How does having a savings account help a person's financial well being?

it improves a person's ability to deal with emergencies

A married couple files for Chapter 13 Bankruptcy. Which of the following must be TRUE in order for them to qualify

At least one of them must be earning income when filing CH 13

There are 190 millions shares outstanding of ABC Corp. What does that mean?

The number of shares held by the investors/shareholders in this company

The Consumer Financial Protection Bureau (CIFB) was created to

help the public become informed consumers

Which statement describes cash value of a whole life ins policy

if the policy is cancelled, the owner gets the accumulated cash value

Why might rising interest rates cause a decrease in stock prices?

Investors might move from stocks to interest bearing bonds

What is a common feature of both a bond and a common stock?

the investor has the right to sell the investment at any time

What is an advantage of buying municipal bonds

They do not have any risk of decreasing in value

Why does a corporation issue bonds

to raise money for expansion or other company operations

An example of a long term goal for a 28 yr old person is

save over six years for a $5,000 down payment on a boat

A true statement about corporate bonds is that they are

loans given by the investor to the issuing corporation

A person earned $100 in interest on her savings account. That $100 must be

reported as income on a person's income tax return

One role of the Federal Reserve System is

setting reserve requirements for banking deposits (how much $ banks need)

Generally, inflation negatively impacts retirees living on fixed incomes because

prices are rising faster than their income

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W!SE Financial Literacy Review

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Questions 24

Answers

1
How does having a savings account help a person's financial well being?
it improves a person's ability to deal with emergencies
it improves a person's job security
it reduces the FICA payroll contribution
it reduces the balance on a person's credit card
2
Individuals that have enough money to cover expenses if they die often DO NOT buy life insurance...they are said to be
in charge
in control
self-insured
insured against risk
3
Reorganization bankruptcy, includes a court ordered plan to repay debt in three to five years
Chapter 11
Chapter 12
Chapter 13
Chapter 7
4
A married couple files for Chapter 13 Bankruptcy. Which of the following must be TRUE in order for them to qualify
The amount they ow cannot be more than twice their annual income
The total amount of debt cannot exceed $200,000
They must not own a house with an unpaid mortgage when filing for Ch 13
At least one of them must be earning income when filing CH 13
5
There are 190 millions shares outstanding of ABC Corp. What does that mean?
The number of shares held by the investors/shareholders in this company
The number of shares sold on the first day the stock was issued
The number of shares owned by the executives of the company
The number of shares the corporation own
6
The Consumer Financial Protection Bureau (CIFB) was created to
license companies to sell specific products
help the public become informed consumers
set the price at which goods are sold
regulate the number of customers a company can serve
7
Which statement describes cash value of a whole life ins policy
if the policy is cancelled, the owner gets the accumulated cash value
cash value policies are less expensive to purchase
when the policyholder dies, the beneficiary gets the cash value
cash value doubles every three years
8
Why might rising interest rates cause a decrease in stock prices?
Investors might move from stocks to interest bearing bonds
Stock investors are charged higher fees for buying stock
Stock investors are buying more mutual funds
Rising interest rates usually results in fewer people saving money
9
What is a common feature of both a bond and a common stock?
capital gains are tax free for both investments
the investor has the right to sell the investment at any time
both investments can be purchased at a discount
both investments pay interest annually
10
What is an advantage of buying municipal bonds
This type of bond is generally sold at a higher price
They do not have any risk of decreasing in value
Dividend income is tax-free
Interest received from this type of bond is exempt from federal income tax
11
Business reorganization bankruptcy
Chapter 7
Chapter 13
Chapter 12
Chapter 11
12
A single, 28 yr old person with no assets, has a credit card with a$1,500 balance. She dies. Who has to pay her debt?
Her estate
The credit card company
nobody
her parents
13
Why does a corporation issue bonds
To increase corporate profits
to expand ownership of the corporation
to comply with the SEC requirements
to raise money for expansion or other company operations
14
An example of a long term goal for a 28 yr old person is
save over six years for a $5,000 down payment on a boat
buy a used car within the next ten months
decrease the amount of money spend on entertainment by age 32
invest in blue chip stocks by age 30
15
A true statement about corporate bonds is that they are
paid at maturity for less than the face value
loans given by the investor with ownership privileges in the corporation
loans given by the investor to the issuing corporation
issued by the SEC
16
A person earned $100 in interest on her savings account. That $100 must be
kept in the savings account for two years
reported as income on a person's income tax return
transferred at the end of the year to a Certificate of Deposit
withdrawn by the person at the end of the year
17
One role of the Federal Reserve System is
printing money
establishing exchange rates for international currencies
collecting taxes
setting reserve requirements for banking deposits (how much $ banks need)
18
Generally, inflation negatively impacts retirees living on fixed incomes because
interest paid on bonds decrease
prices are rising faster than their income
the government reduces their Social Security benefits
taxes will increase
19
liquidation of assets to pay debts, does not involve the filing of a plan of repayment
Chapter 13
Chapter 11
Chapter 7
Chapter 12
20
Which of the following is the most liquid
collectible antique cars
municipal bonds
savings accounts
stock mutual funds
21
Which investment would a person choose today if she believes that interest rates will rise
common stocks
a long term bond
a short term bond
a variable rate loan
22
Before making an investment in stocks, a person should know
his risk tolerance
the future increase in the price
the company's Chief Executive Officer
his potential future price
23
Which of the following ways to compute interest on a savings account with $1,000 paying 2% will yield the most money?
interest compounded monthly
Simple interest
interest compounded quarterly
interest compounded semi-annually
24
You die before you can pay off the loan for your truck. What type of insurance with pay this debt in full?
mortgage life insurance
Credit Life Insurance
home insurance
credit auto insurance

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