WIse Test Review
a person has a hospital bill of $10,500 this person's insurance has a $500 deductible and requires the insured policy holder to pay 20% of the balance of the bill in total with the deductible how much of this bill will the person have to pay
$2,500
a person buys a home $300,000 the person makes a down payment of $100,000 at the time of purchase and has a mortgage for $200,000 how much mortgage insurance is advisable
$200,000
a blank endorsement on the back of a check
Creates a check that can be cashed by anyone
which type of financial planner is most likely the least biased when giving advice
Fee-Only
Investors select "blue chip" stocks because they:
Have a reputation for quality management and sometimes pay dividends
how can a person using credit learn about consumer credit rights
Reading the truth in lending act
What is the face value of a bond?
The amount the bondholder receives when the bond matures
there is high risk for a stock to lose value when
The corporation that issued the stock declares bankruptcy
the advantage of mutual funds is that they are
a diversified investments portfolio managed professionally
an investor buys 100 shares of stock in XYZ Corporation at $5,00 a share This corporation has been a public company for more then ten years generally who gets the $500
a shareholder selling 100 shares at the market price
all the following are functions of the federal reserve system except to
advice on investment strategies
one major advantage of taking a 15 year mortgage instead of a 30 year mortgage is that 15 year mortgage
allows a person to pay less interest reducing the cost of the home
a person has a health insurance plan with a $50 co-pay this $50 payment is the
amount paid to the doctor at each visit
a person has a health insurance plan with a $50-copay this $50 payment is the
amount paid to the doctor at each visit
a persons health insurance policy requires her to pay the first $500 of medical costs each year before the insurance company will start to pay any of her medical bills this $500 requirement is called the
annual deductible
a person applying for a car loan a friend told him to compare the actual cost of one year car expressed as a percentage from three banks he needs to ask for
annual percentage rate (APR)
when stocks have high price/earning ratios it usually means that investors
anticipating higher growth in the future
Most payday loans
are extremely expensive
people are required to pay taxes on all the following forms of incomes except for
birthday gifts
a person bought $200 shares of general electric at $18 per share she sold them for $28 per share realizing a
capital gain of $2,000
sometimes a state or local government will tax products that can be hazardous to the health of consumers in order to
change the behavior of people
a person receives a credit card bill of $1,000 with a minimum payment due of $250 the person sends the company a check for $100 before the due date as a result the credit card company will
charge a late fee on the account
To get the lowest cost loan for an automobile, it would be wise to
compare interest rates from different lenders
before accepting cars dealer loan offer it would be wise to
compare the terms of the loan offered by a variety of the lenders
which of the following is not a role of the U.S Department of the treasury
controlling the economy
the possibility that a borrower will fail to repay a loan on time and will not be able to repay the loan is known as the
credit risk
a factor that effects the price of securities is
current events
a person bought a $50,000 life insurance policy the $50,000 amount of coverage is called the
death benefit or face value
the major difference between a credit and debit card is that
debit card charges are automatically withdrawn from a persons bank account
credit card companies are allowed to
decrease credit limits without giving advance notice
a person used a credit card to buy a large flat screen tv that she can pay for over 5 months this persons future spending power will is most likely
decreased because some of her future earnings must pay for the new tv
a persons paycheck is transferred electronically from her employers bank account into her checking account what is this serviece called
direct deposit
an example of an electronic funds transfer is a
direct deposit from a checking account
the phrase don't put all your eggs in one basket describes which of the following investments strategies
diversification
a person selling a computer says she will only accept a bank check this is a sound financial practice because a cashier or bank check is a
document guaranteed by the bank and as good as cash
a person invested $50 in a growth mutual fund each month for the past ten years this investment strategy is known as
dollar-cost averaging
a person sold her house and deposited the money from the sale into her saving account in doing so she has
earrings
the lowest health insurance premium is paid by a person who
exercises and is a nonsmoker
a person purchased a $50,000 term life insurance policy the $50,000 amount of coverage is called the
face value
the person who benefits the most from rising interest rates is someone who
has a fixed-rate mortgage
a responsibility of the securities and exchange commission (SEC) is to make sure that consumers
have information about investments
a responsibility of the securities and exchange commissions is to make sure that consumers
have information about investments
all of the following products help to create wealth except owning
health insurance
a person with a credit score under 600 is looking for a mortgage loan to purchase a home his interest rate on the mortgage will most likely be
higher than average
a lender recommends that george buy credit life insurance on his car loan which statement is true about life insurance
if george dies while hes paying the car loan the insurance company will pay off the loan
The National Credit Union Administration (NCUA) provides what
insurance protection for accounts in credit unions
which of the following is a strategy some of the following is a strategy some people use to increase net worth over time
investing in stocks bonds and property
an investments portfolio is a collection of
investments owned by an investor
the securities investor protection coporation does Not protect an investor when his investmants go down in value
it is part of the ups and downs asscoicated with the risk of investing
the largest percentage of funds in the bank depositor accounts after meeting the reserve requirement is used for
loans to consumers and businesses
what action can the federal reverse system take to stimulate economy during a recession
lower short-term interest rates
dianna has a minor accident with her car hitting another car although her insurance would have covered the costs of the repair she chooses not to report the accident in this situation what should dianna know
not reporting an accident that resulted in damage is a violation of the law
banks and credit unions may use money deposited in customer accounts to
offer different kinds of loans to customers
a person wants to get trading information about IBM stock where can she find out about what happened to the price of the IBM stock yesterday
on the internet
the total number of shares held by all shareholders in a company is called the
outstanding shares
the qualifications for becoming a certified financial planner (CFP) includes
passing 10 hour test and passing required courses
One advantage of buying bonds is that they
pay 100% of the face value when they are held to maturity
a person can withdraw money without a penalty from a traditional individual retirement account at any age if the person is
permanently disabled
a person pays $400 each year on her renters insurance policy the $400 is the
premium
one of the federal reserve system functions is to
promote stability of the financial system
when making a purchase with a debit card linked to a checking account it is important that the cardholder remember that
purchases are made with money from the persons account
a full time student who earned $2,650 last year had a total of $1,000 deducted from paychecks for social security federal state and local taxes because he paid to much in taxes this person can expect to
receive a tax refund if he files an income tax return this year
people who retired and are living on limited fixed incomes should
reduce their exposure to risk
a person has not made a mortgage payment for the past two years the current value of his house is 250,000 and his mortgage balance is 100,000 what is the bank likely to do
repossess the house to sell
to reduce risk the best thing to do before buying a particular investment is to
research the company and ask investment professionals about the company
a stock paying a high quarterly dividend would be most attractive to which of the following types of investors
retirees living on fixed income
the government agency that regulates organizations that trade stocks and bonds is the
securities and exchange commission
a person whose only income to pay family expenses is from his job dies unexpectedly he had no life insurance his wife and two children will likely
suffer from the loss of his income reducing their standard of living
discretionary income is defined as
surplus after budgeted expenses are paid.
when interest rates are low it is a good time to
take out a fixed rate car loan
what is the benefit of having a roth individual retirement account
taxes do not ever have to be paid when money is withdrawn
the only type of life insurance that does not develop a cash value is
term life insurance
what is the negative impact of canceling a credit card
the amount of available credit will be later
one difference between a personal check and a cashiers check is that
the amount of the cashiers check is guaranteed by the bank
one major disadvantage of payday loans is that
the fees and interest charged on these loans make payday loans among the most expensive loans
instead of keeping money under the mattress people prefer using a bank or credit union savings account all for the following reasons except
the interest earned is not taxable
which of the following statements is true
the more a person owes the less he is worth
what does the consumer need to consider when applying for a variable interest rate mortgage
the possibility of interest rates increasing in the future
what is a true statement about credit
the total cost of a purchase bought on credit is less when paid in 14 months instead of 24 months
some people invest in collectibles such as paintings and coins as a strategy to accumulate wealth because
their limited availability is likely to increase its value
what is one benefit of paying the total credit card bill on or before the due date
there will be no interest charged or late fee on the credit card bill next month
What is one of the roles of the SEC?
to protect the interest of investors
The best Advice a Person can give to a friend who is writing a check for the first time is to
use the checkbook register to keep a record of the check written
employees today are encouraged to be socially responsible by
volunteering time to worthy causes
A person's stage of life should influence the way that person makes financial decisions this means that a person
who is young usually can take more investment risk than a 70 year old
if a person pays her credit card bills late each month lenders can
write to the borrower about outstanding bills
