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Duplicate of W!SE Moneypower Review Flashcards | StudBud
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Duplicate of W!SE Moneypower Review
Duplicate of W!SE Moneypower Review
50 terms
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Review using the moneypower questions
Flashcards
50 cards
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Practice quiz
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Questions
50
Answers
1
Sam buys a big TV. He has homeowner's insurance. Why should he add a personal property floater?
To show his insurance he made a good faith investment
To reduce the premium on the homeowner's insurance.
To protect the himself from liability for damages.
To cover cost of replacement if it gets damaged or stolen.
2
A blank endorsement on a check:
Has no effect on the check
Restricts the use of the check
Cancels the check
Creates a check that can be cashed by anyone
3
Can Cathy withdraw money from her IRA savings account?
She can take it out at any time since she made the deposits
Money cannot be withdrawn from an IRA before age 59
50% penalty for not starting to withdraw money at age 59
There is a 10% penalty on any money taken out before age 59
4
Frankie's savings account has earned a lot of interest. Does he have to pay taxes on interest?
If the interest is under $50, it is not taxable
Interest earned on savings accounts is not taxable
Savings account interest is taxable
A sales tax will be charged on the interest earned
5
I had a $20,000 whole life insurance policy with a cash value clause. I surrender it. I get
an amount that must be converted to a term life policy.
one-fifth of the $20,000 face value.
a calculated amount including premiums paid and interest.
$20,000 less the premiums paid.
6
After five years of owning a Roth IRA, Sam buys his first home, he can withdraw money
and have penalties deferred until retirement.
but must pay a set penalty at the time of withdrawal.
tax and penalty free.
and owed taxes are deferred until retirement.
7
What is the largest equities market in the world?
New York Stock Exchange (NYSE)
American Stock Exchange (AMEX)
NASDAQ market
Over-the-counter (OTC) market
8
A man budgeted $200 a month for clothing. This month the man spent $150 on clothing. This is
a budget deficit.
a budget variance.
an income overage.
an outflow deficit.
9
Loan that puts all debts into one loan with lower payments, longer repayment period, lower APR
Balloon payment loan
Consolidation loan
Predatory loan
Collateralized loan
10
What is meant by an uncollateralized loan?
A loan taken on a life insurance policy.
A home equity loan.
A loan not backed by a co-signer
A personal loan without assets to cover the loan amount.
11
With a broker, an investor buys 1000 shares of a common stock at $50 a share on 50% margin
brokerage firm is lending the investor 50% of the money.
brokerage firm will own 50% of the 1000 shares of stock.
investor will pay only $5000 for the shares.
investor is buying 2000 shares.
12
Joan wants to open a checking account and wonders if checking accounts pay interest.
Checking accounts never pay interest
Some types of checking accounts pay interest
Checking accounts pay interest if they have a high balance
All checking accounts pay interest
13
Who benefits the most from inflation?
Lenders
Long-term fixed rate borrowers
The government
Persons on fixed incomes
14
I lost my debit card and didn't report it for 3 months. My maximum liability is:
No liability because she notified the financial institution
$500
$50
Unlimited liability
15
I had a $2,000 loss. My insurance company pays me $1,500. I didn't get $500 because of a:
Premium
Co-insurance clause
Hazard clause
Deductible
16
Sam bought 40 shares at $80 a share. The corporation does a 2-for-1 stock split. Sam now owns
20 shares of the stock and the price of each share is $80.
40 shares of the stock and the price of each share is $40.
80 shares of the stock and the price of each share is $80.
80 shares of the stock and the price of each share is $40.
17
The interest earned on United States Series EE Savings Bonds is
exempt from state and local taxes
paid in a lump sum when the bond matures
equal to the money paid to purchase it
deducted at the time of the bond's purchase
18
Money for saving, investing, or spending cannot be from:
Capital gains from a sale of stock
Capital losses from the sale of stock
Discretionary income or a gift of money
An inheritance from someone who has died
19
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
US Treasury Department
State Banking Commission
Federal Deposit Insurance Corporation (FDIC)
Federal Reserve Board
20
When a person declares bankruptcy that fact will appear on the person's credit report
until the person is able to receive a new credit card.
until the person repays all debts owed.
for a 3 year period.
for a 10 year period.
21
Which of the following is considered to be open-end credit?
Installments loans.
A car loan.
Department store charge cards.
A mortgage.
22
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:
The Federal Reserve
The World Bank
The Securities and Exchange Commission (SEC)
Its Board of Directors
23
A person has a lot of outstanding credit and is unable to make payments. What can they do?
Notify a credit reporting agency to avoid a late fee
Contact the IRS to avoid paying income tax this year
File for bankruptcy to maintain ones current credit score.
Notify the credit companies to negotiate a new payment plan.
24
One of the reasons cigarettes are so expensive is that
the government imposes an excise tax on them
the tobacco supply is controlled by the FTC
their cost is controlled by the Food and Drug Administration
the tobacco industry imports most of the tobacco
25
To qualify for a Federal Housing Administration (FHA) loan, a person must generally
fulfill income guidelines.
have at least a high school diploma.
provide two individuals to co-sign the loan.
have one-quarter of the cost of the home for a down-payment.
26
Which of the following does the Federal Reserve use to regulate the nation's money supply?
Monetary policy
Proposing legislation
Fiscal policy
Regulations
27
Ben's income is $30,000. He contributed $3,000 to a traditional IRA. What's his taxable income?
$33,000
$27,000
$30,000
$0 because he contributed to an IRA
28
Which of the following will help you the least in managing your money?
get advice from your friends
plan ahead for large expenses and resist impulse buying
pay your rent/mortgage payment and utility bills on time
set goals and keep a budget for your net income
29
When the market has a steady decline in stock prices over a period of time, it is known as a:
Fluctuating Market
Bull Market
Bear Market
Risky Market
30
I had to make a long-distance call and didn't have cash. I was able to make the call by using:
Cash card
Traveler's check
Identification card
Credit card
31
Which of the following provides an increase in assets or wealth?
Taking out a loan
Running in the marathon
Volunteering at a hospital
Having capital gains
32
Buying a treasury bill (T-bill) is best for investors who are looking for
higher yield on their investment than corporate bonds offer.
an investment that matures in 10-30 years.
a secure, low risk investment.
a place to invest between $100-$500.
33
Sam buys a house with three rental apartments. The profits may be lower than expected if
tenant in an apartment decides to paint the hallways.
mortgage on the house is paid off.
one of the apartments is not rented.
taxes on the house are lowered.
34
A debt ratio shows the relationship between debt and net worth. The lower the ratio the
more liquid assets the person has.
worse off financially the person is.
better off financially the person is.
less liquid assets the person has.
35
One of the benefits of holding an investment for over a year rather than selling it sooner is
fees will not be charged by brokers for selling it
capital gains on the investment will be taxed at lower rate
profits on the investment can be averaged over time
money earned on the investment will be considered tax-free.
36
The bank where Sam has his account will continue to pay out money for the checks he writes if:
He maintains a good record of deposits and acts responsibly
There is enough money in Sam's account to cover the checks
The financial institution has sufficient funds
He uses checks from her checkbook
37
Interest earned on interest is known as:
Variable Interest
Compound Interest
True Interest
Simple interest
38
Another term for the dollar amount of your paycheck after taxes and other withholdings is:
Discretionary income
Gross income
Net income
Adjusted gross income
39
To find the time value of depositing $100 in a savings account, you need the interest rate and
her total income.
whether the bank offers overdraft protection.
the rate of inflation.
whether the account is FDIC protected.
40
Sam owns stock that pays a $2.00 a share dividend. Sam reinvests the dividend The $2.00 goes to
bonds in the corporation.
preferred stock in the corporation.
more of the same stock.
stocks that are similar to those already owned.
41
The amount a lender charges to borrow money is called the:
Finance charge
Annual Percentage Rate (APR)
Principal
Loan balance
42
The cost to use someone else's money for a period of time is called the:
Minimum payment
Interest rate expressed as a percentage
Opportunity cost
Inflation rate
43
A pharmacy is to drugs as the American Stock Exchange is to:
Mutual Funds
Securities
Stock Advisors
Interest
44
Who uses consumer credit reports in making decisions?
Schools
Churches
Brokers
Lenders
45
When a person brings an item to a pawnshop to obtain cash, the transaction is considered
a sales agreement.
a custodial payment.
an unsecured loan.
a collateralized loan.
46
Sam gets a very expensive piece of jewelry. He has homeowner's insurance. What should he do?
Get a personal property floater
Get speculative risk insurance
Know if it's stolen it'll be considered vicarious liability
Deduct the cost of the jewelry from his premium
47
I had the main income for my family. I died with no life insurance. My wife won't worry about
An increase in income and expenses
Death-related expenses to be paid
The loss of my income
A reduction in the family's standard of living
48
A defined-contribution pension plan means that upon retirement the employee will receive
amount of money based only on how long they worked there
one-half of the employee's last year's salary.
total amount of money contributed and investment earnings
amount of money based totally on the profit by the company
49
Spreading assets across several types of saving and investment products to manage risk is
Allocation
Pooling
Budgeting
Diversification
50
A stock broker or financial consultant:
Sells money orders and certified checks
Gives financial advice to clients
Do not have to be licensed
Guarantee a return on investment
