expenses for a period of time. Items owned and amounts owed. Earnings on savings and investments. Family financial goals.

Items owned and amounts owed.

This provides the tenant protection from rent increases. Lessee Lease Rental statement Lessor Sublease

Lease

Adolph has a low income and cannot afford his own attorney. He needs legal assistance and should make use of (a) Mediator. Small claims court. Lawyer. Class action lawsuit. Legal aid society.

Legal aid society.

Karen bought a mixer. She received a warranty that covers only certain aspects of the product. If the product fails, she may be required to pay part of the costs for shipping or repairs. Which of the following warranties does she have? Implied warranty Full warranty Limited warranty Express warranty "As-is" warranty

Limited warranty

Which of the following refers to the opportunity to withdraw your money on short notice without incurring a loss in value? Minimum deposit Safety Rate of return Compounding Liquidity

Liquidity

A credit card is a type of Checking account. Trust. Savings account. Cash account. Loan/borrowing.

Loan/borrowing.

Discretionary income equals Gross income. Money left over after paying for housing, food, and other necessities. The amount being saved each month. Social Security taxes. Take-home pay.

Money left over after paying for housing, food, and other necessities.

Which of the following provides deposit insurance for credit unions? FDIC None of these SAIF FDCU NCUA

NCUA

Veronica has had a variable-rate mortgage for several years. Unfortunately, the monthly mortgage payments have not covered her interest owed. As a result, her home equity is decreasing because of ARM. FHA loan. VA loan. Buy-down. Negative amortization.

Negative amortization.

The lowest payment does not necessarily mean the best credit plan. If your car loan is a long period of time, you may end up owing more than the car is worth, which is called Loan preapproval. Low-interest loan. Negative equity. Low monthly payments. All of these are potential problems.

Negative equity.

Take-home pay is also called Discretionary income. Net pay. Deductions. Gross income. Monthly savings.

Net pay.

During the closing for a home purchase , you should Sign documents and pay half of the settlement costs. Order an appraisal. Review zoning laws for the municipality where the home is located. Schedule an inspection of the condition of the home. Pay all closing costs, settle last-minute details, and sign documents

Pay all closing costs, settle last-minute details, and sign documents

Yvette has a flexible-rate mortgage that limits the amount to which her monthly payments can rise. This feature is called a(n) Payment cap. FHA loan. Rate cap VA loan. Negative amortization.

Payment cap.

Which of the following are two personal financial statements that you create yourself? Bank statement and a balance sheet Tax returns Personal balance sheet and cash flow statement Checkbook and budget Budget and credit card statements

Personal balance sheet and cash flow statement

Credit files can include all of the following except Spouse's name, Social Security number, employer, and income. Employer, position, and income. Previous address. Checks returned for insufficient funds. Race or nationality.

Race or nationality.

Which of the following is an advantage of renting? Tenants cannot take tax deductions for mortgage interest and property taxes. Tenants may have restrictions regarding pets. Tenants may be subject to restrictions regarding remodeling .Noise from parties may be monitored closely. Renters have fewer responsibilities for maintenance than home owners.

Renters have fewer responsibilities for maintenance than home owners.

George has never bought a new car before. Which of the following techniques should he use to get the best deal? Research the dealer cost and begin negotiations from that point Tell the dealer the highest monthly payment he can afford Lowballing Leave a deposit to hold the vehicle Highballing

Research the dealer cost and begin negotiations from that point

A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is Open-end credit. A credit card. An installment cash credit. Single lump-sum credit. A bank line of credit.

Single lump-sum credit.

Major factors that affect the affordability of your mortgage include all of the following except Current mortgage rates. Income. Length of the loan. Size of the home. The amount available for a down payment.

Size of the home.

Which of the following is a type of electronic payment? Interest-earning checking account Certified check Money order Traveler's check Smart card

Smart card

Georgina and Henry have a family and are looking at houses. Which of the following is correct? They should complete all repair work themselves to increase costs.. Their first home should contain all the features desired. A "handyman's special" will be set at a higher price than one that is in good condition. The amount they can afford for housing will be primarily determined by the down payment. They should assess the school system in the area they want to live.

They should assess the school system in the area they want to live.

As a result of being an armed services veteran, Dan should be eligible for a(n) Negative amortization. Payment cap. ARM. FHA loan. VA loan.

VA loan.

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers. W-4 W-2 1099 Schedule A 1040

W-2

A budget system that can be kept on notebook paper or accounting paper is called a Physical budget. Written budget. Allocated budget. Digital budget. Mental budget.

Written budget.

The Truth in Savings Act requires financial institutions to disclose the _____ on savings accounts. compounding tax rate safety certification liquidity annual percentage yield (APY)

annual percentage yield (APY)