Final Exam
Which of the following goals would be the easiest to implement and measure its accomplishment?
"Save $100 a month to create a $4,000 emergency fund."
A 32-ounce of package selling for $1.60 would have a unit price of:
$0.05 an ounce
Based on the following information, what amount would be SUBTRACTED from the BANK BALANCE side of a checking account reconciliation? Service charge $12, Outstanding checks $145, Interest $3.50, Deposit in transit $80
$145.00
Patricia McDonald has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000, and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long-term liabilities is $98,000. What is Patricia's net worth?
$162,000 (Total Assets - Total Liabilities = Net Worth)
The maturity dates for most bonds range between ____________ years.
1 to 30
A taxpayer with a taxable income of $47,856 and a total tax bill of $5,889 would have an average tax rate of ___ percent.
12.3% ($5,889/$47,856)
A family with $45,000 in assets and $22,000 of liabilities would have a net worth of:
23,000 (Assets - Liabilities = Net Worth)
Which FICO credit score would represent the least risky borrower?
825
Which of the following is an opportunity to contact several firms in a short time span? It is often held at local universities or convention centers.
A career fair
Which of the following is an example of a conventional mortgage?
A fixed-rate mortgage
Brad Johnson has a goal of "saving $50 a month for vacation." Brad's goal lacks:
A time frame
A budget deficit would result when a person's or family's:
Actual expenses are greater than planned expenses
Which of the following would be general competencies or skills that are commonly associated with successful people?
All of the above are competencies commonly associated with successful people
What is (are) the signal(s) of potential debt problems?
All of the above are danger signals
A type of deduction from adjusted gross income for yourself, your spouse, and any qualified dependents.
An exemption
Natural abilities that people possess are called:
Aptitudes
The first step of the career planning process is to:
Assess your interests, abilities, and goals
Which one of the following illustrates an insolvent situation?
Assets $40,000; liabilities $48,000
____________ provides coverage for the risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible.
Bodily injury liability
The debt payments-to-income ratio is:
Calculated by dividing monthly debt payments (not including house payments) by net monthly income
The borrower's financial ability to repay a loan is referred to as their _____________ in the 5 C's of credit (what creditors look for when extending credit).
Capacity
Which one of the following is defined as a commitment to a profession that required continued training and offers a clear path for occupational growth?
Career
Which method of payment is likely to be the least expensive in the long run?
Cash
Liquid assets refer to:
Cash and other items that are easily converted to cash
Mortgage loans, automobile loans, and installment loans for large purchases are examples of:
Closed-end credit
A valuable asset pledged to assure loan payments and subject to seizure upon default is called:
Collateral
Traditionally, the greatest variety of financial services is offered by:
Commercial Banks
Which of the following types of financial institutions provide Federal Deposit Insurance coverage?
Commercial banks, credit unions, and savings and loans
If you find that you cannot make your payments, the first thing you should do is:
Contact your creditors and try to work out a modified payment plan with them.
An important part of contract on a home that states that the purchase agreement is binding only if a certain event occurs is a(n):
Contingency clause
In recent years, membership in credit unions has:
Continued to increase
Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money. It also pays interest every 6 months until it matures. What investment is Audrey thinking about purchasing?
Corporate Bond
A tax _________ is an amount subtracted directly from the amount of taxes owned.
Credit
Liabilities are amounts representing:
Debts
Ned Turner has done some research and has found that the population in the U.S. is aging which means there will be an increased need for health care professionals in the future. This is an example of __________________ influencing jobs in the future.
Demographic trends
Which type of insurance provides for the partial replacement of income lost by employees as a result of an accident or illness?
Disability
If you want to improve credit score you should:
Do everything listed in the other answers
The following can all be a part of someone's monthly "mortgage payment" except:
Earnest money
Which one of the following is a disadvantage of using credit?
Ease of overspending
The study of how wealth is created and distributed:
Economics
The appraised value of your home is the:
Estimated current market value
Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill. This is referred to as tax:
Evasion
Which of the following is a credit bureau?
Experian
What is the purpose of a cover letter?
Express interest in a job
The information in your credit report is primarily used by the credit bureau to compute your
FICO credit score
Negligence refers to:
Failure to take ordinary and reasonable care
(T/F) It is advisable to put your Drivers License or Social Security number on your personal checks.
False
A limited warranty covers all aspects of the product and does not require the buyer to incur any of the costs for shipping and repairs.
False
Which of the following is not one of the places recommended for you to contact first if you are a victim of identity theft?
Federal Deposit Insurance Corporation
Individuals and families purchase life insurance primarily to:
Fill financial needs created by the loss of the breadwinner
The total dollar amount you pay to use credit is called the:
Finance charge
David Bowers must show a card from his automobile insurance company when he registers his car in the state of Oklahoma each year. Which of the following types of laws is the reason he must show this card each year?
Financial Responsibility Laws
Ed Bostrom wants to reduce his fixed expenses. What action would he consider in order to reduce his fixed expenses?
Find a place to live with a lower monthly rent
John Camey goes into a local department store and purchases a new suit. He pays $43 in taxes on this purchase. What type of tax is this most likely to be?
General Sales Tax
The main purpose of taxes is to:
Generate revenue for funding government programs
Which one of the following investments would provide the most predictable source of income?
Government Bonds
A plan that insures a large number of persons under the terms of a single policy without requiring medical examinations is called a(n) ____________ life insurance policy plan.
Group
Most employees pay federal income tax by:
Having amounts withheld from their paychecks
Susan Bize owns a home in Edmond, Oklahoma. She has a coffee maker in the home that has been recalled because it is likely to start fires. The coffee maker is an example of a:
Hazard
The affordability of which one of these is one of the most important issues of our time?
Health Care
Who has the greatest need for life insurance?
Households with small children
A debit card:
Immediately deducts the cost of your purchase from your bank account.
A cash flow statement reports a person's or a family's:
Income and cash outflows
The time value of money refers to:
Increases in an amount of money as a result of compounding interest.
John Gleason is interested in purchasing a 46" rear projection TV for his living room. He knows that right now the TV will cost approximately $1500. John is not sure he can afford this TV right now but is worried that if he waits, the cost of the TV will rise to as $1800. What type of risk is John worried about?
Inflation risk
Brett has hired a professional to assess the soundness of the roof, foundation, and building materials of a potential home he is considering. The professional will also be checking other aspects of the home including the plumbing, heating, and cooling systems. Brett is paying for a(an):
Inspection
Which statement is correct about whole life insurance?
It builds up cash value
A personal balance sheet presents:
Items owned and amounts owed
Which one of the following would be an example of a rating territory that helps determine insurance rates?
Kathy Smith lives in Guthrie, Oklahoma
Gary Simpson notices that his neighbor has a brand new Ford F150 truck parked in the driveway. Even though his current car is fine, Gary decides that he needs a new car and goes out and purchases a Hummer with a six-year loan. Which one of the answers best explains Gary's spending?
Keeping up with the Joneses
Tiffany Parrish has purchased a new car. Since then she has had to make six trips to the dealer in four weeks to fix several major problems without much luck. She knows that she is entitled to a refund. What type of law gives her the right to ask for a refund?
Lemon Law
A disadvantage of leasing an automobile would be the:
Limited mileage in the lease agreement
A type of income subject to taxation includes:
Lottery winnings, passive, investment, earned
Renting is more advantageous than buying a home when you are seeking:
Lower short-term living costs
The main responsibility of The Fed is to:
Maintain an adequate supply of money
An umbrella policy is designed to cover:
Major personal liability suits
The term networking refers to:
Making and using contacts to obtain and update career information
Which one of the following is a source of government health insurance?
Medicare
Which one of these investments pools the funds of many investors and hires and professional money manager to manage those funds?
Mutual Fund
The major service offered by investment companies is:
Mutual fund investing
Sloane owes $2,600 on her car loan. She looked up the value of her car according to Edmonds Used Car Prices, and her car is valued at $1,950. The term used to refer to this situation is:
Negative equity
The purpose of a counteroffer is to:
Negotiate the purchase price
A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would:
Owe $375 ($4,350 - $3,975)
Which is a correct statement about life insurance?
People are less apt to actively seek life insurance than health insurance.
Renter's insurance would include coverage:
Personal Property
Nick Rodr owns a home in Edmond, Oklahoma and pays $665 per year in insurance on the home. The $665 is an example of a:
Premium
The Consumer Credit Counseling Service is basically concerned with:
Preventing and solving the problems related to credit overextension
A cost associated with home buying would be:
Property Taxes
_____________ protects you-against financial loss when your car damages the property of other.
Property damage liability
Which one of the following statements correctly applies to term insurance?
Protection is for a specified period of time
Margaret Wilson has a piece of paper that she can mail in to the manufacturer of the product she just purchased that allows her to get part of her purchase price back. What is she most likely using?
Rebate
Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it. She thinks she would like to invest it in stocks because she knows that stocks have been earning about a 10% rate of return over the last several years. What aspect of investing interests Brenda?
Return
The financial planning process concludes with efforts to:
Review and revise your actions
Another name for open-end credit is:
Revolving Credit
The uncertainty associated with decision making is referred to as:
Risk
Which of the following is an example of opportunity cost?
Saving money instead of taking a vacation
The storage of funds for future use is the purpose of ____________ services.
Savings
Which one of the following investments offers the greatest liquidity?
Savings account
What is the most popular type of home ownership?
Single family dwelling
Starting a small business that may or may not succeed is an example of ___________ risk.
Speculative
Chris O'Donnell is thinking about investing in an investment that is high-risk in the hopes of earning a relatively large profit in a short amount of time. Which investment is he most likely considering?
Speculative stock
This month, Ken Grossman has cash inflows of $3,100 and cash outflows of $2,950, resulting in a
Surplus of $150 (Cash Inflow + Cash Outflow = Surplus)
(T/F) Credit is an arrangement to receive cash, goods, or services now and pay for them in the future.
TRUE
A securities exchange is a marketplace where member brokers who are representing investors meet to buy and sell securities.
TRUE
Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.
TRUE
The potential return of any investment should be directly related to the risk that the investor assumes.
TRUE
Which one of the following is an advantage of buying?
Tax deduction benefits
______ are expenses that a taxpayer is allowed to deduct from adjusted gross income.
Tax, or itemized deduction
Peril is defined as:
The cause of a possible loss
If there is incorrect information in your credit file:
The credit bureau must reinvestigate and modify or remove inaccurate data
Which one of the following is the best example of a personal opportunity cost associated with a consumer purchase?
Time spent comparing prices
(T/F) Changing careers can be more difficult than selecting your first career in some cases, because a possible opportunity cost associated with career advancement is the need to relocate your household.
True
(T/F) Credit unions frequently offer lower loan rates than other financial institutions.
True
(T/F) Effective networking means asking questions to get others to talk about themselves and their own experiences.
True
(T/F) John Maxwell said, "A budget is people telling their money where to go instead of wondering where it went."
True
(T/F) Using a "debit" card is basically the same as writing a check.
True
Good disability plans pay when you are:
Unable to work at your regular job
Impulse buying refers to:
Unplanned purchasing
Brad Hayden has a piece of paper that guarantees the conditions, under which he can return, replace, or repair an item that he has purchased. What is it he most likely has?
Warranty
What type of warranty indicates that the seller has the right to sell a product?
Warranty of title
Opportunity cost refers to:
What a person gives up by making a choice
If you cosign a loan:
You will be required to pay the loan in full if the borrower defaults on the payments