Money, Intro to Finance
Identify the background color of a U.S. $5.00 bill
a. Orange b. Blue c. Green d. Yellow
c. Green
Which of the following is considered to be open-end credit?
a. A mortgage b. A car loan c. Department store charge cards d. Installments loans
c. Department store charge cards
"The Fed' is short for:
a. Congress b. FBI c. The Federal Reserve System d. The Federal Deposit Insurance Corporation
c. The Federal Reserve System
David bought stock for $4,000 and one year later he sold it for $1,000. The sale resulted in a:
a. Price earning b. Yield c. Market value d. Capital Loss
d. Capital Loss
Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the:
a. Cash value b. Death benefit or face value c. Separate value d. Premium or annuity value
b. Death benefit or face value
Purchases made with your debit card are usually:
a. Deducted immediately from your checking account b. Deducted from your credit card balance c. Added to your credit card balance d. Put on your credit card bill as a cash advance
a. Deducted immediately from your checking account
Who does a credit bureau or credit reporting agency speak to when collecting information about you for your credit file?
a. Your creditors and landlords b. Your doctors and school c. Your employers and brokers d. Parents and friends
a. Your creditors and landlords
Which financial product has the most predictable income?
a. Stock b. Real Estate c. Certificate of Deposit d. Option/future contract
c. Certificate of Deposit
What is the largest equities market in the world?
a. Over-the-counter (OTC) market b. New York Stock Exchange (NYSE) c. NASDAQ market d. American Stock Exchange
b. New York Stock Exchange (NYSE)
When a self-employed person decides to purchase disability insurance it is generally to
a. insure that the cost of the injury caused to others will be reimbursed b. eliminate the chance of going out of business c. lessen the possibility of becoming injured d. protect against the financial effects of not being able to work
d. protect against the financial effects of not being able to work
Which of the following does the Federal Reserve use to regulate the nation's money supply?
a. Fiscal policy b. Regulations c. Proposing legislation d. Monetary policy
d. Monetary policy
When a person declares bankruptcy that fact will appear on the person's credit report
a. for a 3 year period b. for a 10 year period c. until the person repays all debts owed d. until the person is able to receive a new credit card
b. for a 10 year period
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
a. Federal Reserve Board b. Federal Deposit Insurance Corporation (FDIC) c. State Banking Commission d. US Treasury Department
d. US Treasury Department
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:
a. The Federal Reserve b. Its Board of Directors c. The Securities and Exchange Commission (SEC) d. The World Bank
c. The Securities and Exchange Commission (SEC)
Debbie owns a clothing store. She is concerned that a customer who is injured in the store will sue. Which type of insurance should Debbie purchase?
a. Social insurance b. Surety bonds c. Liability insurance d. Life insurance
c. Liability insurance
When money is not used and good and services are exchanged for other goods and services, this system is called:
a. Credit b. Barter c. Checks d. Money
b. Barter
To qualify for a Federal Housing Administration Loan (FHA) loan, a person must generally
a. have at least high school diploma b. have one-quarter of the cost of the home for down-payment c. fulfill income guidelines d. provide two individuals to co-sign the loan
c. fulfill income guidelines
A blank endorsement on a check:
a. Has no effect on the check b. Cancels the check c. Creates a check that can be cashed by anyone d. Restricts the use of the check
c. Creates a check that can be cashed by anyone
Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the
a. investor will pay only $5000 for the shares b. brokerage firm is lending the investor 50% of the money c. brokerage firm will own 50% of the 1000 shares of stock that were purchased d. investor is buying 2000 shares
b. brokerage firm is lending the investor 50% of the money
Why is term life insurance usually the least expensive type of life insurance?
a. The policy builds cash value b. The policy only pays a death benefit c. The policy provides coverage for a lifetime d. The policy is available to all consumers
b. The policy only pays a death benefit
The denominations of of coins in the United States are:
a. $.01, $.05, $.10, $.25, $.50 and $1.00 b. $.01, $.30, $.50, and $5.00 c. $.05, $.10, $.50, $.75, and $10.00 d. Coins can be in any domination a consumer desires
a. $.01, $.05, $.10, $.25, $.50 and $1.00
A good practice when using credit cards is to routinely
a. take advantage of major sales b. use one credit card to pay debt on another credit card c. pay the complete balance each month d. accept all pre-approved credit offers
c. pay the complete balance each month
Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:
a. An installment payment b. A savings plan c. An ATM transaction d. A debit card transaction
b. A savings plan
As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower then expected if the
a. one of the apartments is not rented b. mortgage on the house is paid off c. tenant in an apartment decides to paint the hallways d. taxes on house are lowered
a. one of the apartments is not rented
A person buys homeowner's insurance policy with a $250 deductible, which means the person will
a. have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company b. have to pay a quarterly premium of $250 c. only receive payment from the insurance company of $250 for any single article damaged d. not be responsible for the first $250 of the claimed damages
a. have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company