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WISE Practice Test- Flash cards WITH 00- C0RRECT ANSWERS
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EUNICEWISE Practice Test- Flash cards WITH 100% SURE ANSWERS
Terms in this set (89)
Question : To qualify for a Federal Housing C: fulfill income guidelines.
Administration (FHA) loan, a person must
generally
A: have at least a high school diploma.
B: have one-quarter of the cost of the
home
for a down-payment.
C: fulfill income guidelines.
D: provide two individuals to co-sign the
loan.
A high school student has begun to A: Will I find a balance between financial rewards and personal satisfaction from
investigate the field of finance as a career work?
choice. In deciding about the field, the
student should focus on which question
first?
A: Will I find a balance between financial
rewards and personal satisfaction from
work?
B: How many people do I know who work
in this field?
C: Once I train for this area, how long
before I will be
at the top of the field?
D: Are there people in this field who are
dissatisfied
with their jobs?
A: Will I find a balance between financial D: An ATM transaction
rewards and personal satisfaction from
work?
Reason : It is important to investigate a
career with the idea of not only getting a
sense of earning potential, types of
positions available and the training
necessary to acquire these positions but
what are the chances that the individual will
enjoy working in this field.
1/17
,A company offers a defined-contribution B: the total amount of money contributed plus investment earnings.
pension plan which means that upon
retirement the employee will receive
A: one-half of the employee's last year's
salary.
B: the total amount of money contributed
plus investment
earnings.
C: an amount of money based only on the
length of time
the employee worked for the company.
D: a specified amount of money based
totally on the profit
earned by the company while the
employee worked
there.
The interest earned on United States Series A: exempt from state and local taxes.
EE Savings Bonds is
Reason : The interest rate on US savings bonds is exempt from state and local taxes.
A: exempt from state and local taxes.
B: paid in a lump sum at the time the face
value on the bond is reached.
C: equal to the money paid to purchase it.
Buying a treasury bill (T-bill) is best for B: a secure, low, risk investment.
investors who are looking for
Reason : These bills are backed by the full faith and credit of the US government,
A: a place to invest between $100-$500. therefore considered relatively risk free.
B: a secure, low risk investment.
C: a higher yield on their investment than
corporate bonds offer.
D: an investment that matures in 10-30
years.
2/17
, Using a brokerage firm, a qualified investor C: brokerage firm is lending the investor 50% of the money.
buys 1000 shares of a common stock at $50
a share on 50% margin. This means that the Reason : Margin is a speculative method whereby an investor borrows up to 50% of
the money needed from a brokerage firm in order to buy a wanted stock and pays a
A: investor will pay only $5000 for the fee for the privilege.
shares.
B: investor is buying 2000 shares.
C: brokerage firm is lending the investor
50% of the money.
D: brokerage firm will own 50% of the 1000
shares of stock that were purchased.
To determine the time value of depositing B: the rate of inflation.
$100 in a savings account, a person needs
to know the interest rate and
A: her total income.
B: the rate of inflation.
C: whether the account is FDIC protected.
D: whether the bank offers overdraft
protection.
The amount a lender charges to borrow Correct Answer : D: Finance charge
money is called the:
A: Principal
B: Annual Percentage Rate (APR)
C: Loan balance
D: Finance charge
The cost to use someone else's money for a A: Interest rate expressed as a percentage
period of time is called the:
Reason : Consumers usually pay a price for the goods and services they buy. The
A: Interest rate expressed as a percentage cost to buy the right to use someone else's money for a period of time is called the
B: Opportunity cost interest rate.
C: Minimum payment
D: Inflation rate
Interest earned on interest is known as: C: Compounded interest
A: Simple interest Reason : Compound interest enables the saver to earn interest on the interest that
B: True interest was earned earlier.
C: Compounded interest
D: Variable interest
Money received today is worth more than B: The time value of money
the same amount of money received
sometime in the future is: Reason : The time value of money is the concept that money received today is worth
more than the same amount of money received in the future. If you receive $100
A: The Rule of 72 today, you can put it to work immediately through savings or investing immediately.
B: The time value of money
C: Not true
D: Investing
3/17
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