Exam (elaborations)
WISE (Finance Economics) MULTIPLE CHOICE PRACTICE QUESTIONS AND ANSWERS
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WISE (Finance Economics) MULTIPLE CHOICE PRACTICE QUESTIONS AND ANSWERS
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WISE (Finance Economics) MULTIPLECHOICE PRACTICE QUESTIONS AND
ANSWERS .
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.
Verified Answer -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.
Verified Answer -Correct Answer A: is not offered by Medicare.
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 The money withdrawn will be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.
Verified Answer -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.
D: It wants to diversify its public offerings.
Verified Answer -Correct Answer B: It issued bonds at a 7.5% interest
rate, but its current corporate bonds are now being issued at a 5% rate.
Question : A cash card generally:
A: Can be used in the same way that someone uses a check to pay bills
by mail
, B: Is purchased with a specific amount of money that can be used to pay
for goods or services
C: Is the same as a credit card which means you can use it to pay the
minimum on a bill
D: Is the same as a debit card and is always linked to a specific checking
account
Verified Answer -B: Is purchased with a specific amount of money that
can be used to pay for goods or services.
Question : Which of the following statements is usually true about
individuals who are financially literate?
A: They have high debt and low savings
B: They understand the basics of personal finance and money
management
C: They almost always choose stocks and bonds that increase in value
D: They achieve all of their financial goals
Verified Answer -B. They understand the basics of personal finance and
money management
Question :
Nora needed to make a long-distance call from a pay phone and did not
have the cash. She was able to make the call by using her:
A: Credit card
B: Identification card
C: Cash card
, D: Traveler's check
Verified Answer -Correct Answer : C: Cash card
Question : Which statement is FALSE about most ATM (Automated
Teller Machine) cards?
A: You must have an account with a financial institution to have an ATM
card.
B: You can always get cash anywhere in the world with no fee.
C: You can generally obtain information concerning your account
balance(s) at an ATM machine.
D: You can generally get cash 24 hours a day, seven days a week.
Verified Answer -Correct Answer : B: You can always get cash anywhere
in the world with no fee.
Question : Jami lost her debit card. She did not report it missing for 3
months. If an unauthorized person used her debit card, her maximum
liability is:
A: $50
B: $500
C: Unlimited liability
D: No liability because she notified the financial institution
Verified Answer -C. Unlimited
Question : Which of the following is a disadvantage of using phone cards,
debit cards, electronic transfers, and ATM cards?
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