Money Matters: Semester 2 Exam (Ch. 12-24) - Modified
Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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Ch. 23 Health and Life
Insurance
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1.
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All of the following are common types of permanent life
insurance _except
a. | universal life | c. | convertible life | b. | limited-pay
life |
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2.
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The maximum duration of benefits under most disability policies is until
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3.
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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. | premium value | c. | face value | b. | cash value |
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4.
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Government-sponsored health insurance for people with low incomes is
called
a. | a fee-for-service plan | c. | a managed care plan | b. | Medicaid |
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Ch 21: Introduction to Risk
Management
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5.
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In which period of the business cycle has the economy hit the bottom?
a. | recession | c. | trough | b. | recovery |
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6.
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A condition that creates or increases the likelihood of some loss is called
a
a. | proof of loss | c. | hazard | b. | probability |
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7.
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Understanding the types of risk you will face and their potential consequences
is called
a. | risk analysis | c. | risk administration | b. | risk assessment |
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8.
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All of the following types of insurance protect against personal risk
except
a. | health insurance | c. | property insurance | b. | life insurance |
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9.
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Which of the following techniques is not recommended for a serious
risk?
a. | avoid the risk | c. | assume the risk | b. | shift the risk |
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10.
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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. | claim | c. | benefit | b. | premium |
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Ch 16 - Investing for the
Future
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11.
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Which of the following would be considered the lowest risk
investment?
a. | an annuity | c. | a corporate bond | b. | real estate |
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12.
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A daily newspaper that provides detailed coverage of the business and financial
world is
a. | The Economist | c. | Barron’s | b. | The Wall Street
Journal |
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13.
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The use of long-term savings to earn a financial reward is called
a. | investing | c. | speculating | b. | gambling |
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14.
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Which of the following is typically the first stage of investing?
a. | speculation | c. | strategic investing | b. | a put-and-take
account |
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Ch 24 - Role of Consumers in a Market
Economy
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15.
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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 debit card | c. | cash | b. | a prepaid gift
card |
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16.
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Which of the following would be considered a hands-on economic system?
a. | libertarianism | c. | communism | b. | laissez-faire |
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17.
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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. | pyramid scheme | b. | pigeon drop |
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18.
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Collectively, the production of goods and services in the U.S. economy is
directed by
a. | consumer buying decisions | c. | producers and
suppliers | b. | the government |
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19.
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A minimum wage law is an example of a
a. | price fix | c. | price ceiling | b. | price floor |
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20.
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The price at which the quantity supplied equals the quantity demanded of the
product is the
a. | equilibrium price | c. | price floor | b. | market price |
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21.
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The American airline industry is an example of
a. | an oligopoly | c. | pure competition | b. | a monopoly |
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Ch. 14: Buying & Owning a
Vehicle
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22.
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In most cases, the most important factor in determining a car’s resale or
trade-in value is
a. | mechanical condition. | c. | the vehicle’s age. | b. | the vehicle’s
fuel efficiency. |
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23.
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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. | 20,000 to 30,000 | c. | 3,000 to 5,000 | b. | 7,000 to 10,000 |
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24.
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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. | Consumer Reports | c. | Auto Trader | b. | Kelley Blue
Book |
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25.
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Which of the following vehicles would most likely have the highest insurance
rate?
a. | used mini-van | c. | new sports car | b. | fuel-efficient compact
car |
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Ch. 17 - Investing in Stocks
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26.
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An increase in the value of a stock over time is called a(n)
a. | investment | c. | capital gain | b. | yield |
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27.
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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. | growth stocks | c. | defensive stocks | b. | emerging stocks |
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28.
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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. | P/E ratio | c. | ROI | b. | percent yield |
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29.
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Which of the following would be considered an odd lot of stocks?
a. | 200 shares | c. | 1,000 shares | b. | 50 shares |
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Ch. 12 - Renting a Residence
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30.
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Many utility companies charge new customers a(n)
a. | installation surcharge. | c. | one time nonrefundable
fee | b. | refundable security deposit. |
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31.
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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?
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32.
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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. | dormitory. | b. | hostel. |
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33.
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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. | When is your birthday? | b. | Do you have a
job? |
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34.
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The monthly charge you pay to live in an apartment is called
a. | rent. | c. | a security deposit. | b. | a lease. |
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35.
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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. | cable TV. | c. | laundry services | b. | utilities. |
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36.
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Which of the following would generally be considered an advantage of renting as
compared to owning a home?
a. | fewer responsibilities | c. | more privacy | b. | less noise |
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Ch 22: Property and Liability
Insurance
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37.
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The most complete homeowners insurance policy coverage is called
a. | basic | c. | comprehensive | b. | special form |
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38.
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Which type of auto insurance protects your own car against damage from auto
accidents?
a. | liability | c. | comprehensive | b. | collision |
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39.
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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. | model of the car | c. | age of the driver | b. | occupation of the
driver |
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40.
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The cost of replacing an item regardless of its actual cash value is
called
a. | exclusionary costs | c. | replacement value. | b. | opportunity
cost |
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41.
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Which of these people would be considered an uninvited guest on your
property?
a. | a plumber who comes to fix a leaking faucet in your bathroom | b. | the letter carrier
who delivers your mail | c. | your brother, who you’ve asked to come
watch the ballgame with you |
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42.
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Which of the following items would NOT be covered by most homeowners insurance
policies?
a. | a car stereo | c. | all of the above would be covered | b. | kitchen
appliances |
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43.
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This type of risk includes the cost of another person’s losses for
injuries at your property.
a. | hazards | c. | liability | b. | crimes |
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Ch. 20 Retirement and Estate
Planning
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44.
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Social Security replaces about ____ percent of an average wage earner's
income after retiring.
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45.
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The amount for which you could sell your home now is its
a. | assessed value | c. | current market value | b. | appraised value |
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46.
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A legal document authorizing someone to act on your behalf is called a
a. | codicil. | c. | inter vivos | b. | power of
attorney |
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47.
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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 |
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48.
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A will written in a person’s own handwriting is called a
a. | simple will. | c. | holographic will | b. | codicil |
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Ch 19 - Mutual Funds, Real Estate, and Other
Choices
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49.
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Advantages of investing in mutual funds include all of the following
except
a. | professional management | c. | liquidity | b. | a guaranteed rate of
return |
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50.
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Which of the following tells you the market price for a share of a mutual
fund?
a. | par value | c. | net asset value | b. | face value |
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51.
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Which of the following is the most risky investment?
a. | money market fund | c. | growth and income fund | b. | growth
fund |
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52.
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A building with two separate living quarters is called a
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53.
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Farm products (such as wheat, corn, and cattle) and metals (such as gold and
silver) are called
a. | futures | c. | options | b. | commodities |
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54.
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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 |
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Ch 13. Buying a Home pp.
297-313
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55.
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A serious intent to be bound to an agreement is a(n)
a. | contingency. | c. | acceptance. | b. | offer. |
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56.
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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. | escrow account. | b. | trust deed. |
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57.
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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. | market | c. | assessed | b. | appraised |
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58.
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Legally established ownership of property is a
a. | deed. | c. | tenancy agreement. | b. | title. |
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Ch 15 Family Decisions
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59.
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Guests as well as the wedding party would be expected to wear long gowns and
tuxedos at a(n)
a. | formal wedding | c. | informal wedding | b. | destination
wedding |
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60.
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An advance commitment to receive a service at a specified later date is
a(n)
a. | reservation | c. | agenda | b. | contract |
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61.
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Money paid by one former spouse to support the other is called
a. | alimony | c. | the dissolution fee | b. | child support |
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62.
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The final statement of a dissolution decision is called a
a. | support statement | c. | Petition for Dissolution of Marriage | b. | divorce
decree |
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63.
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Which of the following wedding expenses would most likely be paid by the
groom?
a. | the bride’s ring | c. | cleric’s or judge’s fee | b. | the marriage
license | d. | all of the
above |
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Ch 18. Investing In Bonds
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64.
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The amount a bondholder will be paid at maturity is called
a. | face value | c. | yield. | b. | dividend. |
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65.
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A type of corporate bond based on the general creditworthiness of the company is
called a(n)
a. | mortgage bond. | c. | secured bond | b. | debenture |
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66.
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When bonds sell for more than their face value, they are selling at a
a. | discount | c. | capital gain | b. | premium |
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67.
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When a bond issuer cannot meet the interest and/or principal payments, what has
occurred?
a. | short selling | c. | bond default | b. | bond redemption |
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68.
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Which of the following types of bonds cannot be purchased through
TreasuryDirect?
a. | Treasury securities | c. | Series EE savings bonds | b. | corporate
bonds |
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