PFLit

Which of the following statements is true of legally binding contracts:

• Breaking one results in a lawsuit and possibly jail time.

• They are not valid unless written.

• They clearly outline both sides of an agreement.

• They are enforceable for legal and illegal acts.

Pedro Sanchez works as a loan processor for the MON Company, which is located in Smithsville. Pedro has recently approved an application to extend a $10,000 line of credit to Mrs. Jones. Who is the creditor in this situation?

• MON Company

• Pedro Sanchez

• Mrs. Jones

• City of Smithsville

One of the aims of regulating the insurance industry is to

• reduce the risk of gaps in coverage.

• raise insurance prices.

• create challenges for insurance agents.

• make coverage more exclusive.

Regulatory agencies in the security and investment industry aim to keep markets fair by

• banning illegal insider trading.

• requiring corporate taxes.

• preventing hiring discrimination.

• prohibiting misleading advertisements.

Financial managers who are legally responsible for their clients' investments must demonstrate fiduciary responsibility, which involves

• making risky investments without their clients' knowledge.

• selling financial products that generate the highest commissions.

• acting in the best interests of their clients.

• speaking with their clients once a year to review their portfolios.

Jana Rockford works at Main Street Savings and Loan. As a teller, what is one of Jana's job responsibilities?

• Making commodities trades on behalf of her clients

• Managing her customers' retirement funds

• Telling her customers about banking products

• Processing payroll for business clients

Jonathan, an insurance agent, explains both the pros and cons of his products to all of his customers to help them decide which policies to purchase. Hank, also an insurance agent, explains to his customers why they should purchase his products, but he doesn't talk about anything negative before making a sale. Based on this information, which agent is more likely to retain and grow his client base?

• Jonathan, because his customers feel that they can trust him.

• Jonathan, because he gives his customers too much information.

• Hank, because he doesn't scare his customers away.

• Hank, because he is a very optimistic, upbeat person.

What type of economic resource is being described in the following situations: salespeople waiting on customers, managers instructing employees, and insurance agents selling policies?

• Capital

• Limited

• Human

• Natural

The desire for an item that has monetary value is a(n) _________ want.

Societies must decide how to allocate their scarce resources between the production of

• capital and consumer goods.

• domestic and foreign products.

• simple and complex items.

• machine and handmade goods.