question

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

answer

Progressive

question

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?

answer

The Federal Reserve raised the federal funds rate

question

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?

answer

Futures

question

Making a down payment on a loan will

answer

decrease the amount of interest paid

question

Which of these investments may pay dividends?

answer

Stocks

question

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

answer

Building the home in the floodplain of a river

question

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

answer

her limited income

question

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

answer

Secured credit cards

question

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

answer

$45,000

question

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

answer

earn more over a lifetime

question

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

answer

The credit card company applies a penalty rate, increasing the card's interest rate.

question

Which tax uses the same rate for all income levels?

answer

Proportional

question

How is sales tax similar to a flat tax?

answer

They are both the same rate for everyone

question

Which of the following investment plans best reflects diversification?

answer

Kenya invests in stocks, bonds, and mutual funds.

question

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?

answer

$2,000

question

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

answer

To encourage customers to buy more than one item

question

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?

answer

A compound interest account

question

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

answer

$2,700

question

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?

answer

Reevaluate her fixed and variable expenses

question

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?

answer

No, the cost of the annual premium for 10 years was less than the accident claims

question

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

answer

$20,000

question

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

answer

young investor

question

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

answer

help her if she wants to get a loan for a new car

question

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

answer

Calculate her net income

question

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?

answer

CD