L.M. Test Corrections

Which of the following is your right as a shareholder of common stock?

• The right to set interest rates

• The right to guaranteed dividends

• The right to receive dividends if paid

• The right to fixed returns

What is the chief reason corporations issue stock?

• To increase employee wages

• To gain government control

• To raise money for the corporation

• To avoid paying taxes

Consumer finance companies, which are often advertised on TV, are also known as:

• Investment banks

• Credit unions

• Small loan companies

• Mortgage brokers

Debbie was behind on her stereo installment credit contract payments. As a result, the creditor seized and sold the stereo. The sale price did not cover all of the loan balance, the creditor got a court to order her employer to withhold part of her wages. This court order is called:

• Foreclosure

• Wage deduction

• Bankruptcy

• Garnishment

Which of the following investment products is guaranteed by the federal government?

• Corporate bonds

• Mutual funds

• U.S. Treasury Notes

• Municipal bonds

Which financial product may pay a dividend?

• Certificate of Deposit

• Savings Account

• Common Stock

• Life Insurance Policy

A credit card finance charge is:

• A penalty for not paying your bill on time

• A fee for lost cards

• The dollar amount it costs to use credit

• The annual membership fee

Dalton lost her debit card. She reported it missing within two days. If an unauthorized person used her debit card, her maximum liability is:

• $0

• $50

• $100

• $500

The purpose of insurance is not to:

• Manage financial risks

• Cover losses from accidents

• Diversify an investment portfolio

• Help pay for unexpected expenses

“The Fed” is short for:

• Federal Employment Department

• Federal Reserve System

• Federal Education Department

• Federal Economic Division