If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
US Treasury Department.
Federal Deposit Insurance Corporation. (FDIC).
State Banking Commission.
Federal Reserve Board.
A bank Certificate of Deposit is a:
Savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty
Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals
Cash deposit in a savings account that earns interest
Certificate for deposits that are issued for half the face value
A person is depositing $20 in cash and a check for $50. On the checking account deposit slip, the person should
include the reason that both cash and a check are being deposited.
indicate what bank issued the check that is being deposited.
indicate the amount of money that is currently in the checking account as well as in a savings account to cover the check.
list the cash deposit separately from the check as well as the total of the deposit.
The financial institution where Ms. Sanchez has her checking account will continue to pay out money for the checks she writes as long as:
She uses checks from her checkbook
The financial institution has sufficient funds
There is enough money in Ms. Sanchezos account to cover the amount of the checks
She maintains a good record of deposits and handles her account responsibly
Margaret wants to store a valuable coin collection and important papers. Generally, consumers should:
Store valuables in a cabinet at home
Rent a safe deposit box for their valuables
Hand valuables over to their attorney
Store valuables in locked drawer
When a person declares bankruptcy that fact will appear on the person's credit report
for a 3 year period.
for a 10 year period.
until the person repays all debts owed.
until the person is able to receive a new credit card.
To qualify for a Federal Housing Administration (FHA) loan, a person must generally
have at least a high school diploma.
have one-quarter of the cost of the home for a down-payment.
fulfill income guidelines.
provide two individuals to co-sign the loan.
When a person brings an item to a pawnshop to obtain cash, the transaction is considered
a collateralized loan
a custodial payment.
an unsecured loan.
a sales agreement.
Which of the following is considered to be open-end credit?
A car loan
Department store charge cards
What is meant by an uncollateralized loan?
a loan not backed by a co-signer who agrees to cover the amount of the loan
a personal loan without assets to cover the loan amount
a home equity loan
a loan taken on a life insurance policy
A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?
Notify a credit reporting agency in order to avoid a late fee.
File for bankruptcy in order to maintain ones current credit score.
Notify the credit card companies in order to negotiate a new payment plan.
Contact the Internal Revenue Service in order to avoid paying income tax this year.
A creditor may deny credit because of:
bad credit history
You used your credit card to buy flowers at the florist. The dollar amount of the purchase was:
Deducted immediately from your checking account
Added to your credit card account as a finance charge
Added to your credit card bill and you pay for it at a later date
Put on your credit card bill as a cash advance
Which of the following does the Federal Reserve use to regulate the nation's money supply?
To make sure you will always remember your automated teller machine (ATM) card personal identification number (PIN), you should write the PIN and keep it:
in your wallet
in your checkbook
on your ATM card
in a secure place at home
When money is not used and goods and services are exchanged for other goods and services, this system is called:
A cash card generally:
Can be used in the same way that someone uses a check to pay bills by mail
Is purchased with a specific amount of money that can be used to pay for goods or services
Is the same as a credit card which means you can use it to pay the minimum on a bill
Is the same as a debit card and is always linked to a specific checking account
The denominations of coins in the United States are:
$.01 , $.05, $.10, $.25, $.50, and $1 .00
$.01, $.30, $.50, and $5.00
$.05, $.10, $.50, $.75, and $10.00
Coins can be in any denomination a consumer desires
A person complains about how expensive it is to be a cigarette smoker. One of the reasons cigarettes are so expensive is that
the tobacco supply is controlled by the Federal Trade Commission (FTC).
the tobacco industry imports most of the tobacco.
their cost is controlled by the Food and Drug Administration (FDA).
the government imposes an excise tax on
One of the benefits of holding an investment for over a year rather than selling it in less than a year is that the
capital gains on the investment will be taxed at a lower rate.
fees will not be charged by brokers for selling the investment.
money earned on the investment will be considered tax-free.
profits on the investment can be averaged over the length of time the investment is held.
A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the
better off financially the person is
worse off financialy the person is
more liquid assets the person has
less liquid assets the person has
A man budgeted $200 a month for clothing. This month the man spent $150 on clothing therefore that budget item is considered to have
an outflow deficit
an income overage
a budget variance
a budget deficit
I find myself using my credit card to cover the cost of food or rent because I'm regularly short on cash at the end of each month. The best thing to do is:
ignore it. Things are bound to get better
Make a budget and consider way to reduce expenses or increase income
Borrow money from a relative
Apply for additional credit cards
The financial planning process:
includes lifetime goals
needs to be adjusted for changing needs and goals for different stages of life
does not need to be revised for changing income and needs
guarantees that assets will increase
John's company will match his pre-tax contributions to the company's retirement plan, known as:
a 401 (k)
a Roth IRA
a defined benefit plan
a traditional IRA
Which of the following is necessary for successful budgeting?
a copy of credit card report
the location of your banks
the ability to adjust spending to money available
a list of unexpected income
Financial planning is important because it helps you to:
have higher expectations
eliminate risk on investments
reach financial goals and protect your assets
achieve all personal goals
Something you are working to achieve within a defined period of time is a(an):
A company offers a defined-contribution pension plan which means that upon retirement the employee will receive
one-half of the employee's last year's salary
the total amount of money contributed plus investment earnings
an amount of money based only on the length of time the employee worked for the company
a specified amount of money based totally on the profit earned by the company while the employee worked there
After five years of owning a Roth Individual Retirement Account (IRA), a person wants to buy his first home, the person can withdraw money from the Roth IRA
tax and penalty free
but must pay a set penalty at the time of withdrawal
and have penalties deferred until retirement
and owed taxes are deferred until retirement
A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying
more of the same stock
stocks that are similar to those already owned
preferred stock in the coporation
bonds in the corporation
As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower then expected if the
tenant in an apartment decides to paint the hallways.
mortgage on the house is paid off.
taxes on the house are lowered.
one of the apartments is not rented.
An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-l stock split. Based on this information, the investor would own at the moment of the split
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 $40.
80 shares of the stock and the price of each
A pharmacy is to drugs as the American Stock Exchange is to:
Buying a treasury bill (T-bill) is best for investors who are looking for
a place to invest between $100-$500
a secure, low risk investment.
a higher yield on their investment than corporate bonds offer.
an investment that matures in 10-30 years.
What is the largest equities market in the world?
American Stock Exchange (AMEX)
New York Stock Exchange (NYSE)
Over-the-counter (OTC) market
Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the
investor will pay only $5000 for the shares
investor is buying 2000 shares
brokerage firm is lending the investor 50% of the money
brokerage firm will own 50% of the 1000 shares of stock that were purchased.
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:
its Board of Directors
The Federal Reserve
The World Bank
The Securities and Exchange Commission (SEC)
The interest earned on United States Series EE Savings Bonds is
exempt from state and local taxes.
paid in a lump sum at the time the face value on the bond is reached.
equal to the money paid to purchase it.
deducted at the time of the bond's purchase.
The activity of the New York Stock Exchange most closely resembles:
a department store
an auction house
a dance hall
To determine the time value of depositing $100 in a savings account, a person needs to know the interest rate and
her total income
the rate of inflation
whether the account is FDIC protected
whether the bank offers overdraft protection
Lamar believes that interest rates are going to fall in the near future and remain low for a considerable period of time. She should invest in:
Nothing, she should put her money under her mattress
A variable rate certificate of deposit
A long-term, fixed rate certificate of deposit
A short-term, fixed rate certificate of deposit
What should a person do when he believes he is being charged too high a rate of interest for a loan by a lending institution?
Accept the loan but pay it off early.
Ask the lending institution to lower its rates.
Notify the lending institution about state usury laws.
Notify the local Better Business Bureau.
Which type of financial institution usually pays the highest rate of interest on savings account balances?
Savings and loan associations
Investment firm money market accounts
A person is convinced that a lending institution is charging too much interest for a loan. This person should be aware that
there are state usury laws
lending institutions all have their rates of interest set by the SEC
interest rates depend entirely on the borrower's ability to pay back the loan
the Federal Trade Commission has law against intimidating borrowers
For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive
one-fifth of the $20,000 face value.
$20,000 less the premiums paid.
a calculated amount of money which includes the premiums paid as well as the interest on that money.
a calculated amount of money that must be converted to a term life insurance policy.
A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?
"l think I need a personal property floater."
"I think I should get speculative risk insurance."
"I will deduct the cost of the jewelry from my premium."
"I realize that if this jewelry is stolen it will be considered vicarious liability."
A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance?
To reduce the premium on the homeowner's insurance.
To protect the person who owns the television from liability for damages.
To show the insurance company a good faith investment has been made.
To cover the cost of replacement should the television get damaged or stolen.
Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments?
State motorist coverage
Uninsured or no-fault motorist coverage
Insolvent motorist coverage
Auto liability coverage
Which of the following insurance covers vehicles?
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