A person buys a building with 3 apartments. The profits may be lower than expected if

One of the apartments is not rented

Electricity and food expenditures are

Variable expenses that change from one period to another

A company offers a defined-contribution pension plan, so when the employee retires they receive

Total amount of money contributed plus investment earnings

If you decide to surrender a whole life insurance policy with a cash value clause, you will get

An amount that includes premiums paid and interest

Why might rising interest rates depress stock prices

Rising interest rates can result in lower business profits

The interest earned on United States Series EE Savings Bonds is

Exempt from state and local taxes

Before ABC corporation can issue stocks or bonds, they must register the issue with

The Securities and Exchange Commission (SEC)

The time value of money refers to the concept that money

Received now is worth more than same $ received in future

Using a brokerage firm, an investor buys 1000 shares of stock on 50% margin. This means

The brokerage firm is lending the investor 50% of the money

If you have a homeowner's policy with a $250 deductible, you will

Have to pay the first $250 in damages

An investor bought 40 shares of ABC stock @ $80/share. Two weeks later the stock splits 2-for-1

The investor now owns 80 shares of stock @$40/share

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W!SE Test Review Part 2

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Questions 25

Answers

1
A person buys a building with 3 apartments. The profits may be lower than expected if
One of the apartments is not rented
Taxes on the property are lowered
A tenant decides to paint the hallways
The mortgage gets paid off
2
Electricity and food expenditures are
Variable expenses that change from one period to another
Fixed expenses that are the same from one period to another
Personal expenses for an individual or family
Discreet expenses that do not have to be paid monthly
3
If you have $1000 in savings and earn $20/year in interest, what is approximate rate of return?
20%
5%
10%
2%
4
A company offers a defined-contribution pension plan, so when the employee retires they receive
One-half of the employee's last year's salary
An amount of money based on the profit the company earned.
Total amount of money contributed plus investment earnings
An amount based on how long the employee worked there
5
Which financial institution usually pays the highest interest rate on savings account balances?
Commercial banks
Credit unions
Savings and loan associations
Investment from money market accounts
6
Which item is likely to be covered by a standard homeowner's insurance policy with no floater?
Bedroom furniture
Furs
Jewelry
Large screen theater television
7
If you decide to surrender a whole life insurance policy with a cash value clause, you will get
The face value of policy less premiums paid
An amount of money that must be converted to a term policy
One-fifth of the face value of the policy
An amount that includes premiums paid and interest
8
After 5 years owning a Roth IRA, a person wants to purchase their 1st home. They can withdraw $
Tax and penalty free
And have penalties deferred until retirement
But may pay a set penalty at withdrawal
And owed taxes are deferred until retirement
9
A person owns a stock that pays $2/share dividend. Reinvesting the dividend buys what?
Bonds in the corporation
More of the same stock
Preferred stock in the corporation
Stocks that are similar to those already owned
10
A woman received expensive jewelry and has homeowner's insurance. What insurance does she need?
Premium deduction
Vicarious liability to cover theft
Personal property floater
Speculative risk insurance
11
The following is usually considered a variable expense
Electric bill payment
Mortgage payment
Car payment
Rent payment
12
Why might rising interest rates depress stock prices
People are lured from interest-paying investments to stocks
Rising interest rates usually means the economy has less
Rising interest rates can result in lower business profits
Rising interest rates can result in higher business profits
13
Buying a treasury bill (T-bill) is best for investors who are looking for
A higher yield on investment than corporate bonds offer
A place to invest between $100-$500
An investment that matures in 10-30 years
A secure, low-risk investment
14
What is the largest equities market in the world?
NASDAQ
American Stock Exchange (AMEX)
New York Stock Exchange (NYSE)
Over-the-counter (OTC) stock market
15
The interest earned on United States Series EE Savings Bonds is
Equal to the money paid to purchase it
Paid in a lump sum at the time the face value is reached
Exempt from state and local taxes
Deducted at the time of the bond's purchase
16
To determine the time value of depositing $100 in savings, you need to know interest rate and
If the bank offers overdraft protection
Total income
If the account is FDIC insured
Rate of inflation
17
A pharmacy is to drugs as the American Stock Exchange is to
Mutual funds
Interest
Stock advisors
Securities
18
A term that best describes your gross pay after taxes are deducted is
Take-home pay
Total revenues
Net worth
Assets
19
Before ABC corporation can issue stocks or bonds, they must register the issue with
The World Bank
The Federal Reserve
The Securities and Exchange Commission (SEC)
Their Board of Directors
20
The time value of money refers to the concept that money
Is the foundation for developing a financial plan
Changes in value along with interest rates
Money will double in value over 7 years
Received now is worth more than same $ received in future
21
What will not provide protection when taking an overseas trip?
Buying flight insurance
Buying international medical insurance coverage
Taking your passport
Buying baggage claim insurance
22
Chris bought stock for $4000 and one year later he sold it for $5000. His sale resulted in a
Capital gain
Net profit
Market value
Yield
23
Using a brokerage firm, an investor buys 1000 shares of stock on 50% margin. This means
The brokerage firm will own 50% of the 1000 shares bought
The investor will only pay $5000 for the shares
The brokerage firm is lending the investor 50% of the money
The investor is buying 2000 shares
24
If you have a homeowner's policy with a $250 deductible, you will
Have to pay a quarterly premium of $250
Receive a max of $250 for any single damaged item
Have to pay the first $250 in damages
Not be responsible for the first $250 in damages
25
An investor bought 40 shares of ABC stock @ $80/share. Two weeks later the stock splits 2-for-1
The investor now owns 20 shares of stock @$80/share
The investor now owns 80 share of stock @$80/share
The investor now owns 80 shares of stock @$40/share
The investor now owns 40 shares of stock @ $40/share

W!SE Test Review Part 2 Flashcards | StudBud