Financial Math - Fall Semester Exam - 2024 (Review)

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What are short-term capital gains?

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Short-term capital gains are profits from the sale of assets held for one year or less, taxed at ordinary income tax rates.

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What are long-term capital gains?

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Long-term capital gains are profits from the sale of assets held for more than one year, taxed at reduced rates compared to ordinary income.

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What is a deposit in banking?

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A deposit is money placed in a bank for safekeeping.

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What is overdraft protection?

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Overdraft protection is a banking service that allows an account holder to withdraw more money than is available in their account, preventing bounced checks.

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What did the 16th Amendment to the U.S. Constitution accomplish?

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The 16th Amendment allowed the federal government to collect income taxes.

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What is the purpose of health insurance?

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Health insurance helps cover medical expenses, providing financial protection against high healthcare costs.

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What is life insurance?

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Life insurance is a contract that pays a designated beneficiary a sum of money upon the insured person's death.

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How do you calculate total job benefits?

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Total job benefits are calculated by adding the monetary value of all benefits provided by the employer, such as health insurance, life insurance, and paid time off.

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What is the formula for calculating gross pay?

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Gross pay is calculated by summing all earnings before deductions, including salary, bonuses, and benefits.

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What is a stop-payment order?

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A stop-payment order is a request to a bank to not process a specific check or payment.