Personal Finance Exam Questions and Answers, Exams of Nursing

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Question And Answers 2024

Question : To qualify for a Federal Housing Administration (FHA) loan, a person must generally A: have at least a high school diploma. B: have one-quarter of the cost of the home for a down-payment. C: fulfill income guidelines. D: provide two individuals to co-sign the loan. - correct answers ✅C: fulfill income guidelines. A high school student has begun to investigate the field of finance as a career choice. In deciding about the field, the student should focus on which question first? A: Will I find a balance between financial rewards and personal satisfaction from work? B: How many people do I know who work in this field? C: Once I train for this area, how long before I will be at the top of the field? D: Are there people in this field who are dissatisfied with their jobs? - correct answers ✅A: Will I find a balance between financial rewards and personal satisfaction from work?

Question And Answers 2024

A: Will I find a balance between financial rewards and personal satisfaction from work? Reason : It is important to investigate a career with the idea of not only getting a sense of earning potential, types of positions available and the training necessary to acquire these positions but what are the chances that the individual will enjoy working in this field. - correct answers ✅D: An ATM transaction A company offers a defined-contribution pension plan which means that upon retirement the employee will receive A: one-half of the employee's last year's salary. B: the total amount of money contributed plus investment earnings. C: an amount of money based only on the length of time the employee worked for the company. D: a specified amount of money based totally on the profit earned by the company while the employee worked there. - correct answers ✅B: the total amount of money contributed plus investment earnings.

Question And Answers 2024

The interest earned on United States Series EE Savings Bonds is A: exempt from state and local taxes. B: paid in a lump sum at the time the face value on the bond is reached. C: equal to the money paid to purchase it. - correct answers ✅A: exempt from state and local taxes. Reason : The interest rate on US savings bonds is exempt from state and local taxes. Buying a treasury bill (T-bill) is best for investors who are looking for A: a place to invest between $100-$500. B: a secure, low risk investment. C: a higher yield on their investment than corporate bonds offer. D: an investment that matures in 10-30 years. - correct answers ✅B: a secure, low, risk investment.

Question And Answers 2024

Reason : These bills are backed by the full faith and credit of the US government, therefore considered relatively risk free. Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the A: investor will pay only $5000 for the shares. B: investor is buying 2000 shares. C: brokerage firm is lending the investor 50% of the money. D: brokerage firm will own 50% of the 1000 shares of stock that were purchased. - correct answers ✅C: brokerage firm is lending the investor 50% of the money. Reason : Margin is a speculative method whereby an investor borrows up to 50% of the money needed from a brokerage firm in order to buy a wanted stock and pays a fee for the privilege. To determine the time value of depositing $100 in a savings account, a person needs to know the interest rate and A: her total income.

Question And Answers 2024

B: the rate of inflation. C: whether the account is FDIC protected. D: whether the bank offers overdraft protection. - correct answers ✅B: the rate of inflation. The amount a lender charges to borrow money is called the: A: Principal B: Annual Percentage Rate (APR) C: Loan balance D: Finance charge - correct answers ✅Correct Answer : D: Finance charge The cost to use someone else's money for a period of time is called the: A: Interest rate expressed as a percentage B: Opportunity cost C: Minimum payment D: Inflation rate - correct answers ✅A: Interest rate expressed as a percentage

Question And Answers 2024

Reason : Consumers usually pay a price for the goods and services they buy. The cost to buy the right to use someone else's money for a period of time is called the interest rate. Interest earned on interest is known as: A: Simple interest B: True interest C: Compounded interest D: Variable interest - correct answers ✅C: Compounded interest Reason : Compound interest enables the saver to earn interest on the interest that was earned earlier. Money received today is worth more than the same amount of money received sometime in the future is: A: The Rule of 72 B: The time value of money C: Not true D: Investing - correct answers ✅B: The time value of money

Question And Answers 2024

Reason : The time value of money is the concept that money received today is worth more than the same amount of money received in the future. If you receive $100 today, you can put it to work immediately through savings or investing immediately. A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance? A: To reduce the premium on the homeowner's insurance. B: To protect the person who owns the television from liability for damages. C: To show the insurance company a good faith investment has been made. D: To cover the cost of replacement should the television get damaged or stolen. - correct answers ✅D: To cover the cost of replacement should the television get damaged or stolen. For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive

Question And Answers 2024

A: one-fifth of the $20,000 face value. B: $20,000 less the premiums paid. C: a calculated amount of money which includes the premiums paid as well as the interest on that money. D: a calculated amount of money that must be converted to a term life insurance policy. - correct answers ✅C: a calculated amount of money which includes the premiums paid as well as the interest on that money. Reason : The cash value of a whole life insurance policy is based on premiums paid plus some of the interest earned If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the A: US Treasury Department. B: Federal Deposit Insurance Corporation. (FDIC). C: State Banking Commission. D: Federal Reserve Board. - correct answers ✅A: US Treasury Department. Employees prefer direct deposits because:

Question And Answers 2024

A: There is a small fee for the service B: The danger of losing a paycheck is slightly reduced C: The money is generally deposited in their checking account sooner than it would be if they had to deposit it in person D: Direct deposits earn a higher rate of interest - correct answers ✅C: The money is generally deposited in their checking account sooner than it would be if they had to deposit it in person Which documents should be stored in a safe-deposit box? A: Checkbook statements. B: Copies of current and past budgets. C: Current paycheck stubs. D: Mortgage loan papers. - correct answers ✅D: Mortgage loan papers. A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take? A: Notify a credit reporting agency in order to avoid a late

Question And Answers 2024

fee. B: File for bankruptcy in order to maintain ones current credit score. C: Notify the credit card companies in order to negotiate a new payment plan. D: Contact the Internal Revenue Service in order to avoid paying income tax this year. - correct answers ✅C: Notify the credit card companies in order to negotiate a new payment plan. Which statement best describes the relationship between a person's educational level and that person's potential earning power? A: Education has no effect on a person's potential earning power B: A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school C: Attaining a higher educational level affects the earning potential only for people over 40 years old

Question And Answers 2024

D: Attaining a higher educational level decreases potential earning power - correct answers ✅B: A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school Question : Before the Kiss Corporation can issue stocks or bonds, it must register the issue with: A: Its Board of Directors B: The Federal Reserve C: The World Bank D: The Securities and Exchange Commission (SEC) - correct answers ✅D: The Securities and Exchange Commission (SEC) Question :An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split A: 20 shares of the stock and the price of each share is $80.

Question And Answers 2024

B: 40 shares of the stock and the price of each share is $40. C: 80 shares of the stock and the price of each share is $40. D: 80 shares of the stock and the price of each share is $80 - correct answers ✅C: 80 shares of the stock and the price of each share is $40. Question : Why might rising interest rates depress stock prices: A: Stock investors are lured away from interest-paying investments to stocks B: Rising interest rates can result in lower business profits C: Rising interest rates usually means the economy has less D: Rising interest rates can result in higher business profits - correct answers ✅Correct Answer: B: Rising interest rates can result in lower business profits Question :A person is convinced that a lending institution is charging too much interest for a loan. This person should be aware that

Question And Answers 2024

A: there are state usury laws. B: lending institutions all have their rates of interest set by the SEC. C: interest rates depend entirely on the borrower's ability to pay back the loan. D: the Federal Trade Commission has laws against intimidating borrowers. - correct answers ✅Correct Answer A: there are state usury laws. Reason: Charging excessive interest rates on loans is known as "usury" and that practice is prohibited by law. Question :Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the: A: Cash value B: Death benefit or face value C: Separate value D: Premium or annuity value - correct answers ✅Correct Answer: B: Death benefit or face value

Question And Answers 2024

Question :Which statement does NOT accurately describe a characteristic of cash value for whole life insurance? A: Cash value grows gradually over time B: If the policy is cancelled, you may be entitled to some or all of the accrued cash value C: Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value D: When an insured person dies, the beneficiary will receive the death benefit but the insurance company keeps the cash value - correct answers ✅Correct Answer C: Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value Question : Consumer finance companies, which are often advertised on TV, are also known as: A: Banks B: Savings and loan associations C: Small loan companies D: Purchase loan lenders - correct answers ✅C: Small Loan Companies

Question And Answers 2024

Question : A person is depositing $20 in cash and a check for $50. On the checking account deposit slip, the person should A: include the reason that both cash and a check are being deposited. B: indicate what bank issued the check that is being deposited. C: indicate the amount of money that is currently in the checking account as well as in a savings account to cover the check. D: list the cash deposit separately from the check as well as the total of the deposit. - correct answers ✅D: list the cash deposit separately from the check as well as the total of the deposit. Question :Pat has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution? A: Credit union B: Commercial bank C: Savings and loan association D: Investment club - correct answers ✅A. Credit Union

Question And Answers 2024

Question : Scott just got an ATM card to use and must choose a PIN (Personal Identification Number). How should he select a PIN that will give him maximum protection against anyone else being able to find out what the PIN is? A: Use his birth date as his personal identification number B: Use a random selection of letters and numbers C: Use his first initial and last name as his personal identification number D: Use the name of a friend, family member, or pet - correct answers ✅Correct Answer : B: Use a random selection of letters and numbers Question :When money is not used and goods and services are exchanged for other goods and services, this system is called: A: Credit B: Money C: Barter D: Checks - correct answers ✅Correct Answer : C: Barter

Question And Answers 2024

Question : Who benefits the most from inflation? A: Long-term fixed rate borrowers B: Lenders C: Persons on fixed incomes D: The government - correct answers ✅Correct Answer A: Long-term fixed rate borrowers Question : Which of the following is the federal law that requires the cost of credit be disclosed to consumers in bold print on loan agreement? A: Fair Credit Reporting Act B: Equal Credit Opportunity Act C: Truth in Lending Act D: Fair Debt Collection Practices Act - correct answers ✅Correct Answer C: Truth in Lending Act Reason :The Truth in Lending Act requires that the finance charge and annual percentage rate be disclosed to the consumer in advance and specifies how the annual percentage rate must be calculated.

Question And Answers 2024

Question :Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of: A: An installment payment B: A savings plan C: An ATM transaction D: A debit card transaction - correct answers ✅Correct Answer :B: A savings plan Question :Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid? A: Cash B: Certified check C: Cashiers check D: A check - correct answers ✅Correct Answer : D: A check Question : The financial institution where Ms. Sanchez has her checking account will continue to pay out money for the checks she writes as long as:

Question And Answers 2024

A: She uses checks from her checkbook B: The financial institution has sufficient funds C: There is enough money in Ms. Sanchez's account to cover the amount of the checks D: She maintains a good record of deposits and handles her account responsibly - correct answers ✅Correct Answer : C: There is enough money in Ms. Sanchez's account to cover the amount of the checks Question : A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying A: more of the same stock. B: stocks that are similar to those already owned. C: preferred stock in the corporation. D: bonds in the corporation. - correct answers ✅Correct Answer : A: more of the same stock. Question : A pharmacy is to drugs as the American Stock Exchange is to: A: Interest B: Stock advisors

Question And Answers 2024

C: Securities D: Mutual funds - correct answers ✅Correct Answer C: Securities Question : The annual percentage rate (APR) is: A: The true cost of credit that must be disclosed on a loan agreement B: Always expressed in dollars C: Required by the Securities Exchange Commission D: Required by the Comptroller of the Currency - correct answers ✅Correct Answer : A: The true cost of credit that must be disclosed on a loan agreement Question : Debbie owns a clothing store. She is concerned that a customer who is injured in the store will sue. Which type of insurance should Debbie purchase? A: Social insurance B: Life insurance C: Surety bonds D: Liability insurance - correct answers ✅Correct Answer : D: Liability insurance

Question And Answers 2024

Question :Margaret wants to store a valuable coin collection and important papers. Generally, consumers should: A: Store valuables in a cabinet at home B: Rent a safe deposit box for their valuables C: Hand valuables over to their attorney D: Store valuables in locked drawer - correct answers ✅Correct Answer : B: Rent a safe deposit box for their valuables Reason : Bank customers can rent safe deposit boxes from the bank. They are metal boxes kept in the bank vault where customers often keep valuable papers, financial records, jewelry, and collections. Question : Before a person borrows money from a bank to make a major purchase, which question is considered most important for the person to answer? A: Will I ever have to borrow money again from this bank? B: Will this item every go on sale or will it increase in value? C: Can I just pay for the item on a credit card and pay off the amount due each month?

Question And Answers 2024

D: Do the benefits of making the purchase outweigh the costs of borrowing the money? - correct answers ✅Correct Answer : D: Do the benefits of making the purchase outweigh the costs of borrowing the money? Question : An example of closed-end credit is a A: major credit card. B: debit card. C: mortgage. D: cash card. - correct answers ✅Correct Answer : C: mortgage. Question : A consumer is having a dispute regarding an unfulfilled building contract. It is decided that the case will go to mediation, which means that A: a neutral third party will hear both sides and then try to resolve the conflict. B: the judge and jury will decide who is right in court. C: each party involved must agree ahead of time to accept the outcome of the case.

Question And Answers 2024

D: the dispute will be handled in small claims court. - correct answers ✅A: a neutral third party will hear both sides and then try to resolve the conflict. Question : When securities are traded in the secondary market, who makes or loses money? A: Small businesses B: Creditors C: The SEC D: Investors - correct answers ✅Correct Answer : D: Investors Question : In terms of taxes, when stock dividends are reinvested, the owner of the stock A: does not have to pay income taxes on the dividends. B: still has to pay income taxes on the dividends. C: pays income taxes on the dividends only when the stock is sold. D: does not pay income taxes on the dividends unless there is a capital gain on the stock. - correct answers ✅Correct Answer : B: still has to pay income taxes on the dividends.

Question And Answers 2024

Question : When an investor buys a zero-coupon bond, the investor A: receives the interest in a lump sum when the bond matures. B: agrees to obtaining a bond with a variable interest rate. C: purchases the bond at a discount from the face value of the bond. D: is buying a series of bonds that mature at different times. - correct answers ✅Correct Answer C: purchases the bond at a discount from the face value of the bond. Question : A student's grandmother has decided to buy a long term health care insurance policy. The student's grandmother's decision is most likely related to the fact that this type of coverage A: is not offered by Medicare. B: pays for prescription drugs. C: allows extension of in-hospital acute care days. D: provides life-insurance benefits to heirs. - correct answers ✅Correct Answer A: is not offered by Medicare.

Question And Answers 2024

Question : A 60-year-old makes a withdrawal from his Roth Individual Retirement Account (IRA). The money withdrawn will be A: tax free. B: taxed based on the interest earned. C: taxed at lower rate than regular earnings. D: looked upon as Social Security income. - correct answers ✅Correct Answer A: tax free. Reason : A Roth IRA (Individual Retirement Account) does not have immediate benefits, but the investment grows on a tax-free basis and when withdrawals are made, after the age of 59's years of age, the withdrawals are exempt from federal and state taxes. Question : In which situation is a corporation most likely to call (buy back) a bond? A: Its stock prices has fallen from $52 to $20 a share. B: It issued bonds at a 7.5% interest rate, but its current corporate bonds are now being issued at a 5% rate. C: It is planning to issue more stock.