02.10 Module Two Exam – Flashcards

“Tax bracket” is a term associated with which type of taxation?

The rate of return being offered by banks on money market accounts is 3% and increasing. Which of the following might cause this to happen?

If an investor possesses a portfolio heavily concentrated in Certificates of Deposit, a financial advisor would most likely suggest which of the following aggressive investments to diversify the portfolio?

Making a down payment on a loan will

Which of these investments may pay dividends?

Which of the following actions would likely raise homeowner’s insurance premiums?

Rachel finds a new apartment that she loves in the center of downtown, but she ultimately decides against renting it because the $1,500 per month price tag greatly exceeds her budget. Rachel’s decision to forgo the new apartment is mainly based on

Which type of credit involves a set limit based on what a consumer pays up front?

You earn $50,000 per year, and the federal tax rate is 10 percent. Your net income is

Compared to attending a technical school, completing a four-year college degree allows you to

What is likely to happen if a borrower misses a payment on a credit card account?

Which tax uses the same rate for all income levels?

How is sales tax similar to a flat tax?

Which of the following investment plans best reflects diversification?

Johann maintains a $75,000 insurance policy on his boat. He pays $50 per month in premiums and his deductible is $2,500. If he is involved in an accident that does $2,000 worth of damage to the boat, how much will he have to pay?

Why might stores choose to list $5 items for “two for $10”?

Principal: $12,000 in Simple Interest Account Interest Year 1: ($12,000 x 5%) + $600 = $12,600 Interest Year 10: ($12,000 x 5%) + $6000 = $18,000 Interest Year 20: ($12,000 x 5%) + $12000 = $24,000 Total Savings After 20 Years: $12,000 + 20 years of simple interest = $24,000 Principal: $12,000 in Compound Interest Account Interest Year 1: ($12,000 x 5%) + $600 = $12,600 Interest Year 10: ($12,000 + $6,615.94) + ($18,615.94 x 5%) = $19546.74 Interest Year 20: ($12,000 + $18,323.40) + ($30,323.40 x 5%) = $31,839.57 Total Savings After 20 Years: $12,000 + $20 years of compound interest = $31,839.57 Patrick has $12,000 saved for medical school from gifts and summer jobs. Because the cost of college has risen each year, Patrick knows he needs a savings account that will help him meet these increases. In the 10 remaining years before he receives his medical degree, which of the following would most help Patrick to meet these increases?

Austin earns $18,000 per year. His earnings put him in the 15% tax rate. What is his tax owed?

Kendra wants to become a computer technician, but she has a great deal of debt. She makes a yearly budget and finds that her projected income and expenses do not balance. What should she do to immediately correct this imbalance?

Jill paid an annual premium of $2,000 in total coverage for her homeowner’s insurance, including $250,000 in damage coverage and $250,000 in liability coverage. Ten years into her policy, a friend fell off a ladder while working on the roof of her house and claimed $75,000 in medical expenses. Eleanor’s insurance company paid the claim. Did the cost of the annual premiums outweigh the benefit of transferring the risk to the insurance company?

Your friend’s job pays $10 per hour, and he works 40 hours per week. His tax rate is 20 percent. Assuming he works 50 weeks of the year, his yearly gross income is

Assume that the blue section (D) of the chart stands for stocks and the red (A) for mutual funds. This would most likely represent the portfolio of a

Since Rhonda always pays her bills on time, she has a high credit score. This history of responsible payments will

Etta wants to make a monthly budget. What should she do first?

Rudy is a 52-year-old freelance writer who wants a short-term, low-risk investment with low liquidity. Which of these investment vehicles should he consider?

The rate of return being offered by banks on money market accounts is 3% and increasing. Which of the following might cause this to happen?