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Laurent saves money from his lawn service to buy a new $20,000 mower and trailer. He would like to buy the new equipment as soon as possible but only has $12,000 in his simple interest savings account. To reach his goal sooner, Laurent should:

• Keep his money where it is and be patient

• Move his money to an IRA or Certificate of Deposit

• Move his money to a compound interest account

• Move his money to a business checking account

If an investor possesses a portfolio heavily concentrated in futures, a financial advisor would most likely suggest adding which conservative investment to diversify the portfolio?

• Certificates of deposit

• Futures

• Stocks

• Bonds

Which of these is an example of indirect tax?

• Corporate income tax

• Gasoline tax

• Paycheck withholdings

• Property tax

Who would pay the most as a percentage of income under a progressive tax?

• Lawyer earning $110,000 per year

• Teacher earning $45,000 per year

• CEO earning $2.5 million per year

• Roofer earning $18,000 per year

Nina wants to start her own academic editing business. She has constructed a one-year budget plan, including the cost of a website, her professional association subscriptions, and printing costs. Which of the following should she also include in her plan?

• A list of potential clients

• A list of subscription costs for sci-fi Web zines

• A payment plan for her outstanding library fines

• A payment plan for a new laptop

Which type of credit is usually used for cars, mortgages, and student loans?

• consumption credit

• installment credit

• secured credit cards

• service credit

Which of the following actions would likely raise homeowner's insurance premiums?

• Building the home in the floodplain of a river

• Installing a monitored alarm system

• Living in a safe neighborhood with little crime

• Choosing not to install a swimming pool

You earn $50,000 per year, and the federal tax rate is 10 percent. Your gross income is

• $5,000

• $10,000

• $45,000

• $50,000

If the Federal Reserve lowers the federal funds rate, what will happen to bank savings accounts?

• The interest rate offered would decrease

• The interest rate offered would increase

• The interest rate will automatically be set to zero

• The interest rate will remain the same

Calliope is in her mid-30s and wants to start saving for retirement. She wants to invest a portion of her income, but she's wary of high-risk options. How should she best allocate her investment funds?

• Bonds and mutual funds

• Mutual funds and futures

• Stocks and bonds

• Stocks and futures