1. The market price per share of Zinc Corporation is $150 and earnings per share is $20. What is the price/earning ratio of Zinc Corporation? A. 10.25 B. 7.5 C. 2.25 D. 15 2 Loss incurred as a result of flood damage in a rental apartment is A. not covered by insurance. B. covered by landlord's policy. C. covered by tenant's policy. D. the tenant's responsibility. 3. Who of the following may establish a ROTH IRA? A. Lamar, who is enrolled in college and has $9,000 in scholarships. B. Mary, who is retired and is taking distribution from her traditional IRA. C. Nelda, who is still in college and has a part-time job as a sales clerk. D. Shelby, who had $3,000 of interest income last year. 10 bod 4. Your neighbor has monthly expenses totaling $3,725. His employer has indicated that the firm is expecting to announce layoffs soon. How much should your neighbor have in an emergency fund if he wants to cover 6 months of living expenses? A. $3,725. B. $11,175. C. $20,000. D. $22,350. 5. A personal liability umbrella policy is more likely to be opted for by A. people who cannot afford a basic health policy. B. people who cannot afford a basic homeowner's and automobile insurance. C. people with high incomes and high net worth. D. people with low incomes and low net worth. The basic purpose of insurance is to A protect your health B protect yourself from economic losses Csupplement your income D. shield you from bad decisions ZA hond was issued af a par value of $1,000 when the interest rate for similar bonds was percent. Presently, new bonds issued with a similar creditworthiness have a 10 percent interest rate. Which of the following is most likely to be true about the bond? A. It is currently selling for a premium. B. It is currently selling at a discount. C. It is currently selling at par. D. The bond's coupon rate increases. 8. A liability suit could result against you if: A. lightning strikes your home. B. your son falls down the stairs of your home. C. your automobile is stolen. D. your dog bites your neighbor. 9. Which of the following is NOT a wise use of emergency fund money? A. Going to the hospital if you unexpectedly become ill. B. Avoiding foreclosure or eviction. C. Replacing an air conditioning unit for your home. D. Buying gifts. 10. James purchased five bonds of face value of $1,000 that paid 5% annual interest rate. The total annual interest income of James is A. $50 B. $175 C. $250 D.$100 E. $500 11. Rimi currently earns $2,500 per month. She has the following monthly debt payment expenses: $75 for credit cards, $125 for student loans, and a $235 car payment. She is looking to buy a house. The monthly mortgage, including principal, insurance, and taxes, Is $900. Does Rimi pass the FHA total fixed payments-to-income ratio requirements? A. Yes, her ratio is less than 31%. B. No, her ratio is greater than 31%. C. Yes, her ratio is less than 43%. D. No, her ratio is greater than 43%. 12. A taxpayer can increase his/her social security payments by: A collecting social security benefits at age 62 B. postponing the collection of social security benefit to age 70. B. waiting to collect social security benefits at full retirement age. C. Postponing the collection of social security benefits to age 67. 13. Haley just graduated from college. She accepted a position with a firm at an annual salary of $40,000. Using HUD guidelines, what is the maximum Haley should pay for rent on a monthly basis? ASI2.000 B. 54.000, C. S1.333. D. $1,000 14. Auto insurance is needed primarily: A. to finance automobile maintenance. B. as protection against potential liability claims. C. as part of the homeowner's insurance requirements. D. to counter the effects of increasing fuel prices. 15. Mandatory distributions at age 701/2 are required for: A. Regular IRA accounts and pensions. B. Regular IRA accounts only. C. ROTH IRA only. D. Neither Regular IRA nor ROTH IRA. 16. Ownership in a corporation would be represented by_ onc e d A. bonds modelo B. stocks C. real estate D. current accounts on b ottes til bo l i Bonobod bond 17. have no maturity date. A. Common stocks B. Bonds C. Corporate deposits HOS D. Insurance policies 003 002 sation 23. The Smith family owns 200 shares of Elta stock. The company declared a 5 percent stock dividend. After the distribution of stock dividend, the Smiths will own A 200 shares B. 205 shares C. 210 shares D. 410 shares 24. A form or joint ownership that may exist only between husband and wife is: A. joint tenancy. Bjoint tenancy with right of survivorship. C tenancy in common. D. tenancy by the entirety. 25. A bond is quoted as 6.5 percent coupon. The par value of the bond is $1,000, and the market value is $1,200. The bondholder would receive interest per year. A. $78 B. S780 C. $65 D. $650 26. Which of the following is true of Social Security benefits? A. Social Security benefits are retirement benefits extended only to self-employed people. B. A retiree can avail Social Security benefits once he or she attains age 75. C. Social Security benefits are available to military personnel only. D. Workers who elect to retire at age 62 will receive reduced Social Security benefits. 27. A written and legally enforceable document expressing how a person's property should be distributed upon his or her death is known as an) __ A. will B. memorandum C. letter of last instructions D. power of attorney 28. Marcia works for Telephone Industries and participates in its supplemental retirement plan. In years when the firm has no profit, the firm is not required to contribute to the supplementa retirement plan. The plan is a _ A. defined benefit plan. B. non-contributory plan. C. cash balance plan D. profit-sharing plan 1. Cum income from investments include: A dividends on stock B. Interest from bonds or CDs rents from rental property D. all of the above. C 42. Investment goals define the purpose of your investments. The most frequent long-term investment objective is to: A Enhance current income B. Save for a major purchase C. Accumulate funds for retirement D. Seek shelter from taxes 43. A form of ownership which can only be severed by mutual agreement, divorce, or conveyance by both spouses to a third party is known as: A. Joint tenacy B. Tenacy by the entirety C. Tenancy in common D Community Property 44. All of the following statements regarding credit inquiries are true, EXCEPT A. Hard credit inquiries have a negative impact on credit scores. B. Soft credit inquiries generally do not affect credit scores. C. When an individual request his or her own credit report, it is considered a hard inquiry. D. Hard credit inquiries generally have a negative impact on credit scores, but soft credit inquiries generally have no effect 45. ROTH IRA A. distributions are taxable if the account has been opened at least 5 years. B. contributions are never taxable since contributions were made after-tax. C. earnings could be tax free if the account has been opened for at least 1 year. D. are subject to required mandatory distribution at 70 . 46. Donna, who is single and 30 years old, received several speeding tickets recently and was shocked by the effect they had on her auto insurance. Donna drives a 2002 Pontiac Firebir She is trying to reduce the price of her auto insurance. Which of the following actions is most likely to help reduce the price of her auto insurance? A. Maintaining her liability limits at current levels B. Raising her medical payments coverage C. Raising her deductible from $250 to $1,000 D. Maintaining her collision coverage at current levels 35. Which of the following is a reason to invest in mutual funds? A Mutual funds are free of any hidden costs. B. Mutual funds earn tax-free returns, C. Mutual funds provide a guaranteed return in spite of market risks. D. Mutual funds provide diversification of invested funds. 36. If a bond is held to maturity. A. Bondholders will be paid the face amount of the bond. B. Bondholders may receive less than the purchase price depending on market interest C. Bondholders may receive more than the purchase price depending on market interest D. Bondholders will receive face value plus all interest earned over the life of the bond. 37. Which of the following can happen if you co-sign a credit card and the cardholder fails to make the payments? A You can be asked by the credit card company to make the payment B. Your credit score can be negatively affected. C. Your ability to obtain a credit card in your own name can be damaged. D. All of the answer choices are correct. 38. Which of the following events can lead to a significantly lower credit score? A. Filing for bankruptcy. B. Making one or more late payments. C. Frequently moving residences. D. All of the answer choices are correct. 39. Designated beneficiaries listed on IRAs, Pensions, Annuities and Life Insurance: A. should be updated on a periodic basis to reflect major life changes. B. Overrides distribution instructions included in a deceased's will. C. Distributions from these accounts occur outside of probate process. D. All of the above is correct. 40. What is the 2018 Price/Earnings ratio for a company whose market price per share was $23.50 and $25.00 in 2018 and 2017 respectively? Earnings per share at the end of 2018 and 2017 was $3.15 and $2.95 respectively. A. 8.47 B. 7.97 C. 7.46 ovo bomo D. 7.94 1. Carmene income from investments include A dividends on stock B est from brands or CDs C ents from rental property D. All of the above 4. Investment goals define the purpose of your investments. The most frequent long-term investment objective is to: A Enhance current income B. Save for a major purchase C Accumulate funds for retirement D. Seek shelter from taxes 43. A form of ownership which can only be severed by mutual agreement, divorce, or conveyance by both spouses to a third party is known as: A. Joint tenacy B. Tenacy by the entirety C. Tenancy in common D Community Property 44. All of the following statements regarding credit inquiries are true, EXCEPT A. Hard credit inquiries have a negative impact on credit scores. B. Soft credit inquiries generally do not affect credit scores. C. When an individual request his or her own credit report, it is considered a hard inquiry. D. Hard credit inquiries generally have a negative impact on credit scores, but soft credit inquiries generally have no effect 45. ROTH IRA A. distributions are taxable if the account has been opened at least 5 years. B. contributions are never taxable since contributions were made after-tax. C. earnings could be tax free if the account has been opened for at least 1 year. D. are subject to required mandatory distribution at 70 %. 46. Donna, who is single and 30 years old, received several speeding tickets recently and was shocked by the effect they had on her auto insurance. Donna drives a 2002 Pontiac Firebird. She is trying to reduce the price of her auto insurance. Which of the following actions is most likely to help reduce the price of her auto insurance? A. Maintaining her liability limits at current levels B. Raising her medical payments coverage C. Raising her deductible from $250 to $1,000 D. Maintaining her collision coverage at current levels 47. An individ. individual, firm, employer, or governmental agency may request your credit report from a credit reporting agency for the following purposes: A. for employment purposes. B. to determine eligibility to rent or lease housing C. to determine eligibility for new credit. D. All of the above. 48. Basic estate planning documents include: A. last will and testament B. living will/health care proxy C. durable power of attorney D. all of the above poncy that covers excess liability resulting from certain underlying policies is known as A. Homeowner's policy B. Umbrella policy C. Auto Policy D. Rental Policy 50. Transfer of appreciated property A. during a taxpayer's lifetime to a spouse will reduce estate taxes. B. during a taxpayer's lifetime to a non-spouse will decrease capital gains tax for the estate C. to a recipient after death will receive a step-up basis (market value), thereby resulting in lower capital gains tax for recipient. E. Any amount of transfer will be subject to gift tax