Question 1

A higher bond rating directly translates into ________ prices and ________ rates on the firm's bonds.

Accepted Answer

A)   higher; higher interest
B)   higher; lower interest
C)   lower; lower interest
D)   lower; higher interest
E)   higher; higher defaultF) A) and E)
G) A) and D)

Question 2

The amount of interest is determined by multiplying the amount of savings by the:

Accepted Answer

A)   annual interest rate.
B)   time period.
C)   number of months in a year.
D)   time period and number of months.
E)   annual interest rate and the time period.F) A) and C)
G) D) and E)

Question 3

Which of the following would be considered a fixed expense?

Accepted Answer

A)   electric bill
B)   cellphone bill on a plan with limited minutes
C)   mortgage payment
D)   gas bill
E)   medical expensesF) B) and C)
G) A) and E)

Question 4

Pat O'Malley wants to invest but worries about risk.In particular,he worries that the money he invests today will not buy as much 10 years from now.What type of risk concerns Pat?

Accepted Answer

A)   inflation
B)   interest rate risk
C)   business failure
D)   market
E)   globalizationF) B) and E)
G) A) and C)

Question 5

Which of the following represent the use of credit?

Accepted Answer

A)   demand deposits
B)   mortgages
C)   ATM withdrawals
D)   time deposits
E)   debit cardsF) A) and E)
G) A) and C)

Question 6

Kari Birch has decided to put $25 more per week in her savings account.She knows this will reduce her ability to go out to eat each week but thinks building her savings is important.This would be an example of a(n) :

Accepted Answer

A)   budget variance.
B)   opportunity cost.
C)   balance sheet.
D)   accounting error.
E)   budget anomaly.F) A) and E)
G) All of the above

Question 7

A stock issued by a corporation that has the potential of higher profits when compared to other firms is called a(n) ________ stock.

Accepted Answer

A)   defensive
B)   cyclical
C)   growth
D)   income
E)   blue-chipF) A) and C)
G) All of the above

Question 8

Financial objectives are rarely achieved without restraining:

Accepted Answer

A)   current consumption.
B)   savings.
C)   investment.
D)   future earnings.
E)   employment opportunities.F) A) and E)
G) B) and E)

Question 9

The par value of a bond is the:

Accepted Answer

A)   value of the bond at maturity plus the price of the bond at purchase.
B)   value of the bond at maturity minus the price of the bond at purchase.
C)   price of the bond at purchase.
D)   value of the bond at maturity.
E)   price of the bond at purchase minus the face value of the bond.F) C) and D)
G) A) and E)

Question 10

Which one of the following is an advantage of renting?

Accepted Answer

A)   unrestricted lifestyle
B)   tax benefits
C)   fewer responsibilities
D)   an ability to build equity
E)   increased equityF) C) and D)
G) All of the above

Question 11

The maximum amount of credit you are allowed by a creditor is called ________ credit.

Accepted Answer

A)   revolving
B)   line of
C)   convenience
D)   installment cash
E)   single lump-sumF) A) and C)
G) A) and D)

Question 12

Consider the following scenario when answering the questions that follow.
Your friend Carson is starting a new photography business that specializes in photographs of Central Park in New York City. Because his business is new and risky, he is unable to obtain a loan from the local bank. On June 21, 2013, you agree to pay a price of $4,000 for a bond from Carson. You will receive $5,000 in return on June 21, 2014.
-The par value of the bond mentioned in the scenario is equal to:

Accepted Answer

A)   $9,000.
B)   $1,000.
C)   $4,000.
D)   $5,000.
E)   $20,000.F) B) and E)
G) A) and B)

Question 13

Investing is different from saving because it:

Accepted Answer

A)   requires that less be spent than you earn.
B)   involves increased risk.
C)   ignores current income.
D)   is something only few people should do.
E)   is almost always guaranteed to provide income.F) B) and E)
G) C) and D)

Question 14

How much interest would be paid on a credit card at the end of the second 30-day month on a one-year $1,000 loan at a 12.99% annual rate? Assume you pay nothing at the end of the first 30-day month.

Accepted Answer

A)   $10.92
B)   $108.10
C)   $10.91
D)   $10.80
E)   $109.10F) C) and D)
G) B) and E)

Question 15

Janine Foster just bought a security that she expects will provide her with a quarterly cash payment,although that payment is not guaranteed.In fact,she expects the amount of the payment to vary over time.What type of payment is she expecting to receive?

Accepted Answer

A)   dividend
B)   interest
C)   capital gain
D)   royalties
E)   rebateF) B) and E)
G) A) and B)

Question 16

Ted Washington is single and 25.He recently graduated from college and has a job making $40,000 a year.Which one of the following investments would you recommend for his investment program?

Accepted Answer

A)   corporate bonds
B)   government bonds
C)   growth stocks
D)   commodities, such as oil
E)   certificates of deposit (CDs) F) A) and B)
G) A) and C)

Question 17

Other factors being equal,________-rated corporate bonds will pay the lowest amount of interest to bondholders.

Accepted Answer

A)   BBB
B)   AAA
C)   AA
D)   A
E)   AaF) B) and E)
G) A) and B)

Question 18

If a stock has a two-for-one split,the:

Accepted Answer

A)   value of the stock is guaranteed to increase.
B)   value of the stock is guaranteed to decrease.
C)   total value of the company increases.
D)   total value of the company decreases.
E)   total value of the company does not change.F) A) and E)
G) C) and D)

Question 19

The ________ of a bond is/are variable.

Accepted Answer

A)   rate of interest
B)   face value
C)   maturity date
D)   market price
E)   contract termsF) All of the above
G) C) and D)

Question 20

Which one of the following is a "junk" bond?

Accepted Answer

A)   T-bond
B)   bond rated B by Standard & Poor's
C)   bond rated AAA by Standard & Poor's
D)   insured municipal bond
E)   T-billF) A) and B)
G) A) and C)

Exam 19: Personal Finance

Investing is different from saving because it:

Correct Answer
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Correct Answer
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The maximum amount of credit you are allowed by a creditor is called ________ credit.

Correct Answer
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Kari Birch has decided to put $25 more per week in her savings account.She knows this will reduce her ability to go out to eat each week but thinks building her savings is important.This would be an example of a(n) :

Correct Answer
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Which of the following represent the use of credit?

Correct Answer
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Which one of the following is an advantage of renting?

Correct Answer
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A stock issued by a corporation that has the potential of higher profits when compared to other firms is called a(n) ________ stock.

Correct Answer
verified

How much interest would be paid on a credit card at the end of the second 30-day month on a one-year $1,000 loan at a 12.99% annual rate? Assume you pay nothing at the end of the first 30-day month.

Correct Answer
verified

Other factors being equal,________-rated corporate bonds will pay the lowest amount of interest to bondholders.

Correct Answer
verified

Which one of the following is a "junk" bond?

Correct Answer
verified

Which of the following would be considered a fixed expense?

Correct Answer
verified

Pat O'Malley wants to invest but worries about risk.In particular,he worries that the money he invests today will not buy as much 10 years from now.What type of risk concerns Pat?

Correct Answer
verified

A higher bond rating directly translates into prices and rates on the firm's bonds.

Correct Answer
verified

If a stock has a two-for-one split,the:

Correct Answer
verified

Ted Washington is single and 25.He recently graduated from college and has a job making $40,000 a year.Which one of the following investments would you recommend for his investment program?

Correct Answer
verified

The par value of a bond is the:

Correct Answer
verified

Financial objectives are rarely achieved without restraining:

Correct Answer
verified

Janine Foster just bought a security that she expects will provide her with a quarterly cash payment,although that payment is not guaranteed.In fact,she expects the amount of the payment to vary over time.What type of payment is she expecting to receive?

Correct Answer
verified

The ________ of a bond is/are variable.

Correct Answer
verified

The amount of interest is determined by multiplying the amount of savings by the:

Correct Answer
verified

Exam 19: Personal Finance

Investing is different from saving because it:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The maximum amount of credit you are allowed by a creditor is called ________ credit.

Correct AnswerverifiedShow Answer

Kari Birch has decided to put $25 more per week in her savings account.She knows this will reduce her ability to go out to eat each week but thinks building her savings is important.This would be an example of a(n) :

Correct AnswerverifiedShow Answer

Which of the following represent the use of credit?

Correct AnswerverifiedShow Answer

Which one of the following is an advantage of renting?

Correct AnswerverifiedShow Answer

A stock issued by a corporation that has the potential of higher profits when compared to other firms is called a(n) ________ stock.

Correct AnswerverifiedShow Answer

How much interest would be paid on a credit card at the end of the second 30-day month on a one-year $1,000 loan at a 12.99% annual rate? Assume you pay nothing at the end of the first 30-day month.

Correct AnswerverifiedShow Answer

Other factors being equal,________-rated corporate bonds will pay the lowest amount of interest to bondholders.

Correct AnswerverifiedShow Answer

Which one of the following is a "junk" bond?

Correct AnswerverifiedShow Answer

Which of the following would be considered a fixed expense?

Correct AnswerverifiedShow Answer

Pat O'Malley wants to invest but worries about risk.In particular,he worries that the money he invests today will not buy as much 10 years from now.What type of risk concerns Pat?

Correct AnswerverifiedShow Answer

A higher bond rating directly translates into ________ prices and ________ rates on the firm's bonds.

Correct AnswerverifiedShow Answer

If a stock has a two-for-one split,the:

Correct AnswerverifiedShow Answer

Ted Washington is single and 25.He recently graduated from college and has a job making $40,000 a year.Which one of the following investments would you recommend for his investment program?

Correct AnswerverifiedShow Answer

The par value of a bond is the:

Correct AnswerverifiedShow Answer

Financial objectives are rarely achieved without restraining:

Correct AnswerverifiedShow Answer

Janine Foster just bought a security that she expects will provide her with a quarterly cash payment,although that payment is not guaranteed.In fact,she expects the amount of the payment to vary over time.What type of payment is she expecting to receive?

Correct AnswerverifiedShow Answer

The ________ of a bond is/are variable.

Correct AnswerverifiedShow Answer

The amount of interest is determined by multiplying the amount of savings by the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A higher bond rating directly translates into prices and rates on the firm's bonds.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified