W!SE Final
When Lucy was born, her grandparents gave her a Series EE savings bond that will be worth $1,000 at maturity. Her grandparents paid:
$500 for the bond.
You have a checking account balance of $100 and you deposit a personal $200 check from your brother in your checking account. When will you be able to withdraw $150 in cash?
3 to 7 days later, depending on your bank's check clearance policy.
An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split
80 shares of the stock and the price of each share is $40.
Predatory lending practices do not include which of the following:
A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions.
What is a credit score?
A number used to determine how much credit to extend to a person.
Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:
A savings plan.
A type of electronic funds transfer (EFT) is:
An ATM transaction.
The activity of the New York Stock Exchange most closely resembles:
An auction house.
Mutual funds are:
An investment that holds a wide range of different investment instruments, providing diversification.
How can you avoid becoming a victim of identity theft?
Avoid giving your Social Security number on a phone call you did not initiate.
When a corporation or government agency borrows money from an investor and pays interest and principal to that same investor, it is a:
Bond.
Carmen sold her stock in ABC company for a higher price per share than she bought it for. She realized a:
Capital gain.
David bought stock for $4,000 and one year later he sold it for $1,000. The sale resulted in a:
Capital loss.
Which financial product typically pays the highest rate of interest
Certificate of deposit.
Most Consumer Credit Counseling Services (CCCS):
Charge a fee for setting up and administering a debt repayment plan.
Erika and Mark received an inheritance of $100,000. They plan to invest their inheritance money to buy a house in six years. Which of the following carries the greatest risk?
Common stocks.
Robyn is an investor. Which financial product makes her a shareholder in a corporation?
Common stocks.
A factor that is likely to affect the market price of a stock is:
Corporate profits.
A blank endorsement on a check:
Creates a check that can be cashed by anyone.
The National Credit Union Administration (NCUA) insures accounts in:
Credit unions.
The price of a security may be affected by:
Current events.
Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the:
Death benefit or face value.
Consumer Credit Counseling Services (CCCS) offer:
Debt repayment plans.
A Dante Oil Corporation tanker collided with another ship causing a major oil spill that will destroy the environment in the area for years and will cost billions for cleanup. The price of Dante is likely to:
Decrease.
A Neon Oil Corporation tanker spilled oil in the ocean around Australia. As a result of this accident, the share price of this stock is likely to:
Decrease.
George received a dividend from the company in which he is a stockholder. A dividend is:
Distribution of part of the company's profit.
Shares of stock are also known as:
Equities.
New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the:
Federal Reserve System.
Travelers checks, often used for vacations:
Function as cash and are easily replaced if lost.
Identify the background color of a U.S. $5.00 bill.
Green.
Investors select "blue chip" stocks because they:
Have a reputation for quality management and sometimes pay dividends.
Publicly held corporations
Have shares of stock that are held by public (outside) investors.
Which of the following provides an increase in assets or wealth?
Having capital gains.
Maxine has an auto loan that she has to pay. She will make monthly payments over five years. She has a(an):
Installment loan.
A cash card generally:
Is purchased with a specific amount of money that can be used to pay for goods or services.
If a business wants to raise capital but not create debt, it can:
Issue common stock.
Municipal bonds are:
Issued by local governments to raise money for roads, bridges and other construction projects.
Who uses consumer credit reports in making decisions?
Lenders.
When John bought a Microsoft bond, he was:
Lending money to Microsoft.
Sara has invested in corporate bonds which are:
Loans to the issuer of the bond.
When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance?
Managed care health plan.
Which documents should be stored in a safe-deposit box?
Mortgage loan papers.
When an investment company raises money from investors and invests the money in stocks, bonds, or other securities, the investment instrument is called a:
Mutual fund.
What is the largest equities market in the world?
New York Stock Exchange (NYSE)
Susan gives Marie her ABC Credit Union debit card and personal identification number (PIN) so Marie could get $25 from Susan's bank account. Marie withdrew $100 instead of the agreed to $25. How can Susan get the $75 back?
No bank or government agency is obligated to reimburse Susan because she authorized Marie to use her ATM card and PIN.
Matt's wallet, with all his credit cards, was stolen. He needs to:
Notify each credit card company immediately.
Ellen, Barbara, and Paul all charged $1,000 on their credit cards last year. Who paid the most in finance charges?
Paul, who only pays the minimum amount each month.
Which of the following lenders charge the highest interest rate?
Pawn shop.
The price of the Candy Corporation stock will generally increase when there is:
Positive news about corporate earnings.
Which of the following best describes diversification?
Reducing risk by investing in different types of securities.
Richard's auto insurance policy expired on 5/15/2002. Richard was upset with his insurance agent and decided to change insurance companies. At 10:00 a.m. on 5/16/2002, as he drove to a different agent to buy a new policy, he had an accident. Who is liable for damage to his car and his personal injuries?
Richard.
The primary sources of income for most people between the ages of 20 and 35 who are not living on a pension or social security are:
Salaries, wages, and tips.
The process of setting aside money and putting it to work by having it earn interest or dividends or gain value in the equities market with the idea of having additional funds to use in the future is described as:
Saving and investing.
Frankie's savings account has earned a lot of interest. He wants to know if he must pay taxes on the interest earned. What would the IRS tell him?
Savings account interest is taxable.
Matthew and Alicia just had a baby. They received money as baby gifts and want to put it away for the baby's college tuition. Which of the following has the lowest potential growth rate over the next 18 years?
Savings accounts
Financial services and products generally offered by banks and credit unions include:
Savings and loans.
A pharmacy is to drugs as the American Stock Exchange is to:
Securities
A government report indicated that the use of Pax's aspirin-free painkiller resulted in 100 cases of stomach poisoning. A large number of Pax's stockholders are likely to:
Sell shares causing the price of the stock to increase.
Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?
Series EE savings bond.
Consumer finance companies, which are often advertised on TV, are also known as:
Small loan companies.
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:
The Securities and Exchange Commission (SEC)
When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be
The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties.
A credit card finance charge is:
The dollar amount it cost to use credit.
Why is term life insurance usually the least expensive type of life insurance?
The policy only pays a death benefit.
Which of the following is your right as a shareholder of common stock?
The right to receive dividends if paid.
Why does a corporation issue bonds?
To raise money for expansion or other company operations.
What is the chief reason corporations issue stock?
To raise money for the corporation.
Which of the following investment products is guaranteed by the federal government?
U.S. Treasury notes.
Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments?
Uninsured or no-fault motorist coverage.
Jami lost her debit card. She did not report it missing for 3 months. If an unauthorized person used her debit card, her maximum liability is:
Unlimited liability.
If you have a managed health care plan, it means that you:
Usually must first meet with your primary health care physician.
Jennie owns Disney shares and cannot attend the annual stockholder meeting. She can:
Vote by mail or online through a proxy.
A high school student has begun to investigate the field of finance as a career choice. In deciding about the field, the student should focus on which question first?
Will I find a balance between financial rewards and personal satisfaction from work?
Buying a treasury bill (T-bill) is best for investors who are looking for
a secure, low risk investment.
Using a brokerage firm, a qualified investor buys 1000 shares of common stock at $50 a share on 50% margin. This means that the
brokerage firm is lending the investor 50% of the money.
The interest earned on United States Series EE Savings Bonds is
exempt from state and local taxes.
When John bought a Microsoft bond, he was:
lending money to Microsoft.
A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying
more of the same stock.
As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower than expected if the
one of the apartments is not rented.
A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his cancelled checks returned. The teenager should be aware that the reason cancelled checks are NOT returned is to
save the bank money associated with returning copies of these checks.
After five years of owning a Roth Individual Retirement Account (IRA), a person wants to buy his first home, the person can withdraw money from the Roth IRA
tax and penalty free.
When is there high risk for a stock to become worthless?
the business that issued the stock is about to declare bankruptcy.
A company offers a defined-contribution pension plan which means that upon retirement the employee will receive
the total amount of money contributed plus investment earnings.
