Devry BUSN380 Week 8 Final Exam

1.(TCO 1) The stages that an individual
goes through based on age, financial needs, and family situation is called
the: (Points: 5)
financial
planning process.
budgeting
procedure.
personal
economic cycle.
adult
life cycle.
tax
planning process.

2.(TCO 1) A lack of willingness to accept a variety of
employment positions is a common career planning mistake associated with
weak: (Points: 5)
common
sense.
communication.
training.
flexibility.
perseverance.

3.(TCO 1) The abilities to work well with numbers,
possess problem-solving skills, and have physical dexterity are examples of: (Points: 5)
interests.
survival
skills.
aptitudes.
occupational
attitudes.
on-the-job
training.

4.(TCO 1) Which of the following situations is a person who
could be insolvent?
(Points: 5)
Assets
$56,000; annual expenses $60,000

Assets
$78,000; net worth $22,000

Liabilities
$45,000; net worth $6,000

Assets
$40,000; liabilities $45,000

Annual
cash inflows $45,000; liabilities $50,000

5.(TCO 1) Payments that do not vary from month to month are
____________ expenses.
(Points: 5)
fixed
current
variable
luxury
budgeted

6.(TCO 2) Reductions from gross income for such items as
individual retirement account contributions and alimony payments will result
in: (Points: 5)
adjusted
gross income.
taxable
income.
earned
income.
passive
income.
total
exclusions.

7.(TCO 2) Tax-deferred retirement plans are a type of: (Points: 5)
exemption.
itemized
deduction.
passive
income.
tax
shelter.
tax
credit.

8.(TCO 2) A deduction from adjusted gross income for
yourself, your spouse, and qualified dependents is: (Points: 5)
the
standard deduction.

a
tax credit.
an
itemized deduction.

an
exclusion.
an
exemption.

9.(TCO 2) A tax credit of $50 for a person in a 28 percent
tax bracket would reduce a person’s taxes by: (Points: 5)
$10.
$28.
$14.
$50.
$35.

10.(TCO 2) The rate of return on a savings account is also
referred to as:
(Points: 5)
liquidity.
compounding.
yield.
insolvency.
asset
management.

11.(TCO 2) A $200 savings account that earns $13 interest in
a year has a yield of ____________ percent. (Points: 5)
6
13
7
11.25
6.5

12.(TCO 3) Dave’s take home pay per month is $2200. What is
the maximum dollar amount of debt payments he should have? (Points: 5)
$880
$440
$330
$220
$0

13.(TCO 3) If you have incorrect information in your credit
file: (Points: 5)
you
can’t really do much about it.

you
have no legal remedies.

credit
bureaus are not required to change it.
there
are legal remedies available to you.

don’t
worry much because you will still get the credit.

14.(TCO 3) Gordon Carey uses his Visa card to purchase a new
digital camera and lens. What type of credit did Gordon use? (Points: 5)
installment
sales credit
installment
cash credit
single
lump sum credit
revolving
credit
incidental
credit

15.(TCO 3) Which bankruptcy allows a debtor with a regular
income to extinguish his or her debts from future earnings or other property
over a period of time?
(Points: 5)
Chapter
7
Chapter
11
Chapter
13
Chapter
15

16.(TCO 3) Gary Simpson notices that his neighbor has a brand
new Ford F150 truck parked in the driveway. Gary decides that he needs a new
car and goes out and purchases a Hummer with a six year loan on it. Which
reason for indebtedness is this an example of? (Points: 5)
misunderstanding
or lack of communication

the
use of money to punish

the
expectation of instant comfort

keeping
up with the Joneses

overindulgence
of children

17.(TCO 3) Which of the following would likely be the least
expensive place to borrow?
(Points: 5)
Car
dealer.
Appliance
store.
Relative.
Department
store.
Finance
company.

18.(TCO 5) An intermediate-term investment objective is
defined as one that will be accomplished within a period of? (Points: 5)
Less
than two years.
Two
to five years.
More
than five years.
None
of the choices.

19.(TCO 5) Which of the following is a true statement? (Points: 5)
When
choosing an investment, it is not necessary to consider the risk factor.
During
inflationary times, there is a risk that the financial return on an
investment will not keep pace with the rate of inflation.
The
interest rate risk associated with investments in bonds is the result of
changes in business conditions faced by companies.
The
risk of business failure deals with changes in the value of stocks and bonds
due to changes in interest rates in the market.
The
price of stocks, bonds, and other investments never fluctuates in the market.

20.(TCO 5) Matt Dannon just bought the stock of a
company. He knows that with this stock comes the responsibility to approve
major actions taken by the company. What gives Matt this responsibility? (Points: 5)
Equity
Proxy
Voting
rights
Dividends
None
of the choices

21.(TCO 5) Nancy Groom owns one $1,000 corporate bond
issued by Chevron. The bond pays 8.5 percent. If interest is paid
semiannually, what is the amount of the check that Ms. Groom will receive at
the end of each six-month period?
(Points: 5)
$4.25
$42.50
$85
$850
$1,000

22.(TCO 5) A corporate bond that is secured by various
assets of the issuing firm is called a(n) ____________ bond. (Points: 5)
debenture
mortgage
indenture
preemptive
treasury

23.(TCO 5) Today bond ownership records are maintained
using a process called:

(Points: 5)
certified
registration.
book
entry.
revenue
recognition process.

coupon
registration.
general
obligation process.

24.(TCO 4) A personal opportunity cost associated with a
consumer purchase refers to:
(Points: 5)
buying
on credit.
selecting
a commonly known brand.

the
influence of advertising on consumers.
time
used to compare prices.

government
regulation of deceptive business-government activities in an effort to
prevent consumer fraud.

25.(TCO 4)
A 32-ounce package selling for $1.60 would have a unit price of: (Points: 5)
$1.60
$2.00 a pound
5¢ an ounce
80¢ a quart
12¢ an ounce

26.(TCO 4) Which of the following information is required on
food labels? (Points: 5)
open
dating
unit
pricing
a
generic name
common
product name

27.(TCO 4) Federal Trade Commission regulations require
that: (Points: 5)
all
used cars be sold with a warranty.

used
car buyers be informed if the vehicle comes with a warranty.
used
cars over 100,000 miles cannot be sold.
major
repairs must be made on all used cars offered for sale.
the
seller must pay for one-half of major repairs on a defective used car.

28.(TCO 4) Negative amortization is the result of: (Points: 5)
a
lower amount owed on the mortgage.

a
higher amount owed on the mortgage.

a
lower escrow account.

lower
interest rates.
a
lower down payment.

29.(TCO 4) Most health insurance policies in the United
States are sold to:
(Points: 5)
victims
of communicable diseases.

individuals
with families.
single
individuals with no dependents.

employees
and their dependents.

employers,
who in turn offer the benefits to employees.

30.(TCO 6 and 7) A mutual fund in which no sales charge is
paid by the individual investor is called a(n) ____________ fund. (Points: 5)
closed-end
open-end
load
no-load
convertible
fund.

31.(TCO 6 and 7) A mutual fund that invests in companies
outside the United States is called a(n) ____________ fund. (Points: 5)
growth-income
income
international
industry
global
market

32.(TCO 6 and 7) A handwritten will is called a(n): (Points: 5)
holographic
will.
formal
will.
statutory
will.
letter
of last instruction.

informal
will.

1.(TCO 1) The stages that an individual
goes through based on age, financial needs, and family situation is called
the: (Points: 5)
financial
planning process.
budgeting
procedure.
personal
economic cycle.
adult
life cycle.
tax
planning process.

2.(TCO 1) A lack of willingness to accept a variety of
employment positions is a common career planning mistake associated with
weak: (Points: 5)
common
sense.
communication.
training.
flexibility.
perseverance.

3.(TCO 1) The abilities to work well with numbers,
possess problem-solving skills, and have physical dexterity are examples of: (Points: 5)
interests.
survival
skills.
aptitudes.
occupational
attitudes.
on-the-job
training.

4.(TCO 1) Which of the following situations is a person who
could be insolvent?
(Points: 5)
Assets
$56,000; annual expenses $60,000

Assets
$78,000; net worth $22,000

Liabilities
$45,000; net worth $6,000

Assets
$40,000; liabilities $45,000

Annual
cash inflows $45,000; liabilities $50,000

5.(TCO 1) Payments that do not vary from month to month are
____________ expenses.
(Points: 5)
fixed
current
variable
luxury
budgeted

6.(TCO 2) Reductions from gross income for such items as
individual retirement account contributions and alimony payments will result
in: (Points: 5)
adjusted
gross income.
taxable
income.
earned
income.
passive
income.
total
exclusions.

7.(TCO 2) Tax-deferred retirement plans are a type of: (Points: 5)
exemption.
itemized
deduction.
passive
income.
tax
shelter.
tax
credit.

8.(TCO 2) A deduction from adjusted gross income for
yourself, your spouse, and qualified dependents is: (Points: 5)
the
standard deduction.

a
tax credit.
an
itemized deduction.

an
exclusion.
an
exemption.

9.(TCO 2) A tax credit of $50 for a person in a 28 percent
tax bracket would reduce a person’s taxes by: (Points: 5)
$10.
$28.
$14.
$50.
$35.

10.(TCO 2) The rate of return on a savings account is also
referred to as:
(Points: 5)
liquidity.
compounding.
yield.
insolvency.
asset
management.

11.(TCO 2) A $200 savings account that earns $13 interest in
a year has a yield of ____________ percent. (Points: 5)
6
13
7
11.25
6.5

12.(TCO 3) Dave’s take home pay per month is $2200. What is
the maximum dollar amount of debt payments he should have? (Points: 5)
$880
$440
$330
$220
$0

13.(TCO 3) If you have incorrect information in your credit
file: (Points: 5)
you
can’t really do much about it.

you
have no legal remedies.

credit
bureaus are not required to change it.
there
are legal remedies available to you.

don’t
worry much because you will still get the credit.

14.(TCO 3) Gordon Carey uses his Visa card to purchase a new
digital camera and lens. What type of credit did Gordon use? (Points: 5)
installment
sales credit
installment
cash credit
single
lump sum credit
revolving
credit
incidental
credit

15.(TCO 3) Which bankruptcy allows a debtor with a regular
income to extinguish his or her debts from future earnings or other property
over a period of time?
(Points: 5)
Chapter
7
Chapter
11
Chapter
13
Chapter
15

16.(TCO 3) Gary Simpson notices that his neighbor has a brand
new Ford F150 truck parked in the driveway. Gary decides that he needs a new
car and goes out and purchases a Hummer with a six year loan on it. Which
reason for indebtedness is this an example of? (Points: 5)
misunderstanding
or lack of communication

the
use of money to punish

the
expectation of instant comfort

keeping
up with the Joneses

overindulgence
of children

17.(TCO 3) Which of the following would likely be the least
expensive place to borrow?
(Points: 5)
Car
dealer.
Appliance
store.
Relative.
Department
store.
Finance
company.

18.(TCO 5) An intermediate-term investment objective is
defined as one that will be accomplished within a period of? (Points: 5)
Less
than two years.
Two
to five years.
More
than five years.
None
of the choices.

19.(TCO 5) Which of the following is a true statement? (Points: 5)
When
choosing an investment, it is not necessary to consider the risk factor.
During
inflationary times, there is a risk that the financial return on an
investment will not keep pace with the rate of inflation.
The
interest rate risk associated with investments in bonds is the result of
changes in business conditions faced by companies.
The
risk of business failure deals with changes in the value of stocks and bonds
due to changes in interest rates in the market.
The
price of stocks, bonds, and other investments never fluctuates in the market.

20.(TCO 5) Matt Dannon just bought the stock of a
company. He knows that with this stock comes the responsibility to approve
major actions taken by the company. What gives Matt this responsibility? (Points: 5)
Equity
Proxy
Voting
rights
Dividends
None
of the choices

21.(TCO 5) Nancy Groom owns one $1,000 corporate bond
issued by Chevron. The bond pays 8.5 percent. If interest is paid
semiannually, what is the amount of the check that Ms. Groom will receive at
the end of each six-month period?
(Points: 5)
$4.25
$42.50
$85
$850
$1,000

22.(TCO 5) A corporate bond that is secured by various
assets of the issuing firm is called a(n) ____________ bond. (Points: 5)
debenture
mortgage
indenture
preemptive
treasury

23.(TCO 5) Today bond ownership records are maintained
using a process called:

(Points: 5)
certified
registration.
book
entry.
revenue
recognition process.

coupon
registration.
general
obligation process.

24.(TCO 4) A personal opportunity cost associated with a
consumer purchase refers to:
(Points: 5)
buying
on credit.
selecting
a commonly known brand.

the
influence of advertising on consumers.
time
used to compare prices.

government
regulation of deceptive business-government activities in an effort to
prevent consumer fraud.

25.(TCO 4)
A 32-ounce package selling for $1.60 would have a unit price of: (Points: 5)
$1.60
$2.00 a pound
5¢ an ounce
80¢ a quart
12¢ an ounce

26.(TCO 4) Which of the following information is required on
food labels? (Points: 5)
open
dating
unit
pricing
a
generic name
common
product name

27.(TCO 4) Federal Trade Commission regulations require
that: (Points: 5)
all
used cars be sold with a warranty.

used
car buyers be informed if the vehicle comes with a warranty.
used
cars over 100,000 miles cannot be sold.
major
repairs must be made on all used cars offered for sale.
the
seller must pay for one-half of major repairs on a defective used car.

28.(TCO 4) Negative amortization is the result of: (Points: 5)
a
lower amount owed on the mortgage.

a
higher amount owed on the mortgage.

a
lower escrow account.

lower
interest rates.
a
lower down payment.

29.(TCO 4) Most health insurance policies in the United
States are sold to:
(Points: 5)
victims
of communicable diseases.

individuals
with families.
single
individuals with no dependents.

employees
and their dependents.

employers,
who in turn offer the benefits to employees.

30.(TCO 6 and 7) A mutual fund in which no sales charge is
paid by the individual investor is called a(n) ____________ fund. (Points: 5)
closed-end
open-end
load
no-load
convertible
fund.

31.(TCO 6 and 7) A mutual fund that invests in companies
outside the United States is called a(n) ____________ fund. (Points: 5)
growth-income
income
international
industry
global
market

32.(TCO 6 and 7) A handwritten will is called a(n): (Points: 5)
holographic
will.
formal
will.
statutory
will.
letter
of last instruction.

informal
will.