BUS 6600 FINAL EXAM | QUESTIONS AND CORRECT ANSWERS
WITH RATIONALES | GRADED A+ | VERIFIED ANSWERS | LATEST
EXAM
The people who assist families in developing a comprehensive program that
covers investments, taxes, insurance, and retirement plans are called -
CORRECT ANSWER - financial planners
A homeowner's insurance policy that includes a provision for __________
would provide the homeowner with enough cash to replace the items lost with
new items - CORRECT ANSWER - guaranteed replacement cost
Throughout history an investment in __________ has yielded an excellent
return, regardless of the state of the economy or political changes - CORRECT
ANSWER - a good education
The only way to accumulate enough money to do all of the things you want to
do late in life is to - CORRECT ANSWER - make more than you spend
What is a form of whole life insurance that provides a death benefit that varies
with the performance of the investments of the insurance company? -
CORRECT ANSWER - variable life insurance
Once you have set up a budget and handled your ordinary expenses, the first
thing to do with any extra money you have is to - CORRECT ANSWER - pay
off your debts
What is an indication that the government recognizes Social Security money
will not provide you with ample funds for retirement? - CORRECT ANSWER
,- The government has established incentives for workers to save their own
money for retirement
About __________ of all U.S. households own stock and mutual funds -
CORRECT ANSWER - half
Real estate taxes and mortgage interest payments are both - CORRECT
ANSWER - tax deductible for homeowners
The tax-deferred investment plan that allows employees to save part of their
income for retirement is called an - CORRECT ANSWER - individual
retirement account (IRA)
A Keogh retirement plan would be used by a - CORRECT ANSWER - self-
employed engineering consultant
The goal of accumulating capital is to allow an individual to - CORRECT
ANSWER - have funds available to invest
If a stock's closing price for the day is 32.47, the stock's price in U.S. dollars
would be - CORRECT ANSWER - $32.47
Firms establish a __________ so that sufficient funds are available to repay
bondholders on the maturity date - CORRECT ANSWER - sinking fund
The higher the risk associated with a bond issue, the __________ the interest
rate the organization must offer investors - CORRECT ANSWER - higher
Corporations benefit from securities markets primarily by - CORRECT
ANSWER - obtaining the capital they need to finance their operations
, The Dow Jones Industrial Average represents the average price of __________
industrial stocks - CORRECT ANSWER - 30
Bonds that pay very high interest rates and typically have a higher risk of
default are known as __________ bonds - CORRECT ANSWER - junk
By buying a __________ bond, investors will have an option to exchange their
bond for shares of common stock in the company at a future date - CORRECT
ANSWER - convertible
Similar to bond investments, preferred shares can be __________, meaning the
firm may buy them back - CORRECT ANSWER - callable
The process in which an investor borrows a percentage of the purchase price of
stocks from the brokerage firm is called - CORRECT ANSWER - buying on
margin
The risk associated with Firm A's bond is greater than the risk of Firm B's bond.
All other things being equal, investors would be willing to pay __________ for
Firm B's bond - CORRECT ANSWER - more
The cost of a firm borrowing money is called the - CORRECT ANSWER -
interest rate
An __________ refers to the first public offering of a corporation's stock. -
CORRECT ANSWER - initial public offering (IPO)
Dividends are paid out of a corporation's - CORRECT ANSWER - profit, after
taxes
WITH RATIONALES | GRADED A+ | VERIFIED ANSWERS | LATEST
EXAM
The people who assist families in developing a comprehensive program that
covers investments, taxes, insurance, and retirement plans are called -
CORRECT ANSWER - financial planners
A homeowner's insurance policy that includes a provision for __________
would provide the homeowner with enough cash to replace the items lost with
new items - CORRECT ANSWER - guaranteed replacement cost
Throughout history an investment in __________ has yielded an excellent
return, regardless of the state of the economy or political changes - CORRECT
ANSWER - a good education
The only way to accumulate enough money to do all of the things you want to
do late in life is to - CORRECT ANSWER - make more than you spend
What is a form of whole life insurance that provides a death benefit that varies
with the performance of the investments of the insurance company? -
CORRECT ANSWER - variable life insurance
Once you have set up a budget and handled your ordinary expenses, the first
thing to do with any extra money you have is to - CORRECT ANSWER - pay
off your debts
What is an indication that the government recognizes Social Security money
will not provide you with ample funds for retirement? - CORRECT ANSWER
,- The government has established incentives for workers to save their own
money for retirement
About __________ of all U.S. households own stock and mutual funds -
CORRECT ANSWER - half
Real estate taxes and mortgage interest payments are both - CORRECT
ANSWER - tax deductible for homeowners
The tax-deferred investment plan that allows employees to save part of their
income for retirement is called an - CORRECT ANSWER - individual
retirement account (IRA)
A Keogh retirement plan would be used by a - CORRECT ANSWER - self-
employed engineering consultant
The goal of accumulating capital is to allow an individual to - CORRECT
ANSWER - have funds available to invest
If a stock's closing price for the day is 32.47, the stock's price in U.S. dollars
would be - CORRECT ANSWER - $32.47
Firms establish a __________ so that sufficient funds are available to repay
bondholders on the maturity date - CORRECT ANSWER - sinking fund
The higher the risk associated with a bond issue, the __________ the interest
rate the organization must offer investors - CORRECT ANSWER - higher
Corporations benefit from securities markets primarily by - CORRECT
ANSWER - obtaining the capital they need to finance their operations
, The Dow Jones Industrial Average represents the average price of __________
industrial stocks - CORRECT ANSWER - 30
Bonds that pay very high interest rates and typically have a higher risk of
default are known as __________ bonds - CORRECT ANSWER - junk
By buying a __________ bond, investors will have an option to exchange their
bond for shares of common stock in the company at a future date - CORRECT
ANSWER - convertible
Similar to bond investments, preferred shares can be __________, meaning the
firm may buy them back - CORRECT ANSWER - callable
The process in which an investor borrows a percentage of the purchase price of
stocks from the brokerage firm is called - CORRECT ANSWER - buying on
margin
The risk associated with Firm A's bond is greater than the risk of Firm B's bond.
All other things being equal, investors would be willing to pay __________ for
Firm B's bond - CORRECT ANSWER - more
The cost of a firm borrowing money is called the - CORRECT ANSWER -
interest rate
An __________ refers to the first public offering of a corporation's stock. -
CORRECT ANSWER - initial public offering (IPO)
Dividends are paid out of a corporation's - CORRECT ANSWER - profit, after
taxes
