NAF FINAL EXAM QUESTIONS AND ANSWERS
account summary - CORRECT ANSWER✅✅The section of a bank statement that provides a quick
overview of account activity.
acquisition - CORRECT ANSWER✅✅the act of one corporation acquiring another by purchasing its
shares or by purchasing its assets.
deficit - CORRECT ANSWER✅✅A financial shortage that occurs when liabilities exceed assets or when
more cash is spent than is received.
tax preparer - CORRECT ANSWER✅✅A person who prepares tax returns for individuals, families, and
businesses.
Taxonomy - CORRECT ANSWER✅✅A categorized list of words related to a particular topic.
thrifts - CORRECT ANSWER✅✅Depository institutions that include savings and loans as well as savings
banks. They specialize in saving accounts and real estate financing.
variable rate - CORRECT ANSWER✅✅An interest rate that goes up or down depending on the market
rate.
Treasury bill (T-bill) - CORRECT ANSWER✅✅Short-term US government security with a maturity date of
one year or less. No interest is paid, but the debt is sold at less than the value and then repaid for full
value at maturity.
Treasury bond - CORRECT ANSWER✅✅A debt security of the US Treasury that is issued with a maturity
length of 10 years or more. Treasury bonds are normally sold in $1,000 denominations.
unlimited liability - CORRECT ANSWER✅✅The liability of the owner of a business for all of the
business's financial obligations whereby an owner's personal assets can be taken.
,account summary - CORRECT ANSWER✅✅The section of a bank statement that provides a quick
overview of account activity.
acquisition - CORRECT ANSWER✅✅The act of one corporation acquiring another by puchasing its
shares or by purchasing its assets.
annual fee - CORRECT ANSWER✅✅The once-a-year fee that some credit cards charge.
annual percentage rate (APR) - CORRECT ANSWER✅✅The yearly interest charge applied to outstanding
credit card balances. It is one part of the cost of credit. It refers to the way the interest is compounded
rather than to the stated interest rate.
annuity - CORRECT ANSWER✅✅A type of investment where money is exchanged for a series of equal
payments over time. Payments can include interest on the original sum plus income from investments.
Annuities are sold by life insurance companies and are often purchased to provide retirement income
and shift the responsibility for investing to an investment company.
asset - CORRECT ANSWER✅✅Any object of value, including cash, investments, property, and personal
possessions.
ATM (automated teller machine) - CORRECT ANSWER✅✅An unattended computerized machine that
dispenses money when a personal coded card is used.
bailout - CORRECT ANSWER✅✅A loan or offer of money to a business in order to save it from
bankruptcy; a financial rescue.
Bank Teller - CORRECT ANSWER✅✅An employee of a bank who deals directly with customers. Bank
tellers are responsible for basic depository and lending transactions. A bank teller's duties also include,
but are not limited to, balancing cash drawers and ATMs, issuing cashier's checks, traveler's checks, and
money orders, promoting the financial institution's products, and resolving customer issues.
Blue Chip Stock - CORRECT ANSWER✅✅The stock of a financially sound company with a history of
strong earnings and reliable dividends.
, Bookkeeper - CORRECT ANSWER✅✅A person responsible for keeping track of financial records or
documents.
Business Risk - CORRECT ANSWER✅✅The level of uncertainty of expected returns due to a business's
poor performance, adverse economic conditions, or other external factors.
Budget - CORRECT ANSWER✅✅A detailed plan to manage the spending and saving of money.
Business Environment - CORRECT ANSWER✅✅Includes anything that surrounds the business. It consists
of all the factors that affect a business's operations.
Boutique Investment Firm - CORRECT ANSWER✅✅A small investment firm that specializes in a limited
number of services.
Bond - CORRECT ANSWER✅✅A loan an investor makes to a government or corporation for a specified
amount of time for the purpose of raising capital for the government or corporation. In return the
investor receives the principal plus interest.
Barter - CORRECT ANSWER✅✅A type of trade in which goods and/or services are exchanged for other
goods and/or services. No money is involved in the trade.
Bank Statement - CORRECT ANSWER✅✅An account summary of all financial transactions occurring
over a given period of time on an account offered by a financial institution.
variable expense - CORRECT ANSWER✅✅An expense that changes from period to period, such as food
or gasoline costs.
Bank - CORRECT ANSWER✅✅A depository institution where one can keep and borrow money and take
care of financial affairs.
account summary - CORRECT ANSWER✅✅The section of a bank statement that provides a quick
overview of account activity.
acquisition - CORRECT ANSWER✅✅the act of one corporation acquiring another by purchasing its
shares or by purchasing its assets.
deficit - CORRECT ANSWER✅✅A financial shortage that occurs when liabilities exceed assets or when
more cash is spent than is received.
tax preparer - CORRECT ANSWER✅✅A person who prepares tax returns for individuals, families, and
businesses.
Taxonomy - CORRECT ANSWER✅✅A categorized list of words related to a particular topic.
thrifts - CORRECT ANSWER✅✅Depository institutions that include savings and loans as well as savings
banks. They specialize in saving accounts and real estate financing.
variable rate - CORRECT ANSWER✅✅An interest rate that goes up or down depending on the market
rate.
Treasury bill (T-bill) - CORRECT ANSWER✅✅Short-term US government security with a maturity date of
one year or less. No interest is paid, but the debt is sold at less than the value and then repaid for full
value at maturity.
Treasury bond - CORRECT ANSWER✅✅A debt security of the US Treasury that is issued with a maturity
length of 10 years or more. Treasury bonds are normally sold in $1,000 denominations.
unlimited liability - CORRECT ANSWER✅✅The liability of the owner of a business for all of the
business's financial obligations whereby an owner's personal assets can be taken.
,account summary - CORRECT ANSWER✅✅The section of a bank statement that provides a quick
overview of account activity.
acquisition - CORRECT ANSWER✅✅The act of one corporation acquiring another by puchasing its
shares or by purchasing its assets.
annual fee - CORRECT ANSWER✅✅The once-a-year fee that some credit cards charge.
annual percentage rate (APR) - CORRECT ANSWER✅✅The yearly interest charge applied to outstanding
credit card balances. It is one part of the cost of credit. It refers to the way the interest is compounded
rather than to the stated interest rate.
annuity - CORRECT ANSWER✅✅A type of investment where money is exchanged for a series of equal
payments over time. Payments can include interest on the original sum plus income from investments.
Annuities are sold by life insurance companies and are often purchased to provide retirement income
and shift the responsibility for investing to an investment company.
asset - CORRECT ANSWER✅✅Any object of value, including cash, investments, property, and personal
possessions.
ATM (automated teller machine) - CORRECT ANSWER✅✅An unattended computerized machine that
dispenses money when a personal coded card is used.
bailout - CORRECT ANSWER✅✅A loan or offer of money to a business in order to save it from
bankruptcy; a financial rescue.
Bank Teller - CORRECT ANSWER✅✅An employee of a bank who deals directly with customers. Bank
tellers are responsible for basic depository and lending transactions. A bank teller's duties also include,
but are not limited to, balancing cash drawers and ATMs, issuing cashier's checks, traveler's checks, and
money orders, promoting the financial institution's products, and resolving customer issues.
Blue Chip Stock - CORRECT ANSWER✅✅The stock of a financially sound company with a history of
strong earnings and reliable dividends.
, Bookkeeper - CORRECT ANSWER✅✅A person responsible for keeping track of financial records or
documents.
Business Risk - CORRECT ANSWER✅✅The level of uncertainty of expected returns due to a business's
poor performance, adverse economic conditions, or other external factors.
Budget - CORRECT ANSWER✅✅A detailed plan to manage the spending and saving of money.
Business Environment - CORRECT ANSWER✅✅Includes anything that surrounds the business. It consists
of all the factors that affect a business's operations.
Boutique Investment Firm - CORRECT ANSWER✅✅A small investment firm that specializes in a limited
number of services.
Bond - CORRECT ANSWER✅✅A loan an investor makes to a government or corporation for a specified
amount of time for the purpose of raising capital for the government or corporation. In return the
investor receives the principal plus interest.
Barter - CORRECT ANSWER✅✅A type of trade in which goods and/or services are exchanged for other
goods and/or services. No money is involved in the trade.
Bank Statement - CORRECT ANSWER✅✅An account summary of all financial transactions occurring
over a given period of time on an account offered by a financial institution.
variable expense - CORRECT ANSWER✅✅An expense that changes from period to period, such as food
or gasoline costs.
Bank - CORRECT ANSWER✅✅A depository institution where one can keep and borrow money and take
care of financial affairs.
