Personal Finance - Final Exam 9

Personal Finance – Final Exam 9 ● Warning: These answers have not been validated or corrected. Question 1 Answer saved Marked out of 1.00 Question text Investments in gold, silver, and other precious metals __________. Select one: a. threaten the value of currency. b. lose their value during times of turmoil. c. serve as a hedge against inflation. d. have low transaction costs. e. are more liquid than cash. Question 2 Answer saved Marked out of 1.00 Remove flag Question text An effect of deflation is that your money __________. Select one: a. is worth more and buys more. b. is worth less and buys less. c. has less purchasing power. d. is less useful as a medium of exchange. e. is more stable. Question 3 Answer saved Marked out of 1.00 Flag question Question text Giving someone the unlimited right to make legal and financial decisions on your behalf is __________. Select one: a. a testamentary trust. b. naming an executor. c. durable power of attorney. d. a stated dollar amount will. e. a health care proxy. Question 4 Answer saved Marked out of 1.00 Flag question Question text A balance sheet is a list of __________. Select one: a. assets. b. debts or liabilities. c. equity or net worth. d. a. and b. e. a., b., and c. Question 5 Answer saved Marked out of 1.00 Flag question Question text You insure your dependents against financial hardship after your death through __________. Select one: a. estate taxes. b. long-term disability insurance. c. life insurance. d. a flexible savings account. e. private mortgage insurance. Question 6 Answer saved Marked out of 1.00 Flag question Question text Recession and inflation have decreased the value of your investments. This is an example of __________. Select one: a. economic risk. b. industry risk. c. company risk. d. asset class risk. e. market risk. Question 7 Answer saved Marked out of 1.00 Flag question Question text Direct real estate investments involve __________. Select one: a. owning property. b. renting commercial property. c. owning shares in a company that owns property. d. a. and b. e. a., b., and c. Question 8 Answer saved Marked out of 1.00 Remove flag Question text Your return objective represents __________. Select one: a. your investment risk. b. the annual return needed to meet your goals. c. your time horizon. d. the amount you have to invest to start with. e. your risk tolerance. Question 9 Answer saved Marked out of 1.00 Flag question Question text The time value of money is an important concept in __________. Select one: a. determining the frequency of cash flows. b. valuing a series of future cash flows. c. predicting discount rates. d. adding the number of cash flows. e. identifying the amount of cash flows. Question 10 Answer saved Marked out of 1.00 Remove flag Question text A summary of income and expenses over a period of time is called __________. Select one: a. a balance sheet. b. an income statement. c. net worth. d. a cash flow statement. e. a budget. Question 11 Answer saved Marked out of 1.00 Flag question Question text A will that leaves everything to a spouse is called a __________. Select one: a. simple will. b. holographic will. c. traditional marital share will. d. statutory will. e. living will. Question 12 Answer saved Marked out of 1.00 Flag question Question text The purpose of pro forma financial statements is to show __________. Select one: a. projected future value. b. consequences of choices. c. scenarios for financial planning. d. a. and b. e. a., b., and c. Question 13 Answer saved Marked out of 1.00 Flag question Question text Buying stocks or corporate or government bonds is a way to invest in __________. Select one: a. the capital market. b. the credit market. c. the labor market. d. the buyers’ market. e. the sellers’ market. Question 14 Answer saved Marked out of 1.00 Remove flag Question text Your risk tolerance represents __________. Select one: a. your wealth or net worth. b. the amount of money you stand to lose. c. your ability or willingness to take chances. d. the amount of time separating you from your money. e. your return objective. Question 15 Answer saved Marked out of 1.00 Flag question Question text Investment risks include all the following EXCEPT __________. Select one: a. default risks. b. economic risks. c. industry and company risks. d. asset class risks e. market risks. Question 16 Answer saved Marked out of 1.00 Flag question Question text The Accounting Equation states that __________. Select one: a. Assets – Debt = Net Worth. b. Assets = Liabilities + Equity. c. Assets = Debt + Net Worth d. Assets = Income – Cash Flows. e. Assets + Debt = Liquidity Question 17 Answer saved Marked out of 1.00 Remove flag Question text A calculation showing your mortgage payment per $1,000 of the loan is the mortgage __________. Select one: a. interest rate. b. maturity date. c. factor. d. principal. e. amortization. Question 18 Answer saved Marked out of 1.00 Flag question Question text In performing an attribute analysis you compare products in terms of __________. Select one: a. their demand or popularity and resale value. b. the characteristics most important to you. c. price and the cost of maintenance or repair. d. the transaction costs in relation to quality. e. their appearance and performance. Question 19 Answer saved Marked out of 1.00 Flag question Question text An investment policy statement outlines __________. Select one: a. an investor’s return objectives, risk preferences, and constraints. b. an investment advisor’s approach to applying portfolio theory. c. an institution’s goals and investment decisions. d. an investment firm’s disclosures to clients. e. a company’s disclosures to investors. Question 20 Answer saved Marked out of 1.00 Flag question Question text A comprehensive budget may include any of the following components EXCEPT __________. Select one: a. a specialized budget. b. a tax budget. c. a cash flow statement. d. an operating budget. e. a capital budget.