Wise test review
Which investment would a person choose today if you believe interest rates will go up?
A short-term bond
a married couple wants to file for chapter 13 bankruptcy. which of the following MUST be true in order for them to qualify?
At least one of the individuals must be earning income when filling for chapter 13 bankruptcy
A person asks if checking accounts pay interest, What is the correct response?
Some checking accounts pay interest
what action can the Federal reserve system (Fed) take to stimulate the economy during rescission?
Lower sort-term rates
credit card companies are allowed to
Raise the APR automatically when the cardholder falls to make a payment on another card.
whitch of the following has the less liquidity?
Real estate
The government agency that regulates organizations That trade stocks and bonds is the
Securities and Exchange commission(SEC)
if a person receives a 3% salary raise and inflation is 5%, the real raise was
-2%
A person owns a corporate ten year bond with a face value of 1,000 paying 5% in annual interest. At maturity, the person can cash the bond for.
1,000 plus the last interest payment on the ten-year bond
a person buys a home for 300,000 the person makes a 100,000 down payment, at the time of purchase, and has a mortgage of 200,000, how much mortgage is for 200,000. how much mortgage insurance is advisable?
200,000 in case something happens in witch buyer can no longer repay the loan
a person who owned a 10,000 whole life insurance policy died, the cash value is 3,000, and the person browsed 2,000, how much money does the beneficiary of the policy get?
8,000
Why does a corporation issue bonds?
To raise money for expansion or other company operations
A person has 600,000 invested in stocks and bonds with a Securities and investor protection commission (SPIC) member brokerage firm that fails. how much of the person´s account is protected?
Up to 500,000 of the investors account
what is a fringe benefit?
a fringe benefit is an addition to salary and includes benefits such as vacation & Insurance
what time of investment is an example that is best protected from an increase in inflation?
a house financed with a fixed interest-rate mortgage
which of the following is an advantage of using a prepaid cash card?
a person can use the card for online purchases
checking account overdraft protection at a bank is an optional service that is
a short-term loan with high rate of interest
one major advantage of taking a 15-year mortgage, instead of a 30-year, mortgage.
allows the person to pay less interest, reducing the cost of the home
all of the following describe mutual funds except that they
are guaranteed to increase in value
A person can know there net worth by determining the dollar value of their
assets mins liabilities
U.S. currency has value primarily because it:
backed by full faith and credit of the government
when buying a home, the advantage of making a high down payment is the person will
borrow less money resulting in lower monthly payment on loan
A single person who is a recent collage graduate just got their first full time job, Generally, which of the following should be their first financial goal?
building an emergency savings account
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
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 company will
charge a late fee on the account
what is the difference between a blue chip stock and a growth stock a growth stock
generally pays little to no dividends
one service a stockbroker provides is
giving financial advice to investors
a car insurance company's assigned risk pool is likely to include a person who
had 5 speeding tickets in one year
A person is having financial problems. he has NOT paid his car loan in eight months. This person is in danger of
having his car repossessed
the federal trade commission(FED), can help stimulate the economy by
influencing a decrease in interest rates
how does having a savings account help a persons financial well-being?
it can help a person to achieve a financial goal
a driver of a car stopped to avoid an accident and skidded off the side and damaged the shrubs and someone's property. which coverage is needed?
liability
which statement explains how conditions can affect a persons ability to get a loan?
loans are difficult to get during inflation
when a person needs health care, she goes to her doctor. she is charged a co-pay. what type of health insurance does she have?
medicaid health insurance
which of the following is NOT taxable and does NOT need to be reported to the internal revenue service?
money received from an insurance policy
john has a store charged credit card that is different from most credit cards because it
must be paid in full each month
all of the following are examples of benefits exempt
opportunities for advancement. this is not a FRINGE benefit; a fringe benefit is an addition to the salary and includes benefits such as vacation & Insurance
when a person uses lay-away to perchance an item the person is
pay for the item over time, and receiving the item when paid in full
A person buying a home with a mortgage loan that has a variable interest rate will generally
pay more if the interest rates go up
a person can withdraw money without a penalty from a traditional individual Retirement Account (Traditional IRA) at any age if the person is
permanently disabled
before using credit card for cash advance, a person needs to know that the
rate of interest (ROI) depends on the amount of money borrowed
an example of an asset is
shares of corporate stock. an asset is something that is owned and has monetary value that can be sold or bought
contributing to a 401(k) plan is usually a good way to save for retirement because
some employers match the amount of money employees contribute to the plain
where sold you put your pin?
someone where were it cant get stolen or loss
what is the highest potential risk for investors?
speculative stock
a Cashiers check is a check
that is issued to the payee and guaranteed by the bank
cash value of a whole life insurance policy is
the savings portion of the policy
what is the definition of the Annual percentage rate? (APR)
the true cost of credit that must be disclosed on a loan agreement
U.S postal orders can be unreliable because
they may be counterfelt
A person owns 5,000 corporate bonds that mature in 10 years and pays 8% interest a year until maturity. after owning the bond for two years, the person notices that similar bonds sold by the same corporation are paying 5% interest to maturity. what will happen if the person decides to sell his bond earning 8% percent interest?
The bond would sell for a higher price than the bond paying 5%
a Change in interest rates is the result of influence of
The federal reserve system (FED)
why might someone decide to invest in a company´s bond rather than that company´s stock?
The person knows the amount of money that will be earned each year as interest on the bond
a person receives a credit card bill with a 250 minimum payment. The person mails a check for 300 on the due date. As a result, the credit card company will
accept the 300 and charge a late fee for receiving payment after the due date.
The cash value on a whole life insurance policy is the
accumulation of a portion of premiums paid plus interest earned
A person wants to start contributing to a Traditional individual Retirement Account (Traditional IRA). which of the following statements is true?
contributions to a Traditional IRA- cannot exceed the legal annual contribution allowed
a person bought a pickup truck with a loan. before completing all payments for the loan, he died. He had an insurance policy that covers the entire balance of his loan. what type of insurance did he have?
credit life insurance
the possibility that the borrower may fail to pay back the loan on time and will not be able to repay the loan is a
credit risk
a person used a credit card to purchase a big flat-screen TV, that she can pay for over five months, this person's future spending power is most likely
decreased because some of her future earnings must pay for the new television
dollar cost amount of a social security check received during retirement depends on a person´s
earnings over a lifetime of work
common stock is also known as
equities
A person who owns 10 shares of stock in a public corporation is entitled to
vote for board of directors and on company's business
A person would generally AVOID buying investment products if she
wants money to be liquid
in order for a will to be legal, a person can do all the following EXCEPT
work with a stockbroker or fanatical planner to create the will