WorksheetsW!SE Review #3
Total questions: 25
Worksheet time: 13mins
A person may be entitled to a tax refund if she:
had capital gains
earned more money this year
collected her stock dividends last year that were not taxed
had more taxes deducted from her pay than necessary
The price paid to a lender for borrowing money is called the:
Principal
Premium
Loan Balance
Finance Charge
A person has $300 a month transferred from his checking account to a creditor to make a loan payment. This is an example of a(n):
Installment purchase
Electronic funds transfer (EFT)
ATM transaction
Credit card transaction
It is advisable to avoid lending money to a friend or relative unless the person:
Has a promissory note signed by the borrower in the presence of a witness
Give the money to the borrower in cash
Deducts taxes from the amount being borrowed before giving the money
Checks that the borrower is employed before giving the loan
Use the information about the company, American Railroads Inc. to determine what the 52-week stock price indicates.
The highest and the lowest price of the stock during the past 52 weeks
The highest and the lowest price paid for the stock 52 weeks ago
The lowest and the highest price that the stock is permitted to sell for
The highest and lowest price predicted for the stock in the next 52-week period
A person buys a home for $300,000. The person makes a down payment of $100,000 at the time of purchase and has a mortgage for $200,000. How much mortgage insurance is advisable?
$100,000
$200,000
$250,000
$300,000
The possibility that a borrower will fail to repay a loan on time and will not be able to repay the loan is known as the:
Interest rate risk
Credit risk
Default
Investment risk
When interest rates are low, it is a good time to:
Sell stocks
Keep savings in a safe deposit box
Take out a fixed-rate car loan
Place money into a certificate of deposit (CD)
A person will generally AVOID buying investment products if she:
Is interested in building wealth
Need the money to be liquid
Wants to make money quickly
Has a stock portfolio
Using a credit card creates:
Wealth
Debt
Capital gains
Income
A person who wants money to be FDIC insured, will probably deposit the money in a:
Money market mutual fund at an investment firm
Bank issued life insurance policy
Certificate of Deposit (CD) at a bank
Credit Union savings account
Which of the following individuals is most likely to be approved for a $5,000 bank loan?
A person with liabilities of $3,000 and assets of $250
A college graduate earning $50,000 and a credit score of 480
A college graduate earning $65,000 with loans totaling $10,000 and a history of making payments on time
A person with assets of $100,000, annual income of $50,000, and $250,000 in loans
The Federal Reserve Bank (Fed) can help stimulate the economy by:
Initiating trade agreements
Influencing a decrease in interest rates
Granting mortgages
Auditing income tax returns
A person has not made a mortgage payment for the past two years. The current value of his house is $250,000 and his mortgage balance is $100,000. What is the bank likely to do?
Sell his car
Close his bank accounts
Repossess the house to sell
Have the homeowner file bankruptcy and foreclose the house
Buying a treasury bill (T-bill) is best for investors who are looking for a(n):
Place to invest between $5 - $25
Secure, low risk investment
Higher yield on their investment than corporate bonds offer
Investment that matures in 10-30 years
A collateralized loan is a personal loan that is:
Available online for high interest rates
Available for college tuition
Secured by credit cards
Secured by an asset that can be sold
Before a public corporation can issue stocks or bonds, it must register the issue with:
its Board of Directors
the Federal Reserve Bank (Fed)
the Internal Revenue Service (IRS)
The Securities and Exchange Commission (SEC)
The main purpose of requiring a cosigner on a loan is to:
Limit a lender's collateral requirement
Limit a borrower's capacity requirement
Secure the loan if the lead borrower defaults
Expand the bank's lending capacity
What is the advantage of an adjustable-rate mortgage (ARM)?
Monthly payments may be lower than other mortgages
There are fewer payments a year than other mortgages
It is usually easier to qualify for than other loans
It offers protection from default or bankruptcy
People who are retired and living on limited fixed incomes should:
Reduce their exposure to risk
Make risky investments
Keep money in one investment
Keep money in savings at a bank
A high school student just got a part-time job. In order to take advantage of direct deposit being offered by the employer, this student needs to have an account at a(n):
Brokerage firm
Bank
Insurance company
Adolescent Credit Union
Checking account overdraft protection at a bank is an optional service that is:
Provided free to all customers without cost when used
A short-term loan with a high rate of interest
For low-income account holders
For customers over age 65
The primary purpose of check cashing businesses is to:
Offer a service for people without a bank account
Discourage the use of credit cards
Provide cash for a retail gift card
Exchange foreign currency
A person received a total of $100 in dividends from his stock this year. This income must be reported to the:
Federal Reserve Bank (Fed)
Internal Revenue Service (IRS)
Securities and Exchange Commission (SEC)
U.S. Treasury
All of the following products help to create wealth EXCEPT owning:
Property
Securities with dividends
A personal retirement fund
Health insurance
