Unit 2 Test

4 October 2022
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question
Each of the following is an example of a flexible expense EXCEPT: A. food B. clothing C. insurance D. entertainment Please select the best answer from the choices provided: A B C D
answer
C. Insurance
question
When there is a high degree of risk to an investment opportunity there is a greater chance for the investor to __________. A. lose the investment B. make a small profit C. receive a guarantee D. liquidate the investment Please select the best answer from the choices provided: A B C D
answer
A. Lose the investment
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Which is an example of a short-term investment? savings bond savings account retirement fund checking account
answer
Savings account
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Why were savings and loans (S&Ls) originally established? to help people invest in small businesses to help people save money to help people buy homes to help people invest in the stock market
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To help people buy homes
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Each of the following is a tip for saving EXCEPT: A. shop smart B. use credit cards C. pay yourself first D. focus on reaching a goal Please select the best answer from the choices provided: A B C D
answer
B. Use credit cards
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When the economy grows, the market grows, most likely because: more investors are willing to take risks. the government has decreased spending. the government has increased taxation. investors have a greater desire for profits.
answer
More investors are willing to take risks.
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A high-risk investment is characterized by: a greater percentage chance of loss. superior prospects for short-term gains. a smaller percentage chance of loss. lower interest and compound interest rates.
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A greater percentage chance of loss.
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Aliyah made a payment in the amount of $47.93. She'll use the check register to record her transaction. What will be her new balance?
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$1295.02
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In which column on a check register should the total current amount in the account be entered? Deposit Transaction Balance Debit
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Balance
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Which is the best question for Joe to ask himself when deciding whether to open a checking or savings account? Is there an ATM near my home or work? Does the bank offer free checking? If I need a loan, will they give it to me? Why am I opening a bank account?
answer
Why am I opening a bank account?
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Marcus deposited his paycheck in the amount of $625.84. He'll use the check register to record his transaction. What will be his new balance?
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$1266.15
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Most investors approach risky investments by: investing the same way that they do with safer investments. investing more money in the stock of unknown companies. investing less money in low- and medium-risk investments. investing less money in high-risk investments.
answer
Investing less money in high-risk investments.
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Fiona wrote a check to the veterinarian for $89.56. She'll use the check register to record her transaction. What will be her new balance? $2,458.94 $2,484.83 $2,549.55 $2,575.44
answer
$2,458.94
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Interest on an investment is considered: financing. a fee. a penalty. profit
answer
Profit
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Which two factors have the greatest influence on risk for an investment? the demand for the investment the duration of the investment the history of the investment the importance of the investment the need for the investment
answer
The duration of the investment. The history of the investment.
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In which category do commodities belong? long-term investment only short-term investment only either short- or long-term investment neither short- nor long-term investment
answer
Either short- or long-term investment
question
Look at the table below showing an example of a checkbook ledger. Adrienne has several receipts from recent transactions that she entered in her records. The receipts include an ATM receipt for a $60.00 withdrawal (plus a $2.00 transaction fee), a grocery store receipt for $32.50, and a $1,200 paycheck deposit slip. When she finishes entering her transactions, Adrienne realizes that her balance is incorrect. Assuming that Adrienne's beginning account balance was $320.00, why is her balance incorrect? Adrienne forgot to include the $2.00 ATM transaction fee. Adrienne did not use $320.00 as her starting balance. Adrienne deducted $23.50 from her balance instead of $32.50. Adrienne did not enter her ATM withdrawal correctly.
answer
Adrienne did not enter her ATM withdrawal correctly.
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Credit unions differ from retail banks because they are: owned by their members. owned by their employees. owned and managed by private corporations. owned by shareholders who purchased stock.
answer
Owned by their members.
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Why is compound interest preferable to simple interest? Compound interest pays at least double the interest on the principal during each month. Compound interest is paid by the week or by the month, not only once during a year. Compound interest is based on the entire principal, not just a percentage of the principal. Compound interest pays interest on the principal and the interest earned in each period.
answer
Compound interest pays interest on the principal and the interest earned in each period.