Money Matters: Semester 2 Exam (Ch. 12-24) - Even
Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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Ch. 20 Retirement and Estate
Planning
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1.
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The amount for which you could sell your home now is its
a. | appraised value | c. | current market value | b. | true value | d. | assessed value |
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2.
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Many financial advisers suggest that you will need between __________ percent of
your preretirement income to live comfortably
a. | 75 and 85 | c. | 95 and 100 | b. | 50 and 60 | d. | 60 and 75 |
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3.
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A will written in a person’s own handwriting is called a
a. | trust will. | c. | simple will. | b. | codicil | d. | holographic
will |
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4.
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A tax-deferred retirement plan available to small businesses is a
a. | Simplified Employee Pension (SEP) plan | b. | defined-benefit plan | c. | money market
plan | d. | Keogh plan |
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5.
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A legal document authorizing someone to act on your behalf is called a
a. | codicil. | c. | power of attorney | b. | joint tenancy agreement | d. | inter vivos |
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6.
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Social Security replaces about ____ percent of an average wage earner's
income after retiring.
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Ch 22: Property and Liability
Insurance
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7.
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The cost of replacing an item regardless of its actual cash value is
called
a. | replacement value. | c. | the deductible | b. | exclusionary costs | d. | opportunity
cost |
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8.
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The most complete homeowners insurance policy coverage is called
a. | special form | c. | basic | b. | broad form | d. | comprehensive |
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9.
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Which of these people would be considered an uninvited guest on your
property?
a. | a burglar who breaks into your house to rob it | b. | a plumber who comes
to fix a leaking faucet in your bathroom | c. | your brother, who you’ve asked to come
watch the ballgame with you | d. | the letter carrier who delivers your
mail |
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10.
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Automobile insurance premiums are based on a number of different factors. Which
of the following would NOT be one of those factors?
a. | age of the driver | c. | occupation of the driver | b. | location of the
driver | d. | model of the
car |
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11.
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Which of the following items would NOT be covered by most homeowners insurance
policies?
a. | a car stereo | c. | kitchen appliances | b. | living room furniture | d. | all of the above would be
covered |
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12.
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Which type of auto insurance protects your own car against damage from auto
accidents?
a. | collision | c. | personal injury protection | b. | liability | d. | comprehensive |
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13.
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This type of risk includes the cost of another person’s losses for
injuries at your property.
a. | liability | c. | hazards | b. | perils | d. | crimes |
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Ch. 14: Buying & Owning a
Vehicle
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14.
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Which of the following vehicles would most likely have the highest insurance
rate?
a. | new sports car | c. | four-door family sedan | b. | fuel-efficient
compact car | d. | used
mini-van |
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15.
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Monthly car payments should be no more than _____ percent of the money you have
left after paying all of your other expenses.
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16.
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Typically, you should expect to change the oil in your vehicle every three
months or every _____ miles, whichever comes first.
a. | 10,000 to 15,000 | c. | 3,000 to 5,000 | b. | 20,000 to 30,000 | d. | 7,000 to 10,000 |
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17.
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All of the following websites allow you to search for specific models of new and
used cars available in your area except
a. | Kelley Blue Book | c. | Auto Trader | b. | Cars.com | d. | Consumer
Reports |
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18.
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In most cases, the most important factor in determining a car’s resale or
trade-in value is
a. | the vehicle’s fuel efficiency. | c. | mechanical
condition. | b. | the vehicle’s age. | d. | model popularity. |
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Ch 18. Investing In Bonds
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19.
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Which of the following types of bonds cannot be purchased through
TreasuryDirect?
a. | Series I savings bonds | c. | Treasury securities | b. | Series EE savings bonds | d. | corporate bonds |
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20.
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A type of corporate bond based on the general creditworthiness of the company is
called a(n)
a. | secured bond | c. | annuity | b. | mortgage bond. | d. | debenture |
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21.
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The amount a bondholder will be paid at maturity is called
a. | face value | c. | market value. | b. | dividend. | d. | yield. |
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22.
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When bonds sell for more than their face value, they are selling at a
a. | capital gain | c. | premium | b. | discount | d. | cut rate. |
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23.
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Corporations usually agree not to call bonds for the first ___ years after
issuance.
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24.
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When a bond issuer cannot meet the interest and/or principal payments, what has
occurred?
a. | bond default | c. | hedging | b. | bond redemption | d. | short selling |
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Ch. 12 - Renting a Residence
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25.
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In a typical roommate arrangement, all of the following expenses would be shared
equally by all of the roommates except
a. | laundry services | c. | rent. | b. | utilities. | d. | cable TV. |
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26.
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An on-campus building that contains many small rooms that are rented out to
students is called a
a. | duplex. | c. | condominium. | b. | hostel. | d. | dormitory. |
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27.
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Many utility companies charge new customers a(n)
a. | one time nonrefundable fee | c. | installation
surcharge. | b. | refundable security deposit. | d. | none of the
above. |
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28.
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Which of the following would generally be considered an advantage of renting as
compared to owning a home?
a. | tax benefits | c. | more privacy | b. | fewer responsibilities | d. | less noise |
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29.
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The monthly charge you pay to live in an apartment is called
a. | a security deposit. | c. | rent. | b. | a lease. | d. | a mortgage. |
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30.
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Which of the following is probably NOT a question you need to ask of a
prospective roommate?
a. | Are you a smoker? | c. | Do you have a job? | b. | When is your birthday? | d. | What do you like to do for
fun? |
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31.
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Which of the following is an obligation of the lessor?
a. | give at least 30-days’ notice of intent to move | b. | provide a dwelling
that is habitable | c. | pay the rent on or before the due
date | d. | all of the above are obligations of the lessor |
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32.
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Which of the following consists of four bedrooms connected to a single kitchen
and living room that is shared by the occupants?
a. | townhouse | c. | studio | b. | quad | d. | condo |
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Ch 24 - Role of Consumers in a Market
Economy
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33.
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An electronics store advertises a television for $150 just to get customers into
the store; salespeople then try to get customers to buy a much more expensive model. This is an
example of
a. | bait and switch | c. | deceptive pricing | b. | a “fake sale.” | d. | low-balling |
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34.
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Collectively, the production of goods and services in the U.S. economy is
directed by
a. | producers and suppliers | c. | advertising and marketing
strategies | b. | consumer buying decisions | d. | the government |
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35.
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Which of the following would be considered a hands-on economic system?
a. | communism | c. | mixed economy | b. | libertarianism | d. | laissez-faire |
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36.
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The price at which the quantity supplied equals the quantity demanded of the
product is the
a. | price floor | c. | breakeven price | b. | equilibrium price | d. | market price |
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37.
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A minimum wage law is an example of a
a. | price fix | c. | price ceiling | b. | price floor | d. | transfer
payment |
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38.
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The American airline industry is an example of
a. | an oligarchy | c. | a monopoly | b. | pure competition | d. | an oligopoly |
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39.
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The safest way to shop on the Internet is by using a credit card or __________
on a secure site.
a. | a prepaid gift card | c. | cash | b. | a check | d. | a debit card |
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40.
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A fraudulent investment operation in which money collected from new investors is
used to pay off earlier investors is a
a. | Ponzi scheme | c. | phishing scam | b. | pyramid scheme | d. | pigeon drop |
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Ch. 17 - Investing in Stocks
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41.
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Current Profit on Stock ÷ Purchase Price + Commission =
a. | Earnings per Share | c. | Net Yield | b. | Interest Rate | d. | Return on
Investment |
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42.
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The price of a share of stock divided by the corporation’s earnings over
the past 12 months is the
a. | earnings per share | c. | percent yield | b. | ROI | d. | P/E ratio |
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43.
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An increase in the value of a stock over time is called a(n)
a. | capital gain | c. | dividend | b. | yield | d. | investment |
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44.
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Which of the following would be considered an odd lot of stocks?
a. | 50 shares | c. | 200 shares | b. | 1,000 shares | d. | 100 shares |
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45.
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Stocks in young, often small corporations that have higher overall risk than
stocks of successful, long-established companies are called
a. | emerging stocks | c. | growth stocks | b. | blue chip stocks | d. | defensive
stocks |
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Ch 19 - Mutual Funds, Real Estate, and Other
Choices
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46.
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A building with two separate living quarters is called a
a. | duplex | c. | condo | b. | quad | d. | triplex |
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47.
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Which of the following tells you the market price for a share of a mutual
fund?
a. | par value | c. | market value | b. | face value | d. | net asset value |
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48.
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Advantages of investing in mutual funds include all of the following
except
a. | diversification | c. | liquidity | b. | professional management | d. | a guaranteed rate of
return |
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49.
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Farm products (such as wheat, corn, and cattle) and metals (such as gold and
silver) are called
a. | collectibles | c. | commodities | b. | futures | d. | options |
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50.
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Which of the following is a sales charge paid when you sell an
investment?
a. | capital gain | c. | back-end load | b. | dividend | d. | front-end load |
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51.
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A professionally managed group of investments bought using a pool of money from
many investors is called a
a. | Ponzi scheme | c. | mutual fund | b. | savings bond | d. | passbook
account |
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52.
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Which of the following is the most risky investment?
a. | income fund | c. | growth and income fund | b. | money market
fund | d. | growth
fund |
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Ch 13. Buying a Home pp.
297-313
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53.
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A fund where money is held to pay amounts that will come due during the
year—such as property taxes and property insurance—is called a(n)
a. | money market account. | c. | mortgage. | b. | escrow account. | d. | trust deed. |
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54.
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Legally established ownership of property is a
a. | title. | c. | lien, | b. | deed. | d. | tenancy
agreement. |
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55.
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Mortgage lenders usually offer lower interest rates in exchange for higher
discount points. Whether or not this is a good deal depends mostly on
a. | how long you plan to keep your house. | b. | the amount of your down
payment. | c. | the sales price of the house. | d. | the amount of equity you have in the
house. |
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56.
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For purposes of computing property taxes owed against your home, the city or
county in which you live sets a(n) _____ value on the property.
a. | appraised | c. | market | b. | estimated | d. | assessed |
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57.
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A serious intent to be bound to an agreement is a(n)
a. | offer. | c. | proposal. | b. | contingency. | d. | acceptance. |
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Ch 21: Introduction to Risk
Management
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58.
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Buying insurance is an example of
a. | risk avoidance | c. | risk shifting | b. | risk assumption | d. | risk reduction |
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59.
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A condition that creates or increases the likelihood of some loss is called
a
a. | probability | c. | peril | b. | proof of loss | d. | hazard |
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60.
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Understanding the types of risk you will face and their potential consequences
is called
a. | risk administration | c. | risk management | b. | risk assessment | d. | risk analysis |
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61.
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All of the following types of insurance protect against personal risk
except
a. | life insurance | c. | health insurance | b. | disability insurance | d. | property
insurance |
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62.
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Under an insurance policy, the insurer agrees to assume an identified risk when
the policyholder pays a fee called the
a. | premium | c. | exclusion | b. | claim | d. | benefit |
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63.
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Which of the following techniques is not recommended for a serious
risk?
a. | avoid the risk | c. | reduce the risk | b. | shift the risk | d. | assume the risk |
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64.
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In which period of the business cycle has the economy hit the bottom?
a. | peak | c. | trough | b. | recession | d. | recovery |
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Ch 15 Family Decisions
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65.
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An advance commitment to receive a service at a specified later date is
a(n)
a. | reservation | c. | itinerary | b. | contract | d. | agenda |
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66.
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Money paid by one former spouse to support the other is called
a. | child support | c. | property settlement | b. | the dissolution fee | d. | alimony |
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67.
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Which of the following wedding expenses would most likely be paid by the
groom?
a. | cleric’s or judge’s fee | c. | the bride’s
ring | b. | the marriage license | d. | all of the above |
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68.
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The final statement of a dissolution decision is called a
a. | support statement | c. | divorce decree | b. | Petition for Dissolution of
Marriage | d. | property
settlement |
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69.
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Guests as well as the wedding party would be expected to wear long gowns and
tuxedos at a(n)
a. | semiformal wedding | c. | destination wedding | b. | formal wedding | d. | informal
wedding |
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Ch. 23 Health and Life
Insurance
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70.
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Which of the following is NOT a requirement under the Affordable Care
Act?
a. | All covered medical services must be provided without co-pays. | b. | Health plans cannot
limit or deny benefits due to a preexisting condition. | c. | Patients can choose their own primary care
doctors. | d. | Health plans cannot place a limit on lifetime
benefits. |
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71.
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This law allows people who leave employment to continue their health insurance
under the company plan for a limited period of time.
a. | COBRA | c. | HIPPA | b. | Medicaid | d. | Medicare |
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72.
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The savings accumulated in a permanent life insurance policy that you would
receive if you canceled your policy is called
a. | face value | c. | cash value | b. | par value | d. | premium value |
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73.
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Government-sponsored health insurance for people with low incomes is
called
a. | Medicare. | c. | a managed care plan | b. | a fee-for-service plan | d. | Medicaid |
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74.
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The maximum duration of benefits under most disability policies is until
a. | age 65 | c. | age 50 | b. | you die | d. | age 40 |
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75.
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All of the following are common types of permanent life
insurance _except
a. | convertible life | c. | whole life | b. | limited-pay life | d. | universal life |
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Ch 16 - Investing for the
Future
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76.
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A daily newspaper that provides detailed coverage of the business and financial
world is
a. | The Wall Street Journal | c. | Kiplinger’s Personal
Finance. | b. | Barron’s | d. | The Economist |
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77.
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The use of long-term savings to earn a financial reward is called
a. | gambling | c. | speculating | b. | diversifying | d. | investing |
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78.
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Which of the following would be considered the lowest risk
investment?
a. | a corporate bond | c. | real estate | b. | a stock | d. | an annuity |
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79.
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All of the following are wise investment practices except
a. | keep good financial records | b. | make your decisions quickly to take advantage
of the market | c. | seek good investment advice | d. | define your financial
goals |
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80.
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Which of the following is typically the first stage of investing?
a. | a put-and-take account | c. | systematic investing | b. | strategic investing | d. | speculation |
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