C07 Personal Finance Online Exams 1-8 Answers (Ashworth College)

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C07 Personal Finance Online Exams 1-8 Answers (Ashworth College)

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C07 Personal Finance Online Exams 1-8 Answers (Ashworth College)

Part 1 of 1 –

100.0/ 100.0 Points

Question 1 of 20

5.0/ 5.0 Points

A complete financial plan contains all of the following categories except __________ .

A. managing liquidity

B. budgeting and tax planning

C. investing money

D. spiritual training

Question 2 of 20

5.0/ 5.0 Points

Cash flows are affected by financial planning decisions. Which of the following is correct?

A. Car payments you make are cash outflows.

B. Your routine monthly expenses are cash inflows.

C. Investments you make in stock are cash inflows.

D. Your income is a cash outflow.

Question 3 of 20

5.0/ 5.0 Points

__________ allows access to funds to cover any short-term cash deficiencies.

A. Investment

B. Money

C. Liquidity

D. Risk

Question 4 of 20

5.0/ 5.0 Points

Your net worth will not be increased by which of the following actions?

A. increasing your savings from 10% to 15% of your earnings

B. a $100.00 birthday present from your grandmother

C. receiving an inheritance

D. buying a new stereo system and putting the entire amount on your credit card

Question 5 of 20

5.0/ 5.0 Points

By establishing high and unrealistic financial goals, you will probably __________ .

A. become discouraged and lose interest in planning

B. impress your spouse or significant other

C. increase the viability of your plan

D. improve the likelihood of achieving at least some success

Question 6 of 20

5.0/ 5.0 Points

“Big spenders” focus their budgeting decisions on __________ .

A. reducing expenses

B. increasing income

C. spending most of their income

D. saving most of their income

Question 7 of 20

5.0/ 5.0 Points

The best measure of a person’s or family’s net wealth is __________ .

A. their tax bracket

B. the value of what they own minus the value of what they owe

C. the amount of annual income

D. the highest level of education received

Question 8 of 20

5.0/ 5.0 Points

Insurance planning is not designed to protect your wealth in which of the following ways?

A. protecting the assets that you own

B. limiting your exposure to potential liabilities

C. protecting your income

D. downturns in the stock market

Question 9 of 20

5.0/ 5.0 Points

Which of the following is an example of money management?

A. putting your money in a passbook account at your bank

B. shopping around for the credit card with the best interest rate

C. deciding to delay buying a new car until you can pay cash

D. paying off a loan early to reduce the interest charges

Question 10 of 20

5.0/ 5.0 Points

After your financial plan is developed it should be __________ .

A. reviewed every five years

B. sold to others

C. monitored and updated annually

D. locked in a safe for keeping so it isn’t stolen

Question 11 of 20

5.0/ 5.0 Points

Which of the following is a credit management decision?

A. purchasing a used car with cash

B. investing your savings in the stock market

C. obtaining a student loan to attend college

D. putting money into your retirement account

Question 12 of 20

5.0/ 5.0 Points

__________ management involves decisions regarding how much money to retain in a liquid form and how to allocate funds among short-term investment instruments.

A. Investment

B. Money

C. Credit

D. Liquidity

Question 13 of 20

5.0/ 5.0 Points

A personal financial plan specifies financial goals and describes __________ .

A. spending, saving, and credit card financing

B. saving, investing, and asset valuation

C. saving and spending only

D. spending, financing, and investment plans

Question 14 of 20

5.0/ 5.0 Points

Jessie has $4,000.00 in a bank account, $2,800.00 in a 401(k. plan at work, a car with a current value of $28,000.00, and a house that she purchased for $92,000.00 that has a current value of $118,000.00. The current balance of her home mortgage is $81,000.00, she has one credit card with a $3,000.00 balance, and a school loan with a balance of $6,000.00. What is Jessie’s current net worth?

A. ($62,800.00.

B. ($242,800.00.

C. $62,800.00

D. $46,800.00

Question 15 of 20

5.0/ 5.0 Points

__________ is the process of forecasting future expenses and savings.

A. Budgeting

B. Planning

C. Predicting

D. Fortune-telling

Question 16 of 20

5.0/ 5.0 Points

Josh has decided to take a course at the local community college that could help him get a promotion at work. The course begins at 5 p.m. and goes until 9 p.m. on Monday nights. Josh normally works until 5 p.m. each day, but because of the drive time to the community college, he will need to leave work at 3 p.m. on class days. Josh currently earns $18.50 per hour. His employer contributes 10% of Josh’s gross earnings to a 401(k.. If the class meets 16 times, what is Josh’s total opportunity cost for the class?

A. None

B. $800.00

C. $592.00

D. $651.20

Question 17 of 20

5.0/ 5.0 Points

The act of determining how wealth will be distributed before or upon death is __________ .

A. not needed for most people

B. estate planning

C. liquidity planning

D. retirement planning

Question 18 of 20

5.0/ 5.0 Points

From a financial standpoint when should a person start retirement planning and saving?

A. when he or she first starts receiving a salary

B. at 45-50 years of age

C. at 50-55 years of age

D. at 55-60 years of age

Question 19 of 20

5.0/ 5.0 Points

Your financial plan is usually strongly influenced by __________ .

A. your parents

B. your tolerance for risk and your self-discipline

C. your peers

D. your age

Question 20 of 20

5.0/ 5.0 Points

Which of the following would be classified as a short-term goal?

A. buying new clothes this month

B. paying for your two-year-old child’s college education

C. purchasing a house in three years

D. retiring in ten years

Part 1 of 1 –

85.0/ 100.0 Points

Question 1 of 20

5.0/ 5.0 Points

The concept of time value of money is important to financial decision making because __________ .

A. it emphasizes earning a return of interest on the money you invested

B. it recognizes that $1.00 today has more value than $1.00 received a year from now

C. it can be applied to future cash flows in order to compare different streams of income

D. all of these

Question 2 of 20

5.0/ 5.0 Points

A personal balance sheet summarizes __________ .

A. cash inflows and outflows

B. assets, liabilities, and net worth

C. assets, net worth, and income

D. income and expenses

Question 3 of 20

5.0/ 5.0 Points

The filing status that yields the largest standard deduction per taxpayer is __________ .

A. married, filing separately

B. married, filing jointly

C. single individual

D. head of household

Question 4 of 20

5.0/ 5.0 Points

The best measure of a person’s or family’s wealth is __________ .

A. the amount of salary earned annually

B. net worth

C. the total dollar value of investment assets

D. the market value of real estate including the personal home

Question 5 of 20

5.0/ 5.0 Points

An ordinary annuity can be defined as __________ .

A. a lump sum

B. a series of unequal payments at the beginning of each period

C. intermittent payments for ordinary expenses

D. a series of equal payments at the end of each period

Question 6 of 20

0.0/ 5.0 Points

Aaron wants to put $200.00 per month into an IRA account at 15% for four years. What is he solving for using his financial calculator?

A. present value

B. future value

C. interest rate

D. payment

Question 7 of 20

5.0/ 5.0 Points

A person’s net worth would increase as a result of __________ .

A. reducing earnings

B. increasing spending on current living expenses

C. reducing amounts owed to others

D. decreasing the value of assets

Question 8 of 20

5.0/ 5.0 Points

Which of the following decisions would involve the use of the present value of $1.00?

A. You win a lawsuit and are offered a lump sum payment today of $100,000.00 or $15,000.00 a year for 20 years.

B. You want to have $1,000,000.00 to retire at age 55, but you need to know how much you will need to deposit each year from now until your 55th birthday.

C. Your brother buys your car and offers to pay you $500.00 now or $1,500.00 in two years.

D. Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a $7,000.00 cruise when you graduate from college in four years.

Question 9 of 20

5.0/ 5.0 Points

How much must you invest today at 8% interest in order to see your investment grow to $15,000.00 in 10 years?

A. $7,620.00

B. $7,500.00

C. $6,945.00

D. $6,330.00

Question 10 of 20

5.0/ 5.0 Points

Melanie, a homeowner, has mortgage interest of $3,000.00, real estate taxes of $1,500.00, and charitable contributions of $500.00. According to her filing status, a standard deduction of $5,950.00 is allowed. How much should Melanie deduct on her tax return?

A. $5,000.00

B. $6,700.00

C. $7,700.00

D. $5,950.00

Question 11 of 20

5.0/ 5.0 Points

Which of the following usually affects cash inflows the most?

A. your job skills

B. your personal consumption behavior

C. the size of your family

D. the education and income of your parents

Question 12 of 20

5.0/ 5.0 Points

The cash flow statement reports a person’s or family’s __________ .

A. current income and payments

B. net worth

C. plan for borrowing

D. value of investments

Question 13 of 20

5.0/ 5.0 Points

To compute how much you would need to save each year for the next 25 years to allow you to withdraw $20,000.00 for the following 30 years, you would need to use the __________ .

A. future value of an annuity

B. present value of an annuity

C. both future and present value of an annuity

D. both present and future value of $1.00

Question 14 of 20

5.0/ 5.0 Points

Jim has $1,000.00 income from his job and $200.00 stock dividend income this month. This month Jim has rent and utilities of $300.00, and he spent $300.00 on groceries and $200.00 on clothing. What is his cash inflow this month?

A. $500.00

B. $1,200.00

C. $400.00

D. $600.00

Question 15 of 20

0.0/ 5.0 Points

If you invest $12,000.00 today at an interest rate of 10%, how much will you have in 10 years?

A. $31,128.00

B. $13,860.00

C. $25,940.00

D. $40,712.00

Question 16 of 20

5.0/ 5.0 Points

The state lottery has just informed you that you have won $1 million to be paid out in the amount of $50,000.00 per year for the next 20 years. With a discount rate of 12%, what is the present value of your winnings?

A. $392,150.00

B. $398,150.00

C. $373,450.00

D. $221,950.00

Question 17 of 20

5.0/ 5.0 Points

Balance sheet assets should be valued at __________ .

A. replacement value

B. fair market value

C. original purchase price

D. insured value

Question 18 of 20

5.0/ 5.0 Points

An allowable amount which taxpayers can claim for themselves and dependents is called a(n. __________ .

A. deduction

B. exemption

C. exclusion

D. allowance

Question 19 of 20

0.0/ 5.0 Points

Which tax form is generally used by a taxpayer whose filing status is married, who has no dependents, and whose taxable income is less than $100,000.00?

A. 1040

B. 1040 A

C. 1040 EZ

D. 1040 X

Question 20 of 20

5.0/ 5.0 Points

Which of the following taxes is only paid on the first $110,100.00 of your salary?

A. federal income tax

B. Medicare tax

C. social security tax

D. all of the above

Part 1 of 1 –

90.0/ 100.0 Points

Question 1 of 20

5.0/ 5.0 Points

Which of the following will not help you establish a good credit history?

A. paying your phone bill on time

B. financing a car and making payments on time

C. making as many purchases as possible with cash

D. never exceeding your credit limit on your credit card

Question 2 of 20

5.0/ 5.0 Points

__________ risk is the risk that a borrower may not repay on a timely basis.

A. Credit

B. Interest rate

C. Liquidity

D. Asset

Question 3 of 20

0.0/ 5.0 Points

Which of the following is true with regards to rising interest rates?

A. Use long-term loans to take advantage of current low rates.

B. The term of the loan option is not impacted by rising interest rates.

C. Use short-term loans to take advantage of low interest rates.

D. Select long-term savings options to lock in current interest rates.

Question 4 of 20

5.0/ 5.0 Points

When considering the annual percentage rate (APR., which of the following is not true?

A. It is a simple interest rate for borrowing money for a year.

B. It requires a complex formula to compute.

C. It includes fees such as application processing fees.

D. It allows easy comparison of financing costs among various creditors.

Question 5 of 20

5.0/ 5.0 Points

The minimum credit score required by financial institutions __________ .

A. is 550

B. is 500

C. is 600

D. varies by institution

Question 6 of 20

5.0/ 5.0 Points

Your great aunt Mary passed away and left you and inheritance of $5,000.00. Since you don’t have a need for the money in the near future, which of the following would be the best place to put the $5,000.00?

A. a savings account earning 1% interest

B. a checking account

C. high risk stock in a producer of natural gas that is predicted to triple in the next year

D. a five-year CD paying 4.38% annually

Question 7 of 20

5.0/ 5.0 Points

The interest rate is composed of the __________ and the __________.

A. risk-free rate; risk discount

B. risk-free rate; risk premium

C. risk-free rate; default risk premium

D. none of the above

Question 8 of 20

5.0/ 5.0 Points

The Identity Theft and Assumption Deterrence Act has designated which federal agency as the central clearinghouse for all identity theft complaints?

A. FBI

B. FTC

C. CIA

D. WPA

Question 9 of 20

5.0/ 5.0 Points

In saving or investing, the __________ the risk, the __________ the return.

A. higher; higher

B. lower; lower

C. higher; lower

D. A and B

Question 10 of 20

5.0/ 5.0 Points

The law that prohibits denying credit due to gender, age, race, natural origin, religion, or marital status is __________ .

A. Equal Credit Opportunity Act

B. Fair Treatment of Borrowers Act

C. Fair Labor Standards Act

D. Fair Isaac Act

Question 11 of 20

5.0/ 5.0 Points

Credit card companies’ fees cannot exceed __________of the initial credit limit.

A. more than 5%

B. more than 25%

C. more than 50%

D. more than 10%

Question 12 of 20

0.0/ 5.0 Points

Which of the following may result in much of your personal financial information becoming part of the public record?

A. marriage

B. applying for financial aid at a college

C. divorce

D. purchasing a house with a mortgage

Question 13 of 20

5.0/ 5.0 Points

The item that receives the most weight in the FICO credit scoring system is __________ .

A. credit payment history

B. credit utilization

C. credit inquiries

D. the amount of credit used each month

Question 14 of 20

5.0/ 5.0 Points

The yield curve is typically __________, meaning that the annualized interest is higher for debt securities with longer terms to maturity.

A. upward sloping

B. vertical

C. downward sloping

D. horizontal

Question 15 of 20

5.0/ 5.0 Points

Some credit card companies will waive the annual fee on a credit card if __________ .

A. you pay your bills in a timely manner

B. you carry a large balance from month to month

C. you use the card infrequently

D. Credit card companies never waive annual fees

Question 16 of 20

5.0/ 5.0 Points

If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone call, they are __________ .

A. shoulder surfing

B. dumpster diving

C. pretexting

D. skimming

Question 17 of 20

5.0/ 5.0 Points

A(n. __________ card allows you to pay for a purchase at a later time when the bill arrives.

A. debit

B. ATM

C. credit

D. expense

Question 18 of 20

5.0/ 5.0 Points

The market where an investor could sell T-bills that he owns is called the __________ .

A. primary market

B. secondary market

C. stock market

D. T-bill market

Question 19 of 20

5.0/ 5.0 Points

Credit cards are generally used for such purchases as __________ .

A. cars

B. homes

C. meals, clothing, and groceries

D. stocks

Question 20 of 20

5.0/ 5.0 Points

Risk management of money market investments involves all of the following except __________ .

A. interest rate risk

B. potential for default when backed by the federal government

C. liquidity risk

D. credit risk

Part 1 of 2 – Lesson 4 Questions

50.0/ 50.0 Points

Question 1 of 40

2.5/ 2.5 Points

The Truth-in-Lending Act (1969. requires which of the following?

A. disclosure of only interest charges but no other fee

B. adherence to the interest rates established by the Federal Reserve

C. specifying a standard loan rate

D. all of the above

Question 2 of 40

2.5/ 2.5 Points

Which of the following is a true statement about student loans?

A. All student loans are provided directly to the student.

B. Interest payments are often deferred until the students graduate and enter the workforce.

C. Interest is tax-free to those in all income levels.

D. All student loans are provided to parents of students.

Question 3 of 40

2.5/ 2.5 Points

Annual property taxes for homes are usually __________ .

A. less than 0.5% of the home value

B. 0.5% to 1% of the home value

C. greater than 2% of the home value

D. 1% to 2% of the home value

Question 4 of 40

2.5/ 2.5 Points

A mortgage where the interest owed changes in response to movements in a specific market-determined interest rate is called a(n. __________ .

A. HELOC

B. fixed-rate mortgage

C. adjustable-rate mortgage

D. second mortgage

Question 5 of 40

2.5/ 2.5 Points

Rick needs an advance on his $600.00 bi-weekly paycheck. He goes to Cash King where he writes them a check for $690.00 and dates the check two weeks from today. The cost of financing Rick’s payday loan is __________ .

A. 521%

B. 261%

C. 547%

D. 391%

Question 6 of 40

2.5/ 2.5 Points

All of the following are true of a home equity loan except it __________ .

A. provides you a line of credit

B. is a good way to combine different kinds of debt

C. may be tax deductible

D. allows you to borrow up to 80% of the market value of your home

Question 7 of 40

2.5/ 2.5 Points

The schedule that discloses the monthly payment that you will make, based on a specific mortgage amount, a fixed interest rate level, and maturity is called a(n. __________ .

A. depreciation schedule

B. payment table

C. amortization table

D. obligation schedule

Question 8 of 40

2.5/ 2.5 Points

Having a longer term loan __________ .

A. gives you access to additional sources of financing

B. makes your monthly payments larger

C. is almost always the best alternative for credit users

D. costs you more interest and therefore increases the cost of your loan

Question 9 of 40

2.5/ 2.5 Points

The most favorable car financing is that of __________ .

A. commercial banks

B. credit unions

C. car dealers

D. There is no one best deal every time; it pays to shop around.

Question 10 of 40

2.5/ 2.5 Points

All of the following are reasons to avoid payday loans except __________ .

A. You don’t want to pay interest on your credit card that charges an annual rate of 18%

B. The cost of financing with a payday loan is exorbitant

C. You may still not have sufficient cash after covering the loan

D. The use of payday loans can create a continual cycle of borrowing

Question 11 of 40

2.5/ 2.5 Points

If you always drive cars many miles and keep them for 10 years, it would probably be best to __________ .

A. lease a new car

B. buy a new car

C. lease a used car

D. buy a used car

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