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Question : To qualify for a Federal Housing Administration (FHA) loan, a person must gen
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erally
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A: have at least a high school diploma.
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B: have one-quarter of the cost of the home
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for a down-payment.
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C: fulfill income guidelines.
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D: provide two individuals to co-sign the loan. - correct answer-
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C: fulfill income guidelines.
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A high school student has begun to investigate the field of finance as a career choice. In d
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eciding about the field, the student should focus on which question first?
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A: Will I find a balance between financial rewards and personal satisfaction from work?
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B: How many people do I know who work in this field?
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C: Once I train for this area, how long before I will be
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at the top of the field?
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D: Are there people in this field who are dissatisfied
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with their jobs? - correct answer-
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A: Will I find a balance between financial rewards and personal satisfaction from work?
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A: Will I find a balance between financial rewards and personal satisfaction from work?
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Reason : It is important to investigate a career with the idea of not only getting a sense of e
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arning potential, types of positions available and the training necessary to acquire these p
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ositions but what are the chances that the individual will enjoy working in this field. -
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correct answer-D: An ATM transaction
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A company offers a defined-
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contribution pension plan which means that upon retirement the employee will receive
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A: one-half of the employee's last year's salary.
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B: the total amount of money contributed plus investment
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earnings.
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C: an amount of money based only on the length of time
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the employee worked for the company.
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D: a specified amount of money based totally on the profit
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earned by the company while the employee worked
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there. - correct answer-
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B: the total amount of money contributed plus investment earnings.
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, The interest earned on United States Series EE Savings Bonds is
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A: exempt from state and local taxes.
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B: paid in a lump sum at the time the face value on the bond is reached.
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C: equal to the money paid to purchase it. - correct answer-
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A: exempt from state and local taxes.
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Reason : The interest rate on US savings bonds is exempt from state and local taxes.
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Buying a treasury bill (T-bill) is best for investors who are looking for
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A: a place to invest between $100-$500.
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B: a secure, low risk investment.
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C: a higher yield on their investment than corporate bonds offer.
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D: an investment that matures in 10-30 years. - correct answer-
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B: a secure, low, risk investment.
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Reason : These bills are backed by the full faith and credit of the US government, therefor
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e considered relatively risk free.
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Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a
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share on 50% margin. This means that the
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A: investor will pay only $5000 for the shares.
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B: investor is buying 2000 shares.
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C: brokerage firm is lending the investor 50% of the money.
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D: brokerage firm will own 50% of the 1000 shares of stock that were purchased. -
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correct answer-C: brokerage firm is lending the investor 50% of the money.
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Reason : Margin is a speculative method whereby an investor borrows up to 50% of the m
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oney needed from a brokerage firm in order to buy a wanted stock and pays a fee for the pr
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ivilege.

To determine the time value of depositing $100 in a savings account, a person needs to k
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now the interest rate and
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A: her total income.
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B: the rate of inflation.
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C: whether the account is FDIC protected.
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D: whether the bank offers overdraft protection. - correct answer-B: the rate of inflation.
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The amount a lender charges to borrow money is called the:
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A: Principal
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B: Annual Percentage Rate (APR)
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C: Loan balance
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D: Finance charge - correct answer-Correct Answer : D: Finance charge
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The cost to use someone else's money for a period of time is called the:
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A: Interest rate expressed as a percentage
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B: Opportunity cost
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C: Minimum payment
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D: Inflation rate - correct answer-A: Interest rate expressed as a percentage
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