WISE PRACTICE TEST- EXAM WITH 100- CORRECT ANSWERS

WISE PRACTICE TEST- EXAM WITH
100% CORRECT ANSWERS




Question : To qualify for a Federal Housing Administration (FHA) loan, a person must
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generally
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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-C: fulfill income
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guidelines.
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A high school student has begun to investigate the field of finance as a career choice.
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In deciding 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-A: Will I find a balance between financial rewards and
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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
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of earning potential, types of positions available and the training necessary to acquire
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these positions but what are the chances that the individual will enjoy working in this
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field. - correct answer-D: An ATM transaction
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, A company offers a defined-contribution pension plan which means that upon
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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-B: the total amount of money contributed plus investment
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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-A: exempt from state and
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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-B: a secure, low, risk
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investment.
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Reason : These bills are backed by the full faith and credit of the US government,
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therefore considered relatively risk free.
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Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at
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$50 a 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
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money needed from a brokerage firm in order to buy a wanted stock and pays a fee for
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the privilege.
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To determine the time value of depositing $100 in a savings account, a person needs to
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know 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
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inflation.
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