WISE PRACTICE TEST #2

short term loans sold to operate the U.S. government. Amounts range from $1,000 to $5 million per investor. Also known as T-Bills.

• Treasury Bills

• pension

• corporate bond

An account that an employee uses to save for retirement. This account allows the worker to defer current income taxes on the saved money and interest earnings until he or she withdraws the money. Different from a pension where it is sponsored by the employer.

• 401 k

• pension

• premium

• mutual find

The key difference between Roth IRA and traditional IRAs lies in the timing of their _________ advantages: With traditional IRAs, you deduct contributions now and pay _________ on withdrawals later; with Roth IRAs, you pay taxes on contributions now and get tax-free withdrawals later.

• tax, premiums

• tax , taxes

• tax, nothing

Inflation is the general rise in price of goods and services over time. Who suffers during inflation?

• people living on a fixed income, people trying to save

• people living on a fixed income, people trying to save, creditors

• lenders

A security is another name for any investment that can be traded on a stock market. Examples would be

• stocks, bonds, mutual funds

• stocks, bonds, auto insurance

• stocks, bonds, mutual funds, insurance premiums

• stocks, bonds, mutual funds, secured loans

Is an independent federal agency that holds primary responsibility for regulating consumer protection with regard to financial products and services in the U.S.

• The SEC

• The Fed

• The CFPB-Consumer Financial Protection Bureau

• The FDIC

Another word for profit sharing done by companies. Shareholders receive this separate from the money they make off of a stock.

• premium

• securities

• dividend

• inflation

The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

• premium split

• securities

• stock split

tax commonly applied to profits from selling an asset you've held for less than a year.

• capital gains

• dividend

• stock split

Which of the following is considered open-end credit?

• mortgage

• car loan

• department store charge card

• installment loan