EX 3 1.The law that prohibits denying credit due to gender, age, race, natural origin, religion, or marital status is __________ . A. Equal Credit Opportunity Act B. Fair Treatment of Borrowers Act C. Fair Labor Standards Act D. Fair Isaac Act 4 Which of the following will not help you establish a good credit history? A. paying your phone bill on time B. financing a car and making payments on time C. making as many purchases as possible with cash D. never exceeding your credit limit on your credit card 6. The item that receives the most weight in the FICO credit scoring system is __________ . A. credit payment history B. credit utilization C. credit inquiries D. the amount of credit used each month 7. Identity thieves who obtain your information from the magnetic strip on your credit card are using a technique known as __________ . A. shoulder surfing B. dumpster diving C. pretexting D. skimming 8.Some credit card companies will waive the annual fee on a credit card if __________ . A. you pay your bills in a timely manner B. you carry a large balance from month to month C. you use the card infrequently D. Credit card companies never waive annual fees 10. Credit card companies' fees cannot exceed __________of the initial credit limit. A. more than 5% B. more than 25% C. more than 50% D. more than 10% 12. Risk management of money market investments involves all of the following except __________ . A. interest rate risk B. potential for default when backed by the federal government C. liquidity risk D. credit risk 13. The interest rate is composed of the __________ and the __________. A. risk-free rate; risk discount B. risk-free rate; risk premium C. risk-free rate; default risk premium D. none of the above 14. Credit extended to consumers for short periods of time to make specific purchases is __________ . A. installment credit B. non-installment credit C. revolving open-end credit D. minimum limit credit 15. Compute the new balance on a credit card assuming that beginning balance = $450.00 purchases during the month = $300.00 payments made within the grace period = $250.00 interest rate = 18% A. $516.00 B. $550.00 C. $503.00 D. $1,000.00 17. Which of the following items will give you the greatest liquidity? A. NOW account B. savings account C. checking account D. one year CD 19.If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone call, they are __________ . A. shoulder surfing B. dumpster diving C. pretexting D. skimming ex 8 1.June and Ward Cleaver are married. June works as an accountant and contributes to a 401(k. plan at work. Ward is a web page designer and works for himself from their home. What type of retirement plan would be an option for Ward? A. SEP-IRA plan B. Keogh plan C. individual IRA D. all of the above Social Security is all but __________ . A. a good starting point to plan for your retirement funding B. financed through working individuals and employers C. a government benefit paid to the elderly and disabled D. a specific savings plan to which individuals contribute and from which they benefit Social Security is a system where current workers pay taxes that are used to pay current retirees' benefits. How is Social Security funded? A. income taxes by all Americans B. payroll taxes on employers up to a salary cap C. payroll taxes on employees up to a salary cap D. B and C Which of the following is not a duty of the executor of an estate? A. collect money owed the estate B. decide how the assets will be distributed C. pay debts of the estate D. sell specific assets of the estate if necessary You get a job with the Allred Corporation. Their retirement plan will pay you $250.00 a month for each year you work for the company commencing on your 65th birthday. You must work for the company for 10 years in order to qualify for the pension. This plan is a __________ . A. defined-benefit plan B. defined-contribution plan C. traditional IRA D. Keogh plan Payments to Social Security are based on salary and made monthly by __________ . A. employees only B. employers only C. both employees and employers D. everyone except self-employed people Your company pays retirement benefits to current retirees out of current earnings, on a pay-as-you-go basis. This is an example of a(n. __________. A. unfunded pension plan B. cash balance plan C. funded pension plan D. none of the above The __________ allows for the distribution of money and property in a will. A. attestation and witness clause B. payment of debt and taxes clause C. common disaster clause D. disposition of property clause Why might you use a trust? A. Trusts can be used to shelter assets from estate taxes. B. Trusts can ensure that children from a previous marriage will receive some inheritance. C. A trust does not become a matter of public record, so it offers confidentiality. D. All of the above are advantages to using a trust. Carey is a widow with two teenagers, Brenda age 13 and Terry age 15. Her health has declined and she knows that a will should be drafted. Which of the following statements is not an important reason to have a will? A. Without a will the court will appoint an administrator for the estate. B. Without a will the court will choose Brenda's and Terry's guardian(s.. C. The children's best interests may not be served without a will. D. All of the above are reasons Carey should have a will. Which of the following investments is least likely to be allowed with most defined-contribution plans? A. stock mutual funds B. bond mutual funds C. money market funds D. individual corporate bonds If you are self-employed or work for a small business, which of the following retirement plans would you be most likely to have? A. 403(b. B. 401(k. C. Keogh plan D. thrift and savings plan If you are far away from retirement, you should consider investing in __________ for your retirement account. A. Ginnie Mae or Treasury bond funds B. certificates of deposit (CDs. C. mutual funds with high growth stocks D. corporate bonds When an employer makes pension fund contributions directly to a trustee who holds and invests those funds, the plan is said to be a(n. __________ . A. cash balance plan B. defined-contribution plan C. funded pension plan D. unfunded pension plan Which of the following is a typical cash need of the estate? A. estate and inheritance taxes B. funeral expenses C. outstanding debt D. all of the above The person specified in a will to receive a part of the estate is called a __________ . A. beneficiary B. grantor C. trustee D. administrator Which of the following retirement plans is designed for small businesses? A. SEP-IRA plans B. SIMPLE plans C. ESOP D. A and B A __________ will is suitable for larger estates because it distributes half of the estate to the spouse and the other half to any children or to a trust. A. simple B. complex C. traditional marital share D. modern marital share You have determined that you will need to accumulate $1,000,000.00 in your retirement account in order to cover your inflation-adjusted shortfall. Which of the following is closest to the amount of money you would need to put into a tax-deferred retirement account every year if you plan on retiring in 40 years? Assume an 8% average return on this account and that it is empty today. A. $1,458.00 B. $3,860.00 C. $5,957.00 D. $8,444.00 20. When planning the retirement payout, there are several options from which to choose. With the __________ option, the annuity provides payments over the life of both you and your spouse. A. lump sum annuity B. single life annuity C. annuity for life D. combination annuity