Question 1

The Federal Deposit Insurance Corporation (FDIC) insures individual deposits up to $250,000 per account in FDIC-insured banks.

Accepted Answer

A) True 
 B)False

Question 2

Gladia is fond of shopping. However, most of the time she does not have cash at her disposal. Gladia hence purchases items by using a card issued by her bank that allows her to pay later. In the given scenario, Gladia is using a _____.

Accepted Answer

A)  debit card 
B)  loyalty card 
C)  fleet card 
D)  credit card

Question 3

One technique for establishing a sizable savings balance is to:

Accepted Answer

A)  follow the "pay yourself last" approach. 
B)  have a predetermined amount from each paycheck automatically deposited into your savings account. 
C)  invest in one specific financial security rather than investing in a diversified financial portfolio. 
D)  use traditional banks instead of online savings banks because they typically pay higher rates of interest.

Question 4

When a purchase is made using a credit card, money is immediately withdrawn from the user's bank account.

Accepted Answer

A) True 
 B)False

Question 5

In a credit card agreement, the _____ is the interest expense charged on a credit card.

Accepted Answer

A)  late fee 
B)  annual fee 
C)  annual percentage rate 
D)  surcharge

Question 6

In the context of setting up your budget, which of the following is a commercial program that you can use to avail a wide range of features, such as online banking services, financial calculators, and stock quotes?

Accepted Answer

A)  AceMoney 
B)  Venmo 
C)  Xoom 
D)  PayUMoney

Question 7

In the context of financial securities, which of the following statements is true of certificates of deposit?

Accepted Answer

A)  Certificates of deposit with longer maturities typically earn a lower interest rate than certificates of deposit that have shorter terms. 
B)  They can be cashed in before they mature without incurring any penalty. 
C)  They offer higher returns than most other types of investments. 
D)  The rate of interest paid on certificates of deposit is often higher than the rate on a regular savings account.

Question 8

In the context of credit, which of the following statements is true of the Fair, Isaac and Company (FICO) scale?

Accepted Answer

A)  It runs from 500 to 1200. 
B)  A person's credit score on the scale is based on his or her occupation and gender. 
C)  A person with a credit score above 500 is considered to have excellent creditworthiness. 
D)  A high credit score on the FICO scale makes it easier to get credit on favorable terms.

Question 9

Max wants to invest in the stock market. Although he has expert knowledge in trading in the stock market, he does not have the time needed to engage in these transactions and hence needs someone to buy and sell stocks on his behalf. In this case, Max should hire a(n) _____ to fulfill his requirement.

Accepted Answer

A)  angel investor 
B)  discount broker 
C)  securities dealer 
D)  investment banker

Question 10

Leena and Rebecca both have accounts in the same bank. They also hold credit cards issued by their bank. Leena, however, can buy more goods on credit than Rebecca as she falls in the below average to fair category of creditworthiness. In the context of the Fair, Isaac and Company (FICO) scale, which of the following scores is Rebecca most likely to have?

Accepted Answer

A)  800-899 
B)  700-799 
C)  600-699 
D)  500-599

Question 11

In the context of financial securities, certificates of deposit are issued by banks for a variable term.

Accepted Answer

A) True 
 B)False

Question 12

Identify a true statement about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009.

Accepted Answer

A)  It prohibits the issuance of credit cards to anyone under the age of 21. 
B)  It created the Consumer Financial Protection Bureau. 
C)  It prohibits issuers from raising interest rates on existing balances unless the borrower is more than 60 days late in making required payments. 
D)  It established the Securities and Exchange Commission to ensure that credit card issuers give a 45-day notice before making significant changes to credit agreements.

Question 13

Wendy has purchased several furnishing items from a home decor store. She pays for the entire purchase through her credit card. Wendy has 21 days to pay back the amount to the issuer of the credit card. In the context of credit cards, the number of days Wendy is given to pay back the balance is called the _____.

Accepted Answer

A)  grace period 
B)  face value period 
C)  vesting period 
D)  tie-up period

Question 14

List and describe some of the main conditions that you need to understand before accepting a credit card.

Accepted Answer

The answer of List and describe some of the main...

Question 15

In the context of acquiring financial assets, which of the following is a robo advisor service that helps people set, track, stick to, and eventually achieve their financial goals?

Accepted Answer

A)  Wealthfront 
B)  PayUMoney 
C)  TransferWise 
D)  Ripple

Question 16

In the context of investing for retirement, which of the following statements is true of 457 plans?

Accepted Answer

A)  They offer 50 percent tax deduction on a person's income. 
B)  They are offered to employees of private-sector businesses. 
C)  They allow an employee to enjoy tax-free earnings. 
D)  They are primarily for state and local government employees.

Question 17

Delores had invested in an individual retirement account (IRA) over the 25 years of her service and then invested the money from the IRA in government securities. The contributions that Delores had made to the account were not tax deductible at the time they were made, but she did not have to pay taxes on the distribution she received from the IRA on retirement. In this scenario, Delores had invested in a _____.

Accepted Answer

A)  traditional IRA 
B)  Roth IRA 
C)  SIMPLE IRA 
D)  SEP IRA

Question 18

Frieda works at Zurisco Corp., a private company. She is eligible for the employee-contribution retirement plan. This plan is implemented through a payroll-deduction process. In this case, which of the following plans is offered to Frieda?

Accepted Answer

A)  403(b) 
B)  457 plan 
C)  HR10 plan 
D)  401(k) plan

Question 19

When using a credit card, _____.

Accepted Answer

A)  making late payments can damage your credit history 
B)  tracking your expenditures is difficult 
C)  maintaining financial discipline is easier than when using a debit card 
D)  availing warranties for products purchased through the card is not possible

Question 20

_____ is a detailed forecast of your expected cash inflows and cash outflows to determine your net inflow or outflow for a given period of time.

Accepted Answer

A)  A monetary fund 
B)  A budget 
C)  Working capital 
D)  An inventory

Exam 18: Appendix :personal-Finance-Appendix

The Federal Deposit Insurance Corporation (FDIC) insures individual deposits up to $250,000 per account in FDIC-insured banks.

Gladia is fond of shopping. However, most of the time she does not have cash at her disposal. Gladia hence purchases items by using a card issued by her bank that allows her to pay later. In the given scenario, Gladia is using a _____.

One technique for establishing a sizable savings balance is to:

When a purchase is made using a credit card, money is immediately withdrawn from the user's bank account.

In a credit card agreement, the _____ is the interest expense charged on a credit card.

In the context of setting up your budget, which of the following is a commercial program that you can use to avail a wide range of features, such as online banking services, financial calculators, and stock quotes?

In the context of financial securities, which of the following statements is true of certificates of deposit?

In the context of credit, which of the following statements is true of the Fair, Isaac and Company (FICO) scale?

In the context of financial securities, certificates of deposit are issued by banks for a variable term.

Identify a true statement about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009.

List and describe some of the main conditions that you need to understand before accepting a credit card.

In the context of acquiring financial assets, which of the following is a robo advisor service that helps people set, track, stick to, and eventually achieve their financial goals?

In the context of investing for retirement, which of the following statements is true of 457 plans?

Frieda works at Zurisco Corp., a private company. She is eligible for the employee-contribution retirement plan. This plan is implemented through a payroll-deduction process. In this case, which of the following plans is offered to Frieda?

When using a credit card, _____.

_____ is a detailed forecast of your expected cash inflows and cash outflows to determine your net inflow or outflow for a given period of time.