Week 7 Flashcards
The more frequently a bank compounds interest, ___________ for a given nominal rate
will be.
a. the higher the effective rate
b. Lower the yield rate
c. higher the normal rate
a. the higher the effective rate
Which account is called a demand deposit account.
a. Savings
b. Time deposit
c. Checking
c. Checking
Using your bank credit card, when will interest begin to accrue immediately?
a. Get cash advances
b. make purchases
c. making payments
a. Get cash advances
A person can avoid interest charges when using a bank credit card if:
a. The minimum is paid every month
b. The balance is paid in full each month
c. The account is below the credit limit
b. The balance is paid in full each month
To start early & save for retirement, one of the largest financial benefits is related
to:
a. Inflation
b. reduced expenses
c. compound interest
d. decrease expenses
c. compound interest
An investment that earns interest on interest earned:
a. Discounted rate of return
b. Consolidated rate of return
c. Compound rate of return
c. Compound rate of return
Homeowner’s insurance policy (Section 1) should covers:
a. the dwelling, accompanying structure, and personal property of the insured.
b. the cost of defending the insured.
c. the reasonable expenses incurred by an insured in helping the insurance company’s defense.
d. hospitalization costs provided to the insured.
a. the dwelling, accompanying structure, and personal property of the insured.
You want to borrow $1,000 at an interest rate of 10%. The most expensive method of calculating the dollar cost of the interest on the installment loan will be the:
a. Past due method.
b. double declining balance
method.
c. discount method.
d. simple interest method.
e. Add-on method .
e. Add-on method .
A market order is transacted at the:
a. lowest price of the day
b. best price when the order is
entered.
c. limit price.
d. price quoted by the broker.
b. best price when the order is
entered.
A dividend yield for a stock(s) are calculated as:
a. the annual dividend received per share divided by the market price per share of stock
b. the annual dividend received per share divided by the book value per share of stock
c. the earnings remaining after paying preferred dividends divided by the number of common shares outstanding
a. the annual dividend received per share divided by the market price per share of stock
A fund that invests only in a particular industry:
a. Sector
b.Balanced
c.Bond
d.Money market
a. Sector
Melissa’s retirement plan is described in her employee handbook as follows:
Noncontributory
Cliff vesting (100 percent) after 3 years of full-time employment
Monthly retirement benefits based on average salary over the last 3 years of employment and the total number of years worked for the company.
Which of the following statements about this retirement plan is true?
a. Melissa will have to contribute to the plan.
b. Melissa will have to make investment decisions regarding her retirement plan.
c. Melissa’s retirement plan is a defined contribution plan.
d. For Melissa, vesting takes place gradually over the first six years of employment.
e. If Melissa leaves this company before working full-time for three years, she will not receive any benefits
e. If Melissa leaves this company before working full-time for three years, she will not receive any benefits
The most expensive method for determining finance charges on revolving credit: ADB
a. annual percentage rate (APR) method including new purchases
b.average daily balance (ADB) method including new purchases
c. annual percentage rate (APR) method excluding new purchases
b.average daily balance (ADB) method including new purchases
