BUSN 380 DEVRY COMPLETE QUIZ PACKAGE

BUSN 380 DEVRY COMPLETE QUIZ PACKAGE 

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BUSN 380 DeVry Complete Quiz Package 

BUSN380 

BUSN 380 DeVry Week 1 Quiz Latest 

1. Question : (TCO 1) A(n) _____ summarizes your current financial situation, analyzes your financial 

needs, and recommends a direction for your financial activities. 

 

 

 

 

 

insurance prospectus 

statement 

budget 

investment forecast 

financial plan 

Question 2. Question : (TCO 1) In financial planning, a major activity component involves the 

 

 

 

 

 

allocation of current resources for spending. 

evaluation of investment alternatives. 

evaluation of one’s career. 

selection of insurance coverage. 

establishment of credit. 

Question 3. Question : (TCO 1) Higher interest rates can be caused by 

 

 

 

 

 

increased saving and investing by consumers. 

an increase in the money supply. 

a decrease in consumer borrowing. 

lower government spending. 

a lower money supply. 

Question 4. Question : (TCO 1) The _____ refers to stages that an individual goes through based on 

age, financial needs, and family situation. 

 

financial planning process

financial cycle 

adult life cycle 

personal economic cycle 

tax planning process 

Question 5. Question : (TCO 1) The future value of an account in which $2,000 is deposited each year 

for 5 years, and which earns 4%, is approximately _____ after 5 years. 

$2,000 

$2,400 

$10,000 

$400 

$10,800 

Question 6. Question : (TCO 1) Higher employment levels can be attributed to 

 

 

 

 

 

lower consumer prices. 

reduced employment levels. 

lower interest rates. 

higher employment levels. 

increased consumer spending. 

Question 7. Question : (TCO 1) When it comes to the financial planning process, the first step is to 

 

 

 

 

 

develop financial goals. 

implement the financial plan. 

evaluate and revise your actions. 

analyze your current personal and financial situation. 

create a financial plan of action. 

Question 8. Question : (TCO 1) The simple calculation of interest can be performed by multiplying the 

amount in a savings account by the 

 

 

 

 

 

annual interest rate. 

annual interest rate and the time period. 

number of months in a year. 

time period and number of months. 

time period. 

Question 9. Question : (TCO 1) Brad Opper has a goal of “saving $50 a month for vacation.” Brad’s goal 

lacks 

 

 

 

 

 

a realistic perspective. 

specific terms. 

the type of action to be taken. 

a purpose. 

a time frame.

Question 10. Question : (TCO 1) _____ risk refers to the changing cost of money. 

 

 

 

 

 

Monetary 

Inflation 

Economic 

Personal 

Interest rate 

Question 11. Question : (TCO 1) You want to determine the current value of an annuity that pays $350 a 

month for the next 5 years. What type of calculation would provide you with this value? 

 

 

 

 

 

Future value of a single amount 

Simple interest 

Present value of a single amount 

Future value of a series of deposits 

Present value of a series of deposits 

Question 12. Question : (TCO 1) A commitment to a profession that requires continued training and 

offers a clear path for occupational growth is a(n) 

 

 

 

 

 

apprenticeship. 

internship 

employment. 

cooperative employment experience. 

career. 

Question 13. Question : (TCO 1) In order to evaluate one’s current financial position (including net 

worth), the best tool that can be used is a 

 

 

 

 

 

budget. 

cash flow statement. 

bank statement. 

time-value-of-money report. 

balance sheet. 

Question 14. Question : (TCO 1) A _____ résumé would best be used by an employee who has worked 

in many fields and has a variety of skills in a variety of work-related categories. 

 

 

 

 

 

targeted 

goal-oriented 

chronological 

functional 

career change 

Question 15. Question : (TCO 1) A _____ résumé is designed to obtain a specific job.

functional 

chronological 

goal-oriented 

targeted 

data 

Question 16. Question : (TCO 1) Which of the following would be a competency commonly associated 

with successful people? 

 

 

 

 

 

An ability to work well with others in a variety of settings 

A desire to do tasks better than they have to be done 

An ability to solve problems creatively in team settings 

Well-developed written and oral communication skills 

All of the above 

Question 17. Question : (TCO 1) Cash and other items that are easily converted to cash are referred to 

as _____. 

 

 

 

 

 

quick assets 

working assets 

liquid assets 

investments 

solvent items 

Question 18. Question : (TCO 1) A savings amount of $3,500 on deposit for 4 years at 4% interest 

(compounded annually) would earn about 

$ 650. 

$ 600. 

$560. 

$140. 

$350. 

Question 19. Question : (TCO 1) Solvency can be assessed through the analysis of the following 

financial document. 

 

 

 

 

 

Cash flow statement 

Debt consolidation statement 

Personal income statement 

Credit report 

The balance sheet 

Question 20. Question : (TCO 1) Which of the following situations best represents an individual facing 

insolvency?

Assets $30,000; liabilities $37,000 

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

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

Assets $56,000; annual expenses $60,000 

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


1. Question : (TCO 2) This type of tax is calculated based upon the value of land and buildings. 

 

 

 

 

 

Personal 

Real estate 

Direct 

Proportional 

Regressive 

Question 2. Question : (TCO 2) Interest earnings of $2,400 from a taxable investment for a person in a 

28% tax bracket would result in after-tax earnings of 

$672. 

$1,728. 

$2,400. 

$3,333. 

$8,571. 

Question 3. Question : (TCO 2) _____ can reduce taxable income. 

 

 

 

 

 

Portfolio income 

Tax credits 

Exclusions 

Passive income 

Earned income 

Question 4. Question : (TCO 2) You have invested in the stock market and receive dividends. The 

dividend income must be reported as _____ income. 

 

 

 

 

 

passive 

earned 

investment 

capital gain 

excluded 

Question 5. Question : (TCO 2) George Washburn had earnings from his salary of $44,000, interest on 

savings of $800, a contribution to a traditional individual retirement account of $2,000, and dividends from 

mutual funds of $600. George’s adjusted income (AGI) would be

$43,400. 

$44,000. 

$45,400. 

$42,000. 

$42,800. 

Question 6. Question : (TCO 2) _____ can be calculated as a result of various items being subtracted 

from gross income, such as individual retirement account contributions and alimony payments. 

 

 

 

 

 

Adjusted gross income 

Taxable income 

Earned income 

Passive income 

Total exclusions 

Question 7. Question : (TCO 2) Expenses that a taxpayer is allowed to deduct from adjusted gross 

income are called _____. 

 

 

 

 

 

exemptions 

exclusions 

itemized deductions 

tax credits 

passive income 

Question 8. Question : (TCO 2) Taxes owed can be reduced through _____. 

 

 

 

 

 

the standard deduction 

a tax credit 

an itemized deduction 

an exclusion 

an exemption 

Question 9. Question : (TCO 2) In order for a dependent to qualify as an exemption, he or she must 

be married. 

receive more than one half of his or her support from the taxpayer. 

be under age 16. 

be registered in school. 

be a relative. 

Question 10. Question : (TCO 2) People who _____ must make estimated quarterly tax payments. 

 

 

 

 

are employed in a foreign country. 

receive dividends. 

work for the government. 

do not have adequate amounts withheld from income.

Question 11. Question : (TCO 2) A(n) _____ is an all-purpose account that provides several services. 

 

 

 

 

 

NOW account 

asset management account 

EFT account 

mutual fund 

money market account 

Question 12. Question : (TCO 2) An example of a _____ deposit is a checking account. 

 

 

 

 

 

common 

time 

current 

loan 

demand 

Question 13. Question : (TCO 2) An example of a place where one will encounter high fees for loans 

when borrowing money is a _____. 

 

 

 

 

 

credit union 

savings and loan association 

pawnshop 

commercial bank 

mutual savings bank 

Question 14. Question : (TCO 2) _____ are the major products offered by investment companies. 

 

 

 

 

 

Interest-bearing checking accounts 

Variable-rate loans 

Credit card accounts 

Savings bonds 

Mutual funds 

Question 15. Question : (TCO 2) One of the characteristics of a certificate of deposit is that it can have 

 

 

 

 

 

high interest-rate risk. 

low safety for savers. 

limited liquidity. 

a variable rate of return. 

no minimum deposit amount. 

Question 16. Question : (TCO 2) On a savings account, the rate of return can also be referred to as 

 

 

 

 

liquidity. 

compounding. 

yield. 

insolvency.

asset management. 

Question 17. Question : (TCO 2) A savings account in which interest is compounded _____ would have 

the highest effective yield. 

 

 

 

 

 

daily 

annually 

semiannually 

monthly 

weekly 

Question 18. Question : (TCO 2) At times, funds deposited in an account may be restricted by_____. 

 

 

 

 

 

a holding period 

outstanding checks 

interest earned 

service charges 

electronic banking 

Question 19. Question : (TCO 2) Service fees would be _____ in the bank reconciliation process. 

 

 

 

 

added to the bank statement balance 

subtracted from the bank statement balance 

added to the checkbook balance 

subtracted from the checkbook balance 

Question 20. Question : (TCO 2) When an individual borrows money to purchase a new home, he or 

she will be charged a _____. 

 

 

 

 

 

prime rate 

discount rate 

mortgage rate 

Treasury bond rate 

corporate bond 


1. Question : (TCO 3) Examples of _____ include automobile and installment loans for purchasing 

furniture or appliances. 

 

 

 

 

 

a line of credit 

a credit card loan 

open-end credit 

closed-end credit 

convenience credit

Question 2. Question : (TCO 3) The maximum percentage of your net income that should be spent on 

credit purchases is recommended to be _____. 

10% 

20% 

30% 

40% 

50% 

Question 3. Question : (TCO 3) One of the concerns and risks associated with cosigning is that 

 

 

 

 

 

you are not being asked to guarantee the debt. 

it is not your legal responsibility to pay the debt. 

you’ll have to pay up to the full amount of the debt if the borrower does not pay. 

the creditor must first try to collect from the borrower. 

the creditor cannot garnish your wages. 

Question 4. Question : (TCO 3) Dividing monthly debt payments (not including house payments) by net 

monthly income will allow you to calculate your _____. 

 

 

 

 

 

net-worth-to-debt ratio 

debt-payments-to-income ratio 

liability status 

credit capacity status 

income-to-liability ratio 

Question 5. Question : (TCO 3) In determining your credit capacity, you first provide for basic 

necessities, such as 

 

 

 

 

 

furniture. 

home furnishings. 

mortgage or rent. 

automobiles. 

durable goods. 

Question 6. Question : (TCO 3) If you ask to review your file within _____ days of being notified of a 

denial based upon a credit report, the credit bureau cannot charge you a disclosure fee. 

10 

60 

30 

40 

20

Question 7. Question : (TCO 3) If a bank needs to examine the value of a specific asset when you are 

applying for a loan, this process refers to which aspect of the five Cs of lending? 

 

 

 

 

 

Character 

Capacity 

Collateral 

Capital 

Conditions 

Question 8. Question : (TCO 3) When reviewing your credit file, if you find that there is information that 

is incorrect, then 

 

 

 

 

 

there are legal remedies available to you. 

you have no legal remedies. 

credit bureaus are not required to change it. 

you can’t really do much about it. 

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

Question 9. Question : (TCO 3) All of the following reasons are reasonable situations when you would 

decide to use credit except 

 

 

 

 

borrowing for a stay in a hospital because of appendicitis. 

borrowing to pay for your expensive dinner and movie every week. 

borrowing to buy a printer for your home office now because you know it will be twice as 

expensive in 2 years. 

borrowing to purchase a car so that you can go to work full time. 

Question 10. Question : (TCO 3) Mary Jones has obtained a loan that must be paid over the next 12 

months and she will use this money for a vacation. What type of credit is being used? 

 

 

 

 

 

Installment sales credit 

Incremental credit 

Single lump sum credit 

Revolving credit 

Installment cash credit 

Question 11. Question : (TCO 3) By evaluating your credit options, you can do all of the following except 

 

 

 

 

 

reduce your finance charges. 

reconsider your decision to borrow money. 

discover a less expensive type of loan. 

find a lender that charges a lower rate. 

purchase goods and services without specific limitations.

Question 12. Question : (TCO 3) While collateralized loans may provide lower interest rates, these loans 

have a disadvantage because 

 

 

 

 

 

the loan must be repaid in a short period of time. 

you ruin your credit rating. 

the loan is difficult to obtain. 

commercial banks do not make such loans. 

the assets used as collateral are tied up until the loan has been repaid. 

Question 13. Question : (TCO 3) Referring to trends in credit union membership, it can be observed that 

membership has been 

restricted by the Tax Reform Act of 1986. 

declining gradually. 

static. 

growing steadily. 

restricted by state laws. 

Question 14. Question : (TCO 3) Which one of the following is a signal of a potential debt problem? 

 

 

 

 

 

Paying the maximum balance due each month 

Borrowing money to pay old debts 

Using savings to pay for major purchases 

Receiving notice of prompt payment from creditors 

Occasionally working overtime and moonlighting 

Question 15. Question : (TCO 3) Allison Smith starts the month with a balance of $1,100 on her credit 

card. On the 10th day of the month, she purchases $200 in clothes with her credit card. On the 15th day 

of the month, she makes a payment on her credit card of $500. The average daily balance for the month 

including the new purchase is $883. The average daily balance for the month excluding the new purchase 

is $750. Allison’s interest rate is 1.5% for the month. Allison’s bank calculates the finance charge on the 

credit card by using the adjusted balance method. What would Allison’s finance charges be for the 

month? 

$7.50 

$9.00 

$11.25 

$13.25 

$16.50 

Question 16. Question : (TCO 3) Jerry Dean starts the month with a balance of $1,500 on his credit 

card. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of 

the month, he makes a payment on his credit card of $500. The average daily balance for the month

including the new purchase is $883. The average daily balance for the month excluding the new purchase 

is $750. Jerry’s interest rate is 1.5% for the month. Jerry’s bank calculates the finance charge on the 

credit card by using the previous balance method. What would Jerry’s finance charges be for the month? 

$7.50 

$13.25 

$15.00 

$22.50 

$18.00 

Question 17. Question : (TCO 3) If Jeff rushes to purchase a home by obtaining an interest-only loan, 

and the reason why he wants a home is because he wants to have a house just like the one that his 

parents had when he was a teenager, this is an example of which of the following? 

 

 

 

 

 

Misunderstanding or lack of communication 

The use of money to punish 

Overindulgence of children 

Keeping up with the Joneses 

The expectation of instant comfort 

Question 18. Question : (TCO 3) Steve has three children and has purchased each of them his or her 

own TV that is placed in his or her respective room. Which reason for indebtedness is this an example of? 

 

 

 

 

 

Misunderstanding or lack of communication 

Overindulgence of children 

The expectation of instant comfort 

Keeping up with the Joneses 

The use of money to punish 

Question 19. Question : (TCO 3) _____ families rely heaviest on student loans to finance college. 

 

 

 

 

Low-income 

Middle-income 

High-income 

Large Small 

Question 20. Question : (TCO 3) If Tracy Sears borrows $1,250 for 1 year with an APR of 9% with no 

service fees, what is her total cost of credit? 

$125 

$112.50 

$7.50 

$9.38 

$0


1. Question : (TCO 5) Which of the following statements is false? 

 

 

 

 

 

No one is going to make you save the money; you need to start a program. 

To be useful, investment objectives must be very specific. 

Investment goals can be different for each individual. 

Because investment objectives deal with the future, it is useful to plan more than 5 years in the 

future. 

A long-term investment objective involves a time period of 2 years or less. 

Question 2. Question : (TCO 5) If an investment objective is considered to be long term, then this 

means the goal should be achieved in what time frame? 

 

 

 

 

 

Less than 2 years 

In 2–5 years 

More than 5 years 

Less than 1 year 

None of the above 

Question 3. Question : (TCO 5) You currently hold a $1,000 corporate bond; however, if interest rates in 

the overall economy decrease, which of the following is most likely to be the market value of this bond? 

The bond is worthless. 

$1,000 

$900 

$1,100 

It is impossible to determine whether the bond’s value will increase or decrease. 

Question 4. Question : (TCO 5) Which of the following individuals should have the highest tolerance for 

risk? 

 

 

 

 

 

Joan Cummings, who is a single mother with two small children 

Darren Carter, who works for American Airlines and is worried that he is going to be laid off soon 

Barry Parks, who is an investment banker and earns over $200,000 per year 

Michael Clark, who is 74 years old and been retired for 6 years 

Fred Funderbunk, who delivers pizzas and makes about $15,000 per year 

Question 5. Question : (TCO 5) Mary Ann recently received a $20,000 gift from her uncle and is 

considering investing in stocks, because she knows that historically they have earned an approximately 

10–12% rate of return over the last few years. Referring to aspects of investing, Mary Ann is most 

concerned about which of the following? 

 

 

Risk 

Return

Diversification 

Liquidity 

Income 

Question 6. Question : (TCO 5) A $1,000 corporate bond pays 7.5% a year. What is the annual interest 

you will receive? 

$1,075 

$7.50 

$0.75 

$75.00 

$0 

Question 7. Question : (TCO 5) _____ risk occurs when an investment does not keep up with increasing 

price levels in our economy. 

 

 

 

 

 

Market 

Interest 

Inflation 

Business failure 

Current 

Question 8. Question : (TCO 5) John Farmer recently received a legal form from the company where he 

owns stocks that list the issues to be decided at the annual stockholders’ meeting. The item asks that he 

signs something that allows someone else to vote for him. What has he received? 

 

 

 

 

 

Equity 

Proxy 

Voting rights 

Dividends 


Question 9. Question : (TCO 5) Matt Dannon just bought the stock of a company that provides him with 

the responsibility to approve major company actions. Which one of the following best characterizes this 

responsibility? 

 

 

 

 

 

Voting rights 

Proxy 

Equity 

Dividends 

None of the above

Question 10. Question : (TCO 5) If Orlando Blodgett is buying the stock of the Getaway Caribbean 

Cruise Company. If he buys the stock today, knowing it is the first day it is selling without the dividend for 

this quarter, on what date is Orlando buying the stock? 

 

 

 

 

 

Record date 

Sale date 

Payment date 

Ex dividend date 


Question 11. Question : (TCO 5) Lindsey Holt owns stock in the Galloway Gems Company. She knows 

she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which 

type of stock? 

 

 

 

 

 

Preferred 

Common 

Blue chip 

Growth 

Penny 

Question 12. Question : (TCO 5) Dividends must be approved by a firm’s board of directors, and 

 

 

 

 

 

dividend payments are paid out of profits. 

dividends are guaranteed. 

dividends are paid before a firm’s taxes are paid. 

dividends are usually paid twice a year. 

dividends can be paid forever. 

Question 13. Question : (TCO 5) One option for long-term corporate financing is equity financing, and 

this is a popular choice because 

 

 

 

 

 

a lender is always available to provide this type of financing. 

it does not cost anything to sell in the primary market. 

repayment doesn’t have to be made for 10 years or more. 

only interest must be paid for the first 5 years. 

it does not have to be repaid. 

Question 14. Question : (TCO 5) Dividends will remain with the stock until 

 

 

 

 

 

5 days after the date of record. 

two business days after the date of record. 

5 days before the date of record. 

two business days before the date of record. 

5 days before the actual payment date.

Question 15. Question : (TCO 5) Nancy Groom owns one $1,000 corporate bond issued by Chevron. 

The bond has a yield of 10% and pays 8% interest semiannually. How much interest will Ms. Groom 

receive in 1 year? 

$50 

$100 

$80 

$40 

$1,000 

Question 16. Question : (TCO 5) Which of the statements below is false? 

 

 

 

 

 

Stock is a form of equity capital. 

Stock does not have a maturity date. 

Bonds are a form of debt capital. 

Bonds do not have to be repaid at maturity. 

Interest payments are made to bondholders. 

Question 17. Question : (TCO 5) All of the statements are false except for which? 

 

 

 

 

 

Convertible corporate bonds are more secure than government bonds. 

Convertible bonds often pay 3–4% more interest than nonconvertible bonds. 

Because of the conversion feature, it is not necessary to evaluate convertible corporate bonds. 

Even if convertible bondholders convert their investment to common stock, the bondholders still 

receive interest payments. 

In reality, there is no guarantee that bondholders will convert to common stock even if the market 

value of the common stock does increase in value. 

Question 18. Question : (TCO 5) You have been thinking about investing in corporate bonds, but are 

seeking the most secure bond investment possible. Most likely, you would want to select _____ bonds. 

 

 

 

 

 

debenture 

subordinated 

indenture 

convertible 

mortgage 

Question 19. Question : (TCO 5) A(n) _____ fund is a fund to which annual or semiannual deposits are 

made for the purpose of redeeming a bond issue. 

 

 

 

 

 

serial 

indenture 

debenture 

sinking 

money

Question 20. Question : (TCO 5) _____ bonds are a part of a single issue, but they mature on different 

dates. 

 

 

 

 

 

Serial 

Mortgage 

Sinking fund 

Subordinate 

Debenture 


1. Question : (TCO 1) Referring to consumer purchases, an example of a personal opportunity cost is 

 

 

 

 

 

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. 

Question 2. Question : (TCO 1) The purpose of a cooperative is to 

 

 

 

 

 

solve consumer complaints. 

test consumer products for quality. 

lobby for changes in consumer protection laws. 

obtain brand-name items for less than wholesale. 

sell products or services to members at reduced prices. 

Question 3. Question : (TCO 1) _____ brand items are associated with high consistent quality. 

 

 

 

 

 

National 

Generic 

Regional 

Store 

Manufacturer 

Question 4. Question : (TCO 1) A 16-ounce package selling for $1.80 would have a unit price of 

$1.80. 

$28.80 a pound. 

11.25¢ an ounce. 

$8.80 a quart. 

12¢ an ounce. 

Question 5. Question : (TCO 1) A(n) _____ warranty is a specific agreement created by the seller or 

manufacturer.

open 

implied 

express 

contingent 

limited 

Question 6. Question : (TCO 1) The purpose of the _____ is to assist with consumer complaints and 

also to provide consumer information. 

 

 

 

 

 

Better Business Bureau 

Federal Trade Commission 

Underwriters Laboratories 

Consumers Union 

Consumer Action 

Question 7. Question : (TCO 1) The difference between mediation and arbitration is that the latter 

 

 

 

 

 

involves government officials. 

is legally binding. 

is only available in certain states. 

allows compromise through negotiation. 

requires the use of a lawyer. 

Question 8. Question : (TCO 1) In order for a class action suit to be taken and also to be valid, it must 

 

 

 

 

 

be a legal problem against a government agency. 

cover an amount less than the limit set by the state. 

be a case that would not be handled by an attorney. 

involve low-income individuals. 

involve several people with the same problem. 

Question 9. Question : (TCO 1) When a used car has an implied warranty, this means that 

 

 

 

 

 

major repairs are the responsibility of the seller. 

government agencies will repair safety defects. 

the vehicle must be in operating condition. 

hidden defects will be repaired at no cost to the buyer. 

a vehicle must operate properly for at least 1 year. 

Question 10. Question : (TCO 1) When reviewing the Edmund’s Guide, you will find information 

pertaining to 

 

 

 

 

 

safety problems of existing vehicles. 

price data. 

sales of stolen vehicles. 

cars available for sale from government agencies. 

car repairs.

Question 11. Question : (TCO 3) When buying a home, one additional cost of ownership will consist of 

 

 

 

 

 

renter’s insurance. 

property taxes. 

annual appreciation of the property. 

the security deposit. 

interest lost on the security deposit. 

Question 12. Question : (TCO 3) A home owner will often realize a benefit of 

 

 

 

 

 

a low security deposit. 

increased property value. 

the amortization of the growth of equity. 

the tax deductibility of the down payment. 

low maintenance. 

Question 13. Question : (TCO 3) An individual could afford to spend more on a home if the following 

occurs. 

 

 

 

 

 

High monthly living expenses 

Increased interest rates 

Decreased down payment 

Many other financial obligations 

Increased family income 

Question 14. Question : (TCO 3) The purpose of a real estate agent is to assist an individual in 

 

 

 

 

 

obtaining funds for a down payment. 

setting the purchase price. 

offering new home warranties. 

getting a mortgage. 

making important calls. 

Question 15. Question : (TCO 3) Todd Foley is applying for a $100,000 mortgage. He can get a $600 

monthly payment for principal and interest and no points, or a $550 monthly payment with one point. How 

many months will it take Todd to cover the cost of the discount points if he takes the lower monthly 

payment? 

6 

12 

20 

2 

25 

Question 16. Question : (TCO 3) An example of a conventional mortgage would be

an FHA mortgage. 

a buy-down. 

a home equity loan. 

a shared appreciation mortgage. 

a fixed-rate mortgage. 

Question 17. Question : (TCO 3) A(n) _____ is an interest rate subsidy provided by a builder or real 

estate developer to assist with home affordability. 

 

 

 

 

 

FHA-insured loan 

balloon mortgage 

growing equity mortgage 

shared appreciation mortgage 

buy-down 

Question 18. Question : (TCO 3) When _____, homeowners may consider refinancing their mortgage. 

 

 

 

 

 

interest rates rise 

two or more points are required by the lender at the time of closing 

the escrow account balance declines 

interest rates fall 

property values decrease 

Question 19. Question : (TCO 3) You should still contact and use a(n) _____ if you sell your home 

without the use of a real estate agent. 

 

 

 

 

 

broker 

insurance agent 

rental agent 

contractor 

lawyer 

Question 20. Question : (TCO 3) If Jennifer Garland lives in a home assembled in a factory that was 

then moved to the living site, she is most like living in a 

 

 

 

 

 

condominium. 

prefabricated home. 

cooperative. 

duplex. 

single family dwelling. 


1. Question : (TCO 4) _____ risks refer to potential losses due to negligence resulting in bodily harm or 

property damage to others.

Speculative 

Liability 

Property 

Personal 

Commercial 

Question 2. Question : (TCO 4) If you decide to install a new home security system with cameras, this is 

an example of _____ risk. 

 

 

 

 

 

shifting 

accepting 

transferring 

sharing 

reducing 

Question 3. Question : (TCO 4) The failure to take ordinary and reasonable care is referred to as 

 

 

 

 

 

negligence. 

a benefit. 

damage. 

high risk. 

a hazard. 

Question 4. Question : (TCO 4) If a worker damages your home while painting several rooms, and you 

take action against the worker’s employer to cover the cost of the damage, this is an example of a(n) 

_____ liability. 

 

 

 

 

 

umbrella 

vicarious 

common situation 

peril 

assigned 

Question 5. Question : (TCO 4) Which of the following is not considered personal property for home 

insurance coverage? 

 

 

 

 

 

An automobile 

A garage 

Furniture 

Appliances 

A permanently installed air conditioning unit 

Question 6. Question : (TCO 4) State Farm has provided a quote to you for an umbrella policy. This type 

of policy provides coverage for

expensive personal property. 

additional buildings on your property. 

property when traveling away from home. 

major personal liability suits. 

flood damage. 

Question 7. Question : (TCO 4) When obtaining a home insurance policy, you will find that most will 

already provide coverage for 

 

 

 

 

 

earthquake damage. 

flood damage. 

medical payments. 

personal property floaters. 

an umbrella liability. 

Question 8. Question : (TCO 4) If claims need to be settled based on the current replacement cost of a 

damaged or lost item less depreciation, then the _____ method should be used. 

 

 

 

 

 

replacement value 

actual cash value 

umbrella 

endorsement 

personal property floater 

Question 9. Question : (TCO 4) Your home insurance policy has a $250 deductible. If a small fire 

causes $900 of damage to your home, what amount of the claim would the insurance company pay? 

$250 

$0 

$900 

$650 

Not able to determine from this information 

Question 10. Question : (TCO 4) _____ coverage pays for medical care for people who were injured in 

your automobile. 

 

 

 

 

 

Comprehensive 

Bodily injury liability 

Collision 

Medical payments 

No-fault insurance 

Question 11. Question : (TCO 4) The 50 in 100/300/50 refers to _____ coverage. 

 

 

collision 

bodily injury liability

property damage liability 

medical payments 

comprehensive physical damage 

Question 12. Question : (TCO 4) If Lisa Johnson is in an accident and the other driver is legally at fault, 

_____ coverage would pay for damage to her vehicle. 

 

 

 

 

 

uninsured motorists protection 

collision 

comprehensive physical damage 

property damage liability 

assigned risk 

Question 13. Question : (TCO 4) Individuals and families purchase life insurance primarily to 

 

 

 

 

 

pay liability claims resulting from accidents. 

fill financial needs created by the loss of the breadwinner. 

fund lavish retirement vacations. 

keep up with people with a similar financial situation. 

make early retirement possible. 

Question 14. Question : (TCO 4) You probably have little or no need for life insurance if you are 

 

 

 

 

 

a single person living alone or with parents. 

divorced and have two children. 

married and your spouse works. 

gainfully employed. 

a household with several children. 

Question 15. Question : (TCO 4) Your annual income is $50,000. What is your life insurance need 

based on the easy method? 

$245,000 

$300,000 

$345,000 

$400,000 

$450,000 

Question 16. Question : (TCO 4) Which type of insurance is sometimes called temporary insurance? 

 

 

 

 

 

Whole life 

Term 

Straight life 

Ordinary life 

Modified life

Question 17. Question : (TCO 4) All of the following are innovative ways that concerned groups are 

containing healthcare costs except for 

 

 

 

 

 

the establishment of incentives to encourage preventive care. 

encouraging the use of prepaid group practices. 

the establishment of community education programs so people can learn to take better care of 

themselves. 

encouraging doctors to pay cash for routine medical costs. 

picketing at hospitals and physician offices. 

Question 18. Question : (TCO 4) In order to reduce your healthcare costs, you should do your best to 

 

 

 

 

 

live dangerously. 

gain a little extra weight. 

smoke and drink. 

stay well. 

not seek medical care. 

Question 19. Question : (TCO 4) Because coverage and costs can vary from company to company, it is 

important to shop carefully for _____ coverage. 

 

 

 

 

 

group health 

individual health 

hospital expense 

surgical expense 

physician’s expense 

Question 20. Question : (TCO 4) A(n) _____ policy might not cover all of your health insurance needs or 

may deny benefits if you lose your job. 

 

 

 

 

 

comprehensive medical 

individual health 

basic health 

group health 

disability income 


1. Question : (TCOs 6 and 7) The Capitalist Mutual Fund’s portfolio is valued at $48 million. The fund 

has liabilities of $4 million, and the investment company sponsoring the fund has issued 1,600,000 

shares. What is the fund’s net asset value? 

$48.00 

$30.00 

$36.66

$27.50 

$1 

Question 2. Question : (TCOs 6 and 7) A(n) _____ mutual fund is one in which no sales charge is paid 

by the individual investor. 

 

 

 

 

 

closed-end 

open-end 

no-load 

load 

convertible fund 

Question 3. Question : (TCOs 6 and 7) The All-Star Basic Value Fund’s portfolio is valued at $215 

million. The fund has liabilities of $5 million, and the investment company sponsoring the fund has issued 

15 million shares. What is the fund’s net asset value? 

$14.33 

$14.00 

$21.50 

$21.00 

$3.00 

Question 4. Question : (TCOs 6 and 7) A(n) _____ fund is a mutual fund that invests in stocks issued by 

companies with a long history of paying dividends. 

 

 

 

 

 

balanced 

equity income 

industry 

sector 

money market 

Question 5. Question : (TCOs 6 and 7) A mutual fund that invests in the common stocks of companies 

in the same industry is called a(n) _____ fund. 

 

 

 

 

 

growth-income 

income 

sector 

small-cap 

money market 

Question 6. Question : (TCOs 6 and 7) The two real estate investment classifications consist of 

 

 

 

participating or nonparticipating. 

common or preferred. 

cumulative or noncumulative.

direct or indirect. 


Question 7. Question : (TCOs 6 and 7) Single-family houses are typically expected to observe the 

following pattern. 

 

 

 

 

 

Values tend to rise, providing a possible hedge against inflation. 

Values rise less than the Consumer Price Index. 

Values remain stable in the northern parts of the United States. 

Values tend to rise in New England states, but decline in the South. 

Values remain unchanged in the United States. 

Question 8. Question : (TCOs 6 and 7) Which REIT pools money to finance construction loans? 

 

 

 

 

 

Mortgage REIT 

Compound REIT 

Hybrid REIT 

Simple REIT 

Equity REIT 

Question 9. Question : (TCOs 6 and 7) You should invest in _____ if you want a risk-proof real estate 

investment. 

 

 

 

 

 

REITs 

real estate limited partnerships 

participation certificates (PCs) 

real estate syndicates 

Post Office buildings 

Question 10. Question : (TCOs 6 and 7) You have purchased a condominium in Orlando, FL in order to 

rent out rooms to vacationers. What type of investment have you made? 

 

 

 

 

 

Direct investment in real estate 

Indirect investment in real estate 

Investment in precious metals 

Investment in collectibles 

Investment in gems 

Question 11. Question : (TCOs 6 and 7) By the time you reach your _____ birthday, you should have 

established a comprehensive retirement plan. 

 

 

 

 

 

25th 

35th 

45th 

55th 

65th

Question 12. Question : (TCOs 6 and 7) The average life expectancy of a woman at age 65 is 

 

 

 

 

 

9 years. 

16 years. 

13 years. 

11 years. 

19 years. 

Question 13. Question : (TCOs 6 and 7) If your mortgage is largely or completely paid off, then you may 

be eligible for a 

 

 

 

 

 

reverse mortgage annuity. 

variable annuity. 

mortgage advance. 

regional-based annuity. 

mortgage package. 

Question 14. Question : (TCOs 6 and 7) The of division of pensions in a divorce situation primarily 

depends on the _____. 

 

 

 

 

length of the divorce period 

husband’s generosity 

length of the marriage 

judge’s decision 

Question 15. Question : (TCOs 6 and 7) When you retire, which one of the following expenditures is 

likely to decrease? 

 

 

 

 

 

Medical expenses 

Insurance expenses 

Clothing expenses 

Expenses for leisure activities 

Gifts and contributions 

Question 16. Question : (TCOs 6 and 7) Estate planning involves all but which of the following? 

 

 

 

 

 

Managing your property while you are alive 

Dealing with what happens to that property after your death. 

Your family’s financial security in the event of your death 

Your family’s financial security in the event of your spouse’s death 

Deciding on working part time into retirement age 

Question 17. Question : (TCOs 6 and 7) _____ refers to what Gerald Wilkins has in his possession and 

owns, including a home worth $250,000, a car worth $15,000, various investments worth $600,000, and 

other personal assets worth $25,000.

A trust 

A will 

An estate 

Probate 


Question 18. Question : (TCOs 6 and 7) If you do not have a valid will when you die, 

 

 

 

 

 

the IRS confiscates your property. 

the federal court decides how the property should be distributed. 

your relatives or friends will get the property. 

your local custom will determine how the property is distributed. 

the state’s law of descent and distribution becomes your will. 

Question 19. Question : (TCOs 6 and 7) Which is a will that leaves everything to your spouse when you 

die? 

 

 

 

 

A stated dollar amount will 

A traditional marital share will 

An exemption trust will 

A simple will 

Question 20. Question : (TCOs 6 and 7) Under a(n) _____, everything will pass to your spouse when 

you die, with the exception of an amount equal to the exemption, which passes into trust. 

 

 

 

 

 

simple will 

traditional marital share will 

exception will 

stated dollar amount will 

exemption trust will

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