Question 1

Credit history is the study of financial markets and their impact on interest rates.

Accepted Answer

A) True 
 B)False

Question 2

A Roth IRA is an example of a 403(b) plan and is not tax deductible.

Accepted Answer

A) True 
 B)False

Question 3

Financial experts have some good advice about savings. Which answer best describes this?

Accepted Answer

A)  Pay your credit cards off first­­they have the highest interest. 
B)  Pay yourself first­­let the credit cards worry about themselves. 
C)  Open savings accounts in traditional banks and avoid opening accounts in online savings banks. 
D)  Experts recommend saving up about six months of income in the event you lose your job or some other emergency occurs. 
A)  Pay your credit cards off first­­they have the highest interest. 
B)  Pay yourself first­­let the credit cards worry about themselves. 
C)  Open savings accounts in traditional banks and avoid opening accounts in online savings banks. 
D)  Experts recommend saving up about six months of income in the event you lose your job or some other emergency occurs.

Question 4

The Dodd­Frank Act:

Accepted Answer

A)  requires issuers to give a 45­day notice before making significant changes to credit agreements. 
B)  requires lenders, insurance companies, and others to provide a free copy of the credit score of applicants whose credit card applications have been rejected. 
C)  requires anyone under the age of 21 who applies for a credit card to either verify proof of income or have an older adult cosign the application. 
D)  created the Federal Financial Institutions Examination Council (FFIE
C) . 
A)  requires issuers to give a 45­day notice before making significant changes to credit agreements. 
B)  requires lenders, insurance companies, and others to provide a free copy of the credit score of applicants whose credit card applications have been rejected. 
C)  requires anyone under the age of 21 who applies for a credit card to either verify proof of income or have an older adult cosign the application. 
D)  created the Federal Financial Institutions Examination Council (FFIE
C) .

Question 5

Alleciana has a 457 retirement plan. What does this mean?

Accepted Answer

A)  She receives a 50 percent tax deduction on the income she invests in the plan. 
B)  She has to pay higher taxes on the earnings received from these investments. 
C)  She is vested in her company. 
D)  She likely works for state government. 
A)  She receives a 50 percent tax deduction on the income she invests in the plan. 
B)  She has to pay higher taxes on the earnings received from these investments. 
C)  She is vested in her company. 
D)  She likely works for state government.

Question 6

In 2012, traditional and Roth IRAs had a maximum yearly contribution rate of $5,000.

Accepted Answer

A) True 
 B)False

Question 7

_____ are professionally­managed funds that pool the contributions of thousands of investors.

Accepted Answer

A)  Mutual funds 
B)  Exchange Traded Notes (ETN) 
C)  T­bills 
D)  Certificates of deposit funds 
A)  Mutual funds 
B)  Exchange Traded Notes (ETN) 
C)  T­bills 
D)  Certificates of deposit funds

Question 8

_____ refers to the interest you earn not only on the money you directly invest but also on the interest you've earned in previous years.

Accepted Answer

A)  Compound interest 
B)  Return on investment 
C)  Simple interest 
D)  Default interest 
A)  Compound interest 
B)  Return on investment 
C)  Simple interest 
D)  Default interest

Question 9

Candice purchased an iced coffee from the local coffee shop. Candice's purchase is an example of a nondiscretionary payment.

Accepted Answer

A) True 
 B)False

Question 10

The difference between discretionary costs and nondiscretionary costs is that discretionary costs are less controllable.

Accepted Answer

A) True 
 B)False

Question 11

The most important distinction between preferred stock and common stock is that:

Accepted Answer

A)  owners of common stock are more likely to receive a dividend than owners of preferred stock. 
B)  owners of preferred stock are more likely to receive a dividend than owners of common stock. 
C)  while preferred stockholders are owners of a corporation, common stockholders are its creditors. 
D)  while common stockholders are owners of a corporation, preferred stockholders are its creditors. 
A)  owners of common stock are more likely to receive a dividend than owners of preferred stock. 
B)  owners of preferred stock are more likely to receive a dividend than owners of common stock. 
C)  while preferred stockholders are owners of a corporation, common stockholders are its creditors. 
D)  while common stockholders are owners of a corporation, preferred stockholders are its creditors.

Question 12

Nondiscretionary payments include your monthly rent or car payment, which are set by contract.

Accepted Answer

A) True 
 B)False

Question 13

A checking account is often referred to as a person's "safety net."

Accepted Answer

A) True 
 B)False

Question 14

Karen wants to begin building her retirement fund, but she is very apprehensive about the stock market and wants nothing to do with it. She wants something that, historically, has been very stable. Which of the following would you recommend that she invest in?

Accepted Answer

A)  Mutual funds 
B)  Corporate bonds 
C)  Government securities 
D)  Exchange traded funds 
A)  Mutual funds 
B)  Corporate bonds 
C)  Government securities 
D)  Exchange traded funds

Question 15

Evaluate strategies to help build a sufficient savings and emergency fund.

Accepted Answer

A savings account is an interest­earning

Question 16

Your ability to purchase goods or resources without making immediate payment is known as an investment.

Accepted Answer

A) True 
 B)False

Question 17

The higher the annual percentage rate, the lesser your interest expense on unpaid balances.

Accepted Answer

A) True 
 B)False

Question 18

You recently purchased 100 shares of Sand Box Software. One benefit of buying and owning these shares is that you are sure to receive dividends.

Accepted Answer

A) True 
 B)False

Question 19

One key provision of the Dodd­Frank Act was the establishment of the Consumer Financial Protection Bureau.

Accepted Answer

A) True 
 B)False

Question 20

One of the most important determinants of the amount of credit you can obtain is your _____, which is a numerical indicator of your creditworthiness.

Accepted Answer

A)  credit interest 
B)  credit score 
C)  credit history 
D)  debit score 
A)  credit interest 
B)  credit score 
C)  credit history 
D)  debit score

Credit history is the study of financial markets and their impact on interest rates.

A Roth IRA is an example of a 403(b) plan and is not tax deductible.

Financial experts have some good advice about savings. Which answer best describes this?

The DoddFrank Act:

Alleciana has a 457 retirement plan. What does this mean?

In 2012, traditional and Roth IRAs had a maximum yearly contribution rate of $5,000.

_____ are professionallymanaged funds that pool the contributions of thousands of investors.

_____ refers to the interest you earn not only on the money you directly invest but also on the interest you've earned in previous years.

Candice purchased an iced coffee from the local coffee shop. Candice's purchase is an example of a nondiscretionary payment.

The difference between discretionary costs and nondiscretionary costs is that discretionary costs are less controllable.

The most important distinction between preferred stock and common stock is that:

Nondiscretionary payments include your monthly rent or car payment, which are set by contract.

A checking account is often referred to as a person's "safety net."

Karen wants to begin building her retirement fund, but she is very apprehensive about the stock market and wants nothing to do with it. She wants something that, historically, has been very stable. Which of the following would you recommend that she invest in?

Evaluate strategies to help build a sufficient savings and emergency fund.

Your ability to purchase goods or resources without making immediate payment is known as an investment.

The higher the annual percentage rate, the lesser your interest expense on unpaid balances.

You recently purchased 100 shares of Sand Box Software. One benefit of buying and owning these shares is that you are sure to receive dividends.

One key provision of the DoddFrank Act was the establishment of the Consumer Financial Protection Bureau.

One of the most important determinants of the amount of credit you can obtain is your _____, which is a numerical indicator of your creditworthiness.

Business Now: Change Is the Only Constant

Economics: the Framework of Business

The World Marketplace: Business Without Borders

Business Ethics Social Responsibility: Doing Well by Doing Good

Business Communication: Creating Delivering Messages That Matter

Business Formation: Choosing the Form That Fits

Small Business Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Finance: Acquiring Using Funds to Maximize Value

Securities Markets: Trading Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

HRM: Building a Top Quality Workforce

Managing Information Technology: Finding New Ways to Learn and Link

Om: Putting It All Together Endnotes

Online Appendix

Filters

Exam 18: Appendix Studentinstructor Review Cards

Credit history is the study of financial markets and their impact on interest rates.

A Roth IRA is an example of a 403(b) plan and is not tax deductible.

Financial experts have some good advice about savings. Which answer best describes this?

The Dodd­Frank Act:

Alleciana has a 457 retirement plan. What does this mean?

In 2012, traditional and Roth IRAs had a maximum yearly contribution rate of $5,000.

_____ are professionally­managed funds that pool the contributions of thousands of investors.

_____ refers to the interest you earn not only on the money you directly invest but also on the interest you've earned in previous years.

Candice purchased an iced coffee from the local coffee shop. Candice's purchase is an example of a nondiscretionary payment.

The difference between discretionary costs and nondiscretionary costs is that discretionary costs are less controllable.

The most important distinction between preferred stock and common stock is that:

Nondiscretionary payments include your monthly rent or car payment, which are set by contract.

A checking account is often referred to as a person's "safety net."

Karen wants to begin building her retirement fund, but she is very apprehensive about the stock market and wants nothing to do with it. She wants something that, historically, has been very stable. Which of the following would you recommend that she invest in?

Evaluate strategies to help build a sufficient savings and emergency fund.

Your ability to purchase goods or resources without making immediate payment is known as an investment.

The higher the annual percentage rate, the lesser your interest expense on unpaid balances.

You recently purchased 100 shares of Sand Box Software. One benefit of buying and owning these shares is that you are sure to receive dividends.

One key provision of the Dodd­Frank Act was the establishment of the Consumer Financial Protection Bureau.

One of the most important determinants of the amount of credit you can obtain is your _____, which is a numerical indicator of your creditworthiness.

Business Now: Change Is the Only Constant

Economics: the Framework of Business

The World Marketplace: Business Without Borders

Business Ethics Social Responsibility: Doing Well by Doing Good

Business Communication: Creating Delivering Messages That Matter

Business Formation: Choosing the Form That Fits

Small Business Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Finance: Acquiring Using Funds to Maximize Value

Securities Markets: Trading Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

HRM: Building a Top Quality Workforce

Managing Information Technology: Finding New Ways to Learn and Link

Om: Putting It All Together Endnotes

Online Appendix

Filters

The DoddFrank Act:

_____ are professionallymanaged funds that pool the contributions of thousands of investors.

One key provision of the DoddFrank Act was the establishment of the Consumer Financial Protection Bureau.