personal finance final
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.
