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SIFD: 1st MP Review

Total questions: 38

Worksheet time: 15mins

Name
Class
Date
1.

The central banking system of the U.S. that controls money supply and interest rates (sets prime rate)

a)

U.S. Bank

b)

Bank of America

c)

U.S. Treasury

d)

Federal REserve

2.

Cody lost a $50 bet on the Yankees in the playoffs; the $50 he could of saved or invested wisely represents his

a)

profit

b)

opportunity cost

c)

compound interest

d)

consumable good

3.

Which of the following is the best example of a depreciating asset

a)

car

b)

house

c)

CD (certificate of deposit)

d)

401k

4.

Which of the following is an example of an intermediate financial goal for a recent graduate?

a)

Save for a trip to Florida next spring break

b)

To buy a home by age 30

c)

To repay your student loan in 5 years

d)

To marry someone wealthy

5.

Which of the following is a common calculation used to determine approximately how long it will take to double your money? 

a)

= 72 / interest rate

b)

Investment / 50

c)

α2+b2 = c2\alpha^2+b^2\ =\ c^2

d)

There is no such calculation

6.

Which of the following would be considered saving rather than investing?

a)

buying shares of stock

b)

gambling

c)

putting money into a CD

d)

participating in an employer sponsored 401k

7.

Aiden is an agent for Roda Real Estate, he earns 3% of the sale price for each home he sells; this type of compensation is known as

a)

wage

b)

salary

c)

commission

d)

bonus

8.

You worked 10 hours last week and you earn $10 an hour. Your deductions from your paycheck last week included: FICAA $8, Fed Tax $10, and State Tax $2. What is your net pay?

a)

$120

b)

$100

c)

$88

d)

$80

9.

Being paid by your job every two weeks is known as

a)

biweekly

b)

semi-monthly

c)

weekly

d)

pay day

10.

A budgeting method where your first priority is to put money into your savings, followed by paying your monthly expenses, and have the remainder as your fun money.

a)

Go big or go home

b)

Envelope method

c)

Zero-based budget

d)

Pay yourself first

11.

Which type of financial institution is most likely to pay a higher interest rate on a savings account than the others?

a)

online bank (such as Discover or Ally)

b)

Credit Union (such as LFCU)

c)

Traditional Savings & Loan (such as Northwest Bank)

d)

The Federal Reserve

12.

The 30 in the 50/30/20 budgeting method is money put toward

a)

your wants

b)

your savings

c)

your essentials

d)

eating out

13.

What does the zero "mean" in the zero-based budget?

a)

You spend your entire check for the next check comes in.

b)

Every dollar coming in is accounted (planned) for.

c)

Zero dollars are put into savings.

d)

You have no budget at all.

14.

When creating a budget, it is recommended to start with

a)

your financial goals.

b)

a time period for the budget.

c)

your income for the period.

d)

your expenses for the period.

15.

A budgeting method that involves setting aside cash for a variety of different expenses and savings is known as

a)

financial planning

b)

the envelope method

c)

paying yourself first

d)

the many piles method.

16.

A personal retirement account that money is invested "after" tax and is not taxable when distribution taken.

a)

403b

b)

FSA

c)

Roth IRA

d)

401k

17.

A retirement account where your private employer matches your contributions up to to a certain amount.

a)

401k

b)

IRA

c)

403b

d)

529 Account

18.

A type of expense that the amount paid is consistent from month to month.

a)

fixed expense

b)

variable expense

c)

periodic expense

d)

revolving expense

19.

A type of expense that is paid quarterly, semi-annually, or annually.

a)

fixed expense

b)

variable expense

c)

revolving expense

d)

periodic expense

20.

What is a tax “advantaged” savings account that allows those with a high deductible insurance plan to save pre-tax dollars for qualified medical expenses in the future?

a)

529 Account

b)

Certificate of Deposit

c)

HSA (health savings account)

d)

FSA (flexible savings account)

21.

If your employer does not offer a 401k plan and you believe that you will be in lower tax bracket when retired it is recommended to invest in

a)

penny stocks

b)

IRA

c)

529 Account

d)

Social Security

22.

Which of the following could NOT be a source of income for a retiree?

a)

Social Security

b)

Pension

c)

529 Account

d)

IRA

e)

401k

23.

Which of the following would be considered the least risky investment?

a)

Blue chip stock

b)

Stock with a Beta # of 2.2

c)

an IPO

d)

Penny stock

24.

A company with a market capitalization of $1.76 trillion is considered a

a)

small cap stock

b)

mid cap stock

c)

large cap stock

d)

risky investment.

25.

What is an advantage of an online brokerage account (similar to our stock simulation in class)

a)

Expert advice is included

b)

High commissions paid

c)

Low fees per transaction

26.

A company that reinvests its' profits back into the company rather than sharing the profits with its' stockholders is known as a

a)

penny stock.

b)

income stock.

c)

cyclical stock.

d)

growth stock.

27.

Overall, this type of stock is considered the most risky. The companies tend to be new, have a low market cap, and unstable sales.

a)

mid-cap stocks

b)

defensive stocks

c)

penny stocks

d)

income stocks

28.

I see as stock that I believe is about to take off and want to purchase it now before the price increases, I would enter a __ order.

a)

buy - limit

b)

market

c)

stop

d)

express

29.

The market is on the decline, I hold a stock that I've made a reasonable profit on and I want to sell it before the fall in the market cuts into my profit, I should enter a __ order

a)

stop

b)

sell limit

c)

buy limit

d)

market

30.

The current price of a stock is at $27.50; I would like to get it at if the price dips to $26.00 but don't want to sit and watch the price, I should enter a __ order.

a)

buy-limit

b)

sell-limit

c)

market

d)

conservative

31.

When a stock is offered to the public for the very first time, it is known as a(n)

a)

flash sale

b)

IPO (initial public offering)

c)

blue chip stock

d)

ISO (intial stock offering)

32.

The Dow Jones Industrial Average, S&P 500, and the NASDAQ composite are all examples of

a)

security exchanges

b)

primary markets

c)

sound investments

d)

market indexes

33.

The total value of all stocks and bonds issued by a corporation is reflected as their

a)

market capitalization.

b)

beta number.

c)

earnings per share.

d)

PE ratio.

34.

This classification of stock tends to remain more stable during a down economy.

a)

growth stock

b)

cyclical stock

c)

defensive stock

d)

stock split

35.

Income stocks tend to pay __ regularly.

a)

interest

b)

preferred shares

c)

commissions

d)

dividends

36.

When the market is performing well and investors are feeling good it is known as a __ market. On the other hand when the market is on the decline and investors are pessimistic is is called a __ market.

a)

bear / bull

b)

bull / bear

37.

The price of a stock in the secondary market is ultimately determined by

a)

the Dow.

b)

analysts reports.

c)

the company's board of directors.

d)

what a buyer is willing to pay.

38.

A stock is a type of security that represents a share of ownership in a corporation.

a)

False

b)

True