Chapters 13-19

Jennifer is trying to decide if she should invest in a municipal bond issued by the state of North Carolina that pays 6% or a corporate bond issued by Hess Corporation that pays 8%. Jennifer's current tax rate is 33%. What is the tax-equivalent yield for the North Carolina bond?

8.96%

David invested $18,000 in the American Funds Euro-Pacific Growth fund. This fund charges a sales charge of 6.22%. What is the dollar amount of the sales charge to purchase shares?

$1,119.60

Allie purchased a $1,000 Courtstreet bond that pays 6.3% annually. Six years later, new corporate bond issues with comparable quality are paying 4.6%. What is the approximate market value for Allie's bond?

$1,369.57

Crystal Ventures Mutual Fund contains stocks and securities valued at $476 million. The fund has liabilities that total to $6.3 million and the fund has issued 31 million shares. What is the Net Asset Value?

$15.15

Smith Corporation declared a quarterly dividend of $0.67 per share to stockholders. The record date is Friday, April 8th, the ex-dividend date is Wednesday, April 6th, and the payable date is Monday, May 9th for this dividend. If Samantha owns 250 shares of Smith stock on Friday, April 8th, what is her quarterly dividend amount?

$167.50

Lesley purchased 250 mutual fund shares at $18 per share. Lesley decided to sell her shares after the price increased to $29 per share. What is Lesley's capital gain?

$2,750

Taliyah invested $21,000 in the American Funds Euro-Pacific Growth fund. This fund charges a sales charge of 4.35%. What is the net amount available for investment?

$20,086.50

Jaylyn owns a $1,000 Exxon corporate bond that pays 5.7% annually. After signing the paperwork, Jaylyn realized that the bond pays interest semi-annually. What is the amount of Jaylyn's semi-annual interest payments?

$28.50

According to the video, what type of REIT represents approximately 3% of all REITs and is the least popular form of REITs?

hybrid REIT

Monitoring the ___________________ will tell an individual whether the investment is increasing or decreasing in value.

current values

According to the video, a common statistic often quoted is that real estate will increase, on average, about ___________ to ___________ percent each year over a long period of time.

2; 3

Kara wants to purchase a home for $300,000. In order to purchase her home, she obtains a $275,000 loan that will be repaid in 30 years and has a fixed interest rate of 5%. Assume that during year 4, the interest she pays totals $11,940 and property taxes paid are $6,000. Kara is in the 30% tax bracket. What is the reduction in the amount of taxes that Kara must pay to the federal government?

$5,382

Olivia currently has the money to purchase only 75 shares of Tumble Corporation. Tumble's shares are currently selling for $82 per share. If Olivia uses the current margin requirements to purchase 150 shares of Tumble stock, what is the amount of money that she personally has invested in the company?

$6,150

Haley currently owns a $1,000 bond with a fixed interest rate of 3%. The market interest rate is currently 5%. What is the approximate market value of her bond?

$600

Hannah purchased 65 shares of Best Buy stock at $36 per share. After 3 years, Hannah sold the stock for $43 per share. During the time she held the stock, Hannah received the dividends totaling $4.00 per share. What is Hannah's total return?

$715

Alan currently has the money to purchase only 125 shares of Hurricane Corporation. Hurricane's shares are currently selling for $34 per share. If Alan uses the current margin requirements to purchase 250 shares of Hurricane stock, what is the amount of the total investment?

$8,500

Nicholas initially invested $2,400 in a technology company. The company recently paid annual dividends of $22 and his year-end investment value was $2,000. What was the rate of return on his investment?

-15.75%

Nicholas initially invested $2,400 in a technology company two years ago. The total return when he sold the stock was $600. What was his annualized holding period return?

12.5%

Greg initially invested $7,000 in a transportation company. The company recently paid annual dividends of $86 and his year-end investment value was $8,340. What was the rate of return on his investment?

20.37%

In regards to when you can begin collecting benefits, what is the age in which your monthly benefit will be the highest?

70

Five years ago, Greg initially invested $7,000 in a transportation company. The total return when he sold the stock was $3,000. What was his annualized holding period return?

8.57%

According to the example in the video, what is located at the top of the Morningstar research report for the Vanguard 500 Index Fund?

All of the above are located at the top of the example in the video.

According to the example in the video, what are the two factors that cause almost all of the increase in dollar value?

Age & earning power of the time value of money

All of the following are jobs that the executor must perform, except:

Locate all relatives of the deceased, even if they are not listed in the will.

Level Four Investments include all of the following, except:

Low-Risk Investments

All of the following are true of capital gains distributions, except:

Capital gains distributions are commonly paid twice a year.

What is one additional way, according to the video, that an individual can utilize the information to decide if the stock is the right choice for their investment program?

Comparing the company's stock to other companies within the industry.

According to the video, what are the other fees that fund investors must consider in addition to a load charge?

Contingent Deferred Sales Load and Management Fee

All of the following are true of convertible corporate bonds, except:

Convertible bonds are backed only by the reputation of the issuing corporation.

According to the video, what is one of the most important decisions you can make regarding retirement?

The decision to begin saving and investing for retirement when you are young.

Which of the following are reasons discussed in the video of why planning for retirement is essential?

During your retirement years, prices for almost everything you want or need will increase due to inflation and When people retire, they can expect, on average, to live an additional 16 to 30 years after retirement.

All of the following are federal law requirements that REITS must meet before being sold to investors, except:

Engage in speculative, short-term holding of real estate to sell for quick profits.

Christian is looking to identify the type of will in which the main advantage is the elimination of future taxation of the exemption amount and any growth in the amount in the trust. Which type of will is Christian looking for?

Exemption Trust Will

Which of the following determine the prices for shares for closed-end funds?

Factors of supply and demand, Value of stocks and other investments contained in the fund's portfolio, and Investor expectations

All of the following are true of high-yield bonds, except:

High-yield bonds have a lower risk of default.

Calculating the rate of return allows you to determine:

If the investment is earning enough to meet or exceed your investment goals.

According to the video, all of the following are circumstances that it makes sense to begin collecting Social Security benefits early, except:

If you enjoy working and don't want to quit work.

According to the example in the video, what factors are located on the right side of the Morningstar research report for the Vanguard 500 Index Fund?

Information regarding Morningstar risk measures and Information about the investments of the fund in the "Style Map" section

According to the video, which of the following amounts can you deduct from your taxable income when you file your income tax return?

Interest payments and Property tax payments

According to the video, how long should it take to settle an estate?

It will depend on how complicated your estate is.

Zack is looking for a type of joint ownership in which each spouse owns 50% of the property and the property will automatically pass to your spouse at your death, and vice versa. This type of ownership may result in more taxes when your spouse dies. Which type of joint ownership is he looking for?

Joint Tenancy with Right of Survivorship

What are the major reasons why there may be a difference between what you think your property is worth and what someone is willing to pay you for your property?

Lack of buyers with the financial resources to buy real estate, High interest rates, and Economic recessions

What types of financial liability are discussed in the video?

Limited Liability and General Liability

All of these are considered characteristics of Treasury Notes, except:

Maturities for Treasury Notes can range from a few days to one year.

All of the following are true of mortgage bonds, except:

Mortgage bonds are less secure than other types of corporate bonds.

All of the following are disadvantages of real estate investments discussed in the video, except:

Real estate investments always have high interest rates.

What is the final thought and warning discussed at the end of the video?

Reverse mortgage agreements are complicated and you can lose your home and be forced to move.

Darla currently has a type of will that allows her to leave the balance in her estate to her children, other heirs, charitable organizations, or other beneficiaries. However, the major disadvantage with her will is that the amounts when the will was drafted may over time become obsolete. Which type of will does Darla currently have?

Stated Dollar Amount Will`

What are the risks associated with using the margin strategy?

Stock decreases in value, Margin calls, and Loan repayment and interest

All of these are considered characteristics of Treasury Bills or T-Bills, except:

T-Bills are sold in maximum units of $500.

Lindsay is looking for a type of joint ownership that is limited to married couples, in which both spouses own the property and property is automatically transferred to the other spouse when one dies. Which type of joint ownership is she looking for?

Tenants by the Entirety

According to the video, all of the following are requirements or suggestions for the individual that you list as your executor, except:

The executor must be related to the individual that constructed the will.

All of the following are true of municipal bonds, except:

The interest on municipal bonds is always subject to federal taxes.

All of the following are true of open-ended funds, except:

The major disadvantage of open-ended funds is the cost of buying and selling shares.

According to the video, all of the following are factors to consider before establishing a trust, except:

The profit you will receive from establishing a trust.

At the end of the video, what is the final point to remember about TSA's?

The taxes on a TSA are deferred.

If a bond has increased or decreased in value, one option for the bondholder is to keep the bond until maturity. What is the other option discussed in the video?

To sell the bond at its current price.

All of the following are disadvantages to consider of reverse mortgages, except:

You get cash from the equity in your home.

All of the following are advantages to consider when downsizing, except:

You will have to make adjustments if you move to a new neighborhood, city, state, or a foreign country.

According to the video, what is one of the most important advantages of a Tax Sheltered Annuity (TSA)?

Your savings and investments compound at a faster rate and provide you with a greater sum than if you had invested in a taxable account.

What is the name of the document that provides an estimate of how much you will receive monthly from Social Security when you retire based on your earnings, information about how much your wife and family would receive if you were to die, and information about Medicare?

benefits statement

All of the following are ways that investors can make money by investing in closed-end funds, exchange-traded funds, or open-end funds, except:

capital losses

Hammerhead Corporation declared a quarterly dividend of $0.84 per share to stockholders. The record date is Friday, March 11th, the ex-dividend date is Wednesday, March 9th, and the payable date is Monday, April 11th for this dividend. Chris purchased 50 shares on January 1st, Adam purchased 100 shares on March 8th, and Emma purchased 65 shares on March 10th. Who is eligible to receive this quarterly dividend?`

chris and adam

According to the video, _____________ ______________ is defined as any property that has been acquired by either spouse during the marriage.

community property

As you make your monthly payments to repay your loan, the amount for interest _______________ and the amount used to reduce the principal ______________.

decreases;increases

Charlie is looking to identify a type of trust that gives the surviving spouse the flexibility to shelter any wealth from estate taxes, but doesn't lock the survivor into a trust structure if the estate fails to grow as expected. Which type of trust is Charlie looking for?

disclaimer trust

According to the video, what should be on the left side of an investment value graph?

dollar amounts`

Which type of REIT is considered the most popular and accounts for about 90% of all REITS?

equity REIT

Which of the following is defined as the date when a stock trades "without dividend" and the seller is entitled to a declared dividend payment?

ex-dividend date

Which of the following is defined as a bond that is backed by the full faith, credit, and unlimited taxing power of the government that issued it?

general obligation bond

All of the following are advantages of real estate investments discussed in the video, except:

high rates of return

The principal or face value of Treasury Inflation-Protected Securities (TIPS) _____________ with inflation and interest payments ______________ with inflation.

increase; increase

All of the following are tabs that you can get more information from at the top of the report, except:

interest rates

According to the video, what should be placed near the middle of an investment value graph?

investment price

If market interest rates decrease from 7% to 6%, what happens to the value of a $1,000 bond with a fixed interest rate

it will increase

When the interest rate for comparable bonds is _________ than the interest rate for your bond, the approximate market value for your bond will ______________.

less; increase

A ____________ depreciation period _____________ the amount of depreciation that an investor can claim each year and _____________ the amount of tax the investor must pay each year.

longer; reduces; increases

Grace and Maddie both earn $26,000 a year. Maddie invests $2,500 in a Tax Sheltered Annuity (TSA). All other factors are the same between Grace and Maddie. Because Maddie used a TSA, she has _______ taxable income and ______ take-home pay.

lower;higher

Based on the example in the video, all of the following pieces of information can be found at the top portion of the Value Line report, except:

net profit

According to the video, it is especially important for an individual to have a will if they have all of the following, except:

pets

Based on the example in the video, all of the following pieces of information can be found in the middle section of the Value Line report, except:

safety rating

Although Level Two Investments are more speculative than Level One Investments, the primary goal is to choose investments that provide _____________ and ______________.

safety; income

Which types of companies (as discussed in the video) are considered growth investments?

technology companies

Sydney is looking to identify a type of trust that is established by the creator's will and becomes effective upon her death. This type of trust will be valuable to her because her beneficiaries are inexperienced in financial matters. Which type of trust is Sydney looking for?

testamentary trustq