Question 1

All of the items listed are factors in the development of credit scores EXCEPT:

Accepted Answer

A)   amounts owed.
B)   types of credit you use.
C)   payment history.
D)   how many accounts you open.
E)   your level of education.F) C) and D)
G) B) and E)

Question 2

Which of the following investments has the lowest risk?

Accepted Answer

A)   T-bills
B)   municipal bonds
C)   income stocks
D)   real estate
E)   corporate bondsF) B) and E)
G) A) and D)

Question 3

Which one of the following is a disadvantage of using credit?

Accepted Answer

A)   receiving advance notice of sales
B)   ease of overspending
C)   avoiding the necessity of carrying cash
D)   ease of returning merchandise
E)   having a record of all purchasesF) A) and B)
G) A) and C)

Question 4

A government security issued with a maturity that is LESS than one year is called a:

Accepted Answer

A)   Federal Reserve note.
B)   Treasury bill.
C)   Treasury note.
D)   Treasury bond.
E)   savings bond.F) All of the above
G) B) and C)

Question 5

When you pay cash to buy something,you:

Accepted Answer

A)   give up the opportunity to keep the cash in an interest-bearing account.
B)   always get a cash discount.
C)   can build a better credit rating.
D)   get better personal service from store employees.
E)   have a better selection of goods than if you use credit.F) A) and D)
G) All of the above

Question 6

Stocks are:

Accepted Answer

A)   ownership shares in a firm.
B)   securities that represent a debt to be paid.
C)   markets in which securities are bought and sold.
D)   contracts that represent a guaranteed payment.
E)   not available for individual investors.F) C) and D)
G) A) and B)

Question 7

The quality rating given by Standard & Poor's to highly speculative bonds is:

Accepted Answer

A)   high-grade.
B)   default.
C)   investment-grade.
D)   medium-grade.
E)   unrated.F) None of the above
G) All of the above

Question 8

Some retirement planning experts suggest that you start retirement planning while you are:

Accepted Answer

A)   in school.
B)   married.
C)   divorced.
D)   middle-aged.
E)   still employed.F) None of the above
G) C) and D)

Question 9

An individual retirement account (IRA) is an example of a(n) ________ asset.

Accepted Answer

A)   personal
B)   common
C)   investment
D)   household
E)   budgetedF) None of the above
G) A) and B)

Question 10

The changing cost of using money is referred to as ________ risk.

Accepted Answer

A)   interest rate
B)   inflation
C)   economic
D)   trade-off
E)   personalF) A) and B)
G) A) and E)

Question 11

The value of the bond at maturity,or the payment due at repayment,is known as the ________ value.

Accepted Answer

A)   par
B)   maturity
C)   real
D)   ending
E)   nominalF) A) and D)
G) B) and E)

Question 12

Which of the following would increase the risk of a loan?

Accepted Answer

A)   rising consumer prices
B)   a short time to maturity
C)   lower consumer prices
D)   constant interest rates
E)   a good credit ratingF) A) and C)
G) B) and E)

Question 13

What is the highest rating a bond can receive from the rating firm Standard & Poor's?

Accepted Answer

A)   A+
B)   A++
C)   AA
D)   AAA
E)   AF) B) and C)
G) B) and D)

Question 14

Treasury securities are:

Accepted Answer

A)   securities backed by mortgages and student loans.
B)   riskier assets than most other investment options.
C)   sold directly to individual investors in the open market.
D)   only available to foreign investors.
E)   bonds sold by the U.S.government to pay for the national debt.F) None of the above
G) C) and D)

Question 15

Your aunt gives you some money for your birthday and you decide to put it into your savings account instead of spending it.The trade-off of not being able to spend the money now is this decision's ________ cost.

Accepted Answer

A)   fixed
B)   opportunity
C)   variable
D)   transaction
E)   totalF) B) and D)
G) C) and D)

Question 16

Which one of the following investments is likely to have the highest return (and highest risk) between now and the year 2025?

Accepted Answer

A)   U.S.Treasury bills
B)   corporate bonds
C)   stocks
D)   municipal bonds
E)   zero-coupon bondsF) B) and D)
G) A) and E)

Question 17

People seeking high (and risky) returns would likely invest in any of the following EXCEPT:

Accepted Answer

A)   growth stocks.
B)   junk bonds.
C)   commodity futures, such as oil.
D)   precious metals.
E)   T-bonds.F) A) and B)
G) D) and E)

Question 18

A loan to purchase real estate in which the real estate itself serves as collateral is a(n) ________ loan.

Accepted Answer

A)   mortgage
B)   property
C)   real estate
D)   homeowner's
E)   escrowF) A) and B)
G) D) and E)

Question 19

A government security issued with maturities of more than 10 years is called a:

Accepted Answer

A)   Federal Reserve note.
B)   Treasury bill.
C)   Treasury note.
D)   Treasury bond.
E)   savings bond.F) B) and C)
G) A) and C)

Question 20

Which of the following goal statements would be the easiest to implement and measure?

Accepted Answer

A)   "Reduce our debt payments."
B)   "Save funds for an annual vacation."
C)   "Save $100 a month to create a $4,000 emergency fund."
D)   "Invest $2,000 a year for retirement."
E)   "Increase our emergency fund."F) A) and E)
G) A) and C)

Exam 19: Personal Finance

A loan to purchase real estate in which the real estate itself serves as collateral is a(n) ________ loan.

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A government security issued with maturities of more than 10 years is called a:

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Which of the following investments has the lowest risk?

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Some retirement planning experts suggest that you start retirement planning while you are:

Correct AnswerverifiedShow Answer

Which of the following goal statements would be the easiest to implement and measure?

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Which of the following would increase the risk of a loan?

Correct AnswerverifiedShow Answer

What is the highest rating a bond can receive from the rating firm Standard & Poor's?

Correct AnswerverifiedShow Answer

Stocks are:

Correct AnswerverifiedShow Answer

Your aunt gives you some money for your birthday and you decide to put it into your savings account instead of spending it.The trade-off of not being able to spend the money now is this decision's ________ cost.

Correct AnswerverifiedShow Answer

The changing cost of using money is referred to as ________ risk.

Correct AnswerverifiedShow Answer

Treasury securities are:

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Which one of the following is a disadvantage of using credit?

Correct AnswerverifiedShow Answer

The value of the bond at maturity,or the payment due at repayment,is known as the ________ value.

Correct AnswerverifiedShow Answer

A government security issued with a maturity that is LESS than one year is called a:

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All of the items listed are factors in the development of credit scores EXCEPT:

Correct AnswerverifiedShow Answer

Which one of the following investments is likely to have the highest return (and highest risk) between now and the year 2025?

Correct AnswerverifiedShow Answer

An individual retirement account (IRA) is an example of a(n) ________ asset.

Correct AnswerverifiedShow Answer

People seeking high (and risky) returns would likely invest in any of the following EXCEPT:

Correct AnswerverifiedShow Answer

The quality rating given by Standard & Poor's to highly speculative bonds is:

Correct AnswerverifiedShow Answer

When you pay cash to buy something,you:

Correct AnswerverifiedShow Answer

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