FHCE 3200 Exam 3 UPDATED Exam Questions and CORECT Answers

FHCE 3200 Exam 3 UPDATED Exam
Questions and CORECT Answers
b. FALSE - CORRECT ANSWER TRUE or FALSE: A Roth IRA qualifies for the IRA tax
deduction found on the 1040 tax form.
a. TRUE
b. FALSE


a. Universal Transfer to Minors Act - CORRECT ANSWER Erin, a good friend of yours,
would like to transfer a boat she inherited to her nephew who is 9 years of age. She heard that
there is a way to go about doing this but is unsure. What type of custodial account will she need?
a. Universal Transfer to Minors Act
b. Universal Bequest to Minors Act
c. Universal Gift to Minors Act
d. Universal Tax Advantaged Trust for Minors


a. Real - CORRECT ANSWER The ___________ rate of return is calculated by subtracting
the rate of inflation from the expected annual percentage yield from an investment.
a. Real
b. Nominal
c. Accurate
d. Adjusted


b. FALSE - CORRECT ANSWER TRUE or FALSE: Subjective risk can be measured using
probabilities.
a. TRUE
b. FALSE


c. High - CORRECT ANSWER Commodities, collectibles, and speculative investments are
categorized _______ risk and return.

,a. Medium
b. Average
c. High
d. Low


b. Pure - CORRECT ANSWER An emergency fund is used to cover __________ risk.
a. Unexpected
b. Pure
c. Unavoidable
d. Possible


b. FALSE - CORRECT ANSWER TRUE or FALSE: A household's emergency fund ratio is
calculated by dividing long-term assets by monthly living expenses.
a. TRUE
b. FALSE


a. Hospital stays - CORRECT ANSWER Which of the following options represents the most
common emergency related expense?
a. Hospital stays
b. Unexpected Job loss
c. Car repair
d. Toothache


c. Opportunity - CORRECT ANSWER When a person is considering the benefits of two
options, he or she is weighing the ______________ cost of their decision.
a. Potential
b. Probable
c. Opportunity
d. Possible

, a. TRUE - CORRECT ANSWER TRUE or FALSE: A dedicated savings account is similar to
a CD but allows contributions to the account all the way up to its maturity date.
a. TRUE
b. FALSE


c. Treasury Bond - CORRECT ANSWER Which of the following bonds matures in 30 years
after its purchase?
a. Treasury Bill
b. Treasury Inflation Protected Security
c. Treasury Bond
d. Treasury Note


b. 59 ½ - CORRECT ANSWER When investing in qualified investment vehicles like a 401K
or Traditional IRA, households must wait until what age to withdraw from their account without
penalty?
a. 60
b. 59 ½
c. 65
d. 60


a. TRUE - CORRECT ANSWER TRUE or FALSE: The universal gift to minors act (UGMA)
is a custodial account that allows minors to hold shares of stock.
a. TRUE
b. FALSE


b. FALSE - CORRECT ANSWER TRUE or FALSE: The real rate of return on an investment
is typically higher than the nominal rate of return.
a. TRUE
b. FALSE