FIN 3030 Exam Questions with Correct Answers Latest Update 2025-2026 Graded A+
You are considering the purchase of one of two different investments. Investment A is tax exempt and
pays 6%. Investment B is taxable and pays 8.33%. You live in a state that imposes no income taxes and
are in a 28% federal tax bracket and want to earn the highest after tax return possible. Which of the
following is true? (round to two decimal places)
a. Investment A is preferred.
b. Investment B is preferred.
c. Investments A and B have identical after tax yields.
d. Investments A and B have identical APYs.
e. Not enough information has been provided. - Answers C
When using an ATM, keep in mind that
a. computer errors can occur. Incorrect
b. it is never safe to deposit cash in an ATM.
c. you should report electronic transaction mistakes to the bank immediately.
d. human problems in handling the transactions can occur.
e. All of these are correct. - Answers E
You are examining two different MMMFs. Fund A is tax-exempt and pays 7%. Fund B is taxable and pays
9.5%. You live in a state that imposes no income taxes and you are in the 25% federal tax bracket. Which
of these two alternatives is better?
Select one:
a. Find A is the better choice.
b. Fund B is the better choice.
c. Fund A and Fund B are equal so they both are a wise choice.
,d. Neither Fund A nor Fund B are wise choices. - Answers B
It is wise to wait until you are earning a substantial amount of money before you establish a disciplined
financial plan for your future.
Select one:
True
False - Answers False
When you use your debit card or ATM card, you should enter the transaction into your check register.
Select one:
True
False - Answers True
How do you compare cash management alternatives to determine which is best for you?
Select one:
a. Compare returns using comparable interest rates.
b. Take into account their tax status.
c. Consider their safety or risk.
d. All of these are correct. - Answers D
Money Market Deposit Accounts enjoy one advantage over savings accounts found in commercial
banks. This advantage is
Select one:
a. a variable rate that is generally higher.
b. lower fees and smaller minimum balances.
c. greater liquidity.
,d. unlimited check-writing privileges. - Answers A
Which of the following is not a common fee arrangement for checking accounts?
Select one:
a. Monthly fee
b. Minimum balance requirement
c. Variable interest rates to reflect fee activity
d. Charge per check
e. Balance-dependent scaled fees - Answers C
Which of the following financial institutions were originally established to provide mortgage loans to
depositors?
Select one:
a. Commercial banks
b. Savings and loan associations
c. Internet banks
d. Credit unions - Answers B
John and Maile Johnson
The Johnson family is very conservative financially. They have a retirement plan where John works and
share a joint checking account at their bank. They keep a lot of money in their checking account to cover
short-term needs and emergencies. Both of them want to step up to a higher interest rate than a
checking or savings account pays, and at the same time stay with their bank.
, The Johnsons have been thinking about the financial principle -Pay Yourself First. Being very
conservative, they might consider having their bank
Select one:
a. sell them a risky mutual fund.
b. send them a monthly reminder to make a deposit in their 401(k).
c. do a direct deposit of John's paycheck into their checking account.
d. do a direct deposit of some of John's paycheck into a savings fund. - Answers D
Liquid assets allow you to cover unplanned expenses without having to interrupt your long-term
investments or liquidate any tangible assets.
Select one:
True
False - Answers True
Please choose the method to use when calculating the after-tax return.
Select one:
a. Taxable return (1 + marginal tax rate) -nontaxable return
b. Taxable return (marginal tax rate -1) -nontaxable return
c. Nontaxable return (1 -marginal tax rate) + taxable return
d. Taxable return (1 -marginal tax rate) + nontaxable return
e. Nontaxable return (1 + marginal tax rate) -taxable return - Answers D
John and Maile Johnson
The Johnson family is very conservative financially. They have a retirement plan where John works and
share a joint checking account at their bank. They keep a lot of money in their checking account to cover
You are considering the purchase of one of two different investments. Investment A is tax exempt and
pays 6%. Investment B is taxable and pays 8.33%. You live in a state that imposes no income taxes and
are in a 28% federal tax bracket and want to earn the highest after tax return possible. Which of the
following is true? (round to two decimal places)
a. Investment A is preferred.
b. Investment B is preferred.
c. Investments A and B have identical after tax yields.
d. Investments A and B have identical APYs.
e. Not enough information has been provided. - Answers C
When using an ATM, keep in mind that
a. computer errors can occur. Incorrect
b. it is never safe to deposit cash in an ATM.
c. you should report electronic transaction mistakes to the bank immediately.
d. human problems in handling the transactions can occur.
e. All of these are correct. - Answers E
You are examining two different MMMFs. Fund A is tax-exempt and pays 7%. Fund B is taxable and pays
9.5%. You live in a state that imposes no income taxes and you are in the 25% federal tax bracket. Which
of these two alternatives is better?
Select one:
a. Find A is the better choice.
b. Fund B is the better choice.
c. Fund A and Fund B are equal so they both are a wise choice.
,d. Neither Fund A nor Fund B are wise choices. - Answers B
It is wise to wait until you are earning a substantial amount of money before you establish a disciplined
financial plan for your future.
Select one:
True
False - Answers False
When you use your debit card or ATM card, you should enter the transaction into your check register.
Select one:
True
False - Answers True
How do you compare cash management alternatives to determine which is best for you?
Select one:
a. Compare returns using comparable interest rates.
b. Take into account their tax status.
c. Consider their safety or risk.
d. All of these are correct. - Answers D
Money Market Deposit Accounts enjoy one advantage over savings accounts found in commercial
banks. This advantage is
Select one:
a. a variable rate that is generally higher.
b. lower fees and smaller minimum balances.
c. greater liquidity.
,d. unlimited check-writing privileges. - Answers A
Which of the following is not a common fee arrangement for checking accounts?
Select one:
a. Monthly fee
b. Minimum balance requirement
c. Variable interest rates to reflect fee activity
d. Charge per check
e. Balance-dependent scaled fees - Answers C
Which of the following financial institutions were originally established to provide mortgage loans to
depositors?
Select one:
a. Commercial banks
b. Savings and loan associations
c. Internet banks
d. Credit unions - Answers B
John and Maile Johnson
The Johnson family is very conservative financially. They have a retirement plan where John works and
share a joint checking account at their bank. They keep a lot of money in their checking account to cover
short-term needs and emergencies. Both of them want to step up to a higher interest rate than a
checking or savings account pays, and at the same time stay with their bank.
, The Johnsons have been thinking about the financial principle -Pay Yourself First. Being very
conservative, they might consider having their bank
Select one:
a. sell them a risky mutual fund.
b. send them a monthly reminder to make a deposit in their 401(k).
c. do a direct deposit of John's paycheck into their checking account.
d. do a direct deposit of some of John's paycheck into a savings fund. - Answers D
Liquid assets allow you to cover unplanned expenses without having to interrupt your long-term
investments or liquidate any tangible assets.
Select one:
True
False - Answers True
Please choose the method to use when calculating the after-tax return.
Select one:
a. Taxable return (1 + marginal tax rate) -nontaxable return
b. Taxable return (marginal tax rate -1) -nontaxable return
c. Nontaxable return (1 -marginal tax rate) + taxable return
d. Taxable return (1 -marginal tax rate) + nontaxable return
e. Nontaxable return (1 + marginal tax rate) -taxable return - Answers D
John and Maile Johnson
The Johnson family is very conservative financially. They have a retirement plan where John works and
share a joint checking account at their bank. They keep a lot of money in their checking account to cover
