Semester 2 Exam

Question 1

T/F

US savings bonds are considered a tax-exempt or tax-free investment choice

Answer 1

True

Question 2

T/F

Today, more employers are offering employer-sponsored retirement plans than they were in the past

Answer 2

False

Question 3

T/F

Earnings from tax-deferred investments are completely free from tax

Answer 3

False

Question 4

T/F

Stocks are shares of ownership in a corporation

Answer 4

True

Question 5

T/F

Money in a savings account is considered to be a safe and liquid investment

Answer 5

True

Question 6

Unexpected emergencies or other unplanned events are known as…

Answer 6

Contingencies

Question 7

Which of the following goals would be considered a long term goal?

Answer 7

Owning a house

Question 8

Which of the following types of investment risk could occur as a result of a company’s poor management or product recalls?

Answer 8

Stock risk

Question 9

Which of the following types of investment risk could occur if prices, in general, rise faster than the return on investment?

Answer 9

Inflation risk

Question 10

A long term, planned approach to making investments is called…

Answer 10

Systematic investing

Question 11

T/F

A money-market deposit account at a bank is a high-risk investment because it is not insured

Answer 11

False

Question 12

T/F

A typical CD is not a liquid investment because you must pay a penalty if you withdraw the money before the stated time

Answer 12

True

Question 13

T/F

Series EE U.S. Savings Bonds are subject to federal income tax, unless they are used to finance education

Answer 13

True

Question 14

T/F

A premium bond is one that sells for less than its face value

Answer 14

False

Question 15

T/F

Investment grade corporate bonds have high ratings and are considered fairly low risk

Answer 15

True

Question 16

Which of the following investments is a medium risk choice?

Answer 16

Mutual funds

Question 17

Which of the following types of investments is a form of an indirect investment?

Answer 17

Mutual funds

Question 18

Which of the following types of bonds can be exchanged for shares of common stock?

Answer 18

Convertible bond

Question 19

Which of the following investment options is illiquid?

Answer 19

Real estate

Question 20

A corporate bond is redeemed for its…

Answer 20

Face value

Question 21

T/F

Business Week and Fortune are examples of magazines that contain information related to investing

Answer 21

True

Question 22

T/F

Major newspapers typically do not include a section about business and investing

Answer 22

False

Question 23

T/F

Re-investing allows stockholders to buy new shares of stock at a reduced price from a stockbroker

Answer 23

False

Question 24

The NYSE is an auction market where stock is sold to the highest bidder

Answer 24

True

Question 25

Using the OTC market to buy stocks is an example of direct investing

Answer 25

False

Question 26

Which of the following transactions is a request to buy or sell stock at the current price?

Answer 26

Market order

Question 27

Which of the following figures compares the selling price of stock to the annual profits per share?

Answer 27

Price earnings ratio

Question 28

Which of the following organizations is a private, nonprofit organization that regulates firms selling securities in the US?

Answer 28

Financial Industry Regulatory Authority

Question 29

Which of the following government agencies is responsible for the economic security of the US?

Answer 29

US Department of the Treasury

Question 30

The MyMoney.gov and My Money Tool Kit for Consumers are provided by the...

Answer 30

US Financial Literacy and Education Commission

Question 31

T/F You need to read newspapers and magazines to keep up with what is going on in the world

Answer 31

True

Question 32

T/F Unless the employer requests that it be typed, a letter of application should be handwritten

Answer 32

False

Question 33

T/F Employers do not have the right to monitor an employee's email

Answer 33

False

Question 34

Which of the following is a true statement about new employees?

Answer 34

They should follow the rules exactly

Question 35

T/F The more allowances you are able to claim on your W-4, the more federal tax will be withheld from your paycheck

Answer 35

False

Question 36

T/F If you lose your social security card, you may apply and receive a new number

Answer 36

False

Question 37

The Fair Labor Standards Act established...

Answer 37

Minimum wages