UGBA 135 FINAL EXAM QUESTIONS
AND ANSWERS. VERIFIED 2025/2026.
Employers are never allowed to check credit reports when hiring - ANS false
Lenders use credit reports to help them decide whether to loan you money and what interest
rate to charge - ANS true
Which of the following is usually the most important type of debt to focus on paying off quickly:
- ANS Credit card balances
Which types of debt "steal from your future"? - ANS 1. paycheck advances
2. credit card balances
Why is Social Security called a PAYGO system? - ANS Because the payroll taxes paid by current
workers are used to pay current retirement benefits.
Medicare Part A, Hospital Insurance is free; people must pay for Medicare Parts B, C, and D if
they want them. - ANS TRUE
If you buy a company's bond - ANS you have lent money to the company
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Holding a diversified portfolio of stocks rather than an undiversified portfolio - ANS 1.
increases the variance (variation in outcomes) of the portfolio
2. increases the likelihood that you will own at least one stock that performs poorly
Actively trading common stocks is the best long-term investment strategy for most investors. -
ANS False
The potential advantages of index funds are - ANS 1. many have low fees
2. many are well-diversified
When buying a mutual fund, which of the following is most important? - ANS The fees the
fund charges
The fees charged by index funds vary with the types of assets the funds invest in. - ANS TRUE
Exchange Traded Funds (ETFs) sometimes charge high fees, but they are always well diversified.
- ANS False
Investments with higher risk always have higher expected returns. - ANS False
Common ways for financial advisors to be compensated are: - ANS 1. An annual percentage
of the client's assets under management.
2. Commissions
3. By the hour or a flat fee for specific services.
Typical annual financial advisor fees when charged as a percentage of assets under
management often exceed what you can earn today in a one year certificate of deposit. -
ANS True
Landlords can require tenants to have renters insurance. - ANS True
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
AND ANSWERS. VERIFIED 2025/2026.
Employers are never allowed to check credit reports when hiring - ANS false
Lenders use credit reports to help them decide whether to loan you money and what interest
rate to charge - ANS true
Which of the following is usually the most important type of debt to focus on paying off quickly:
- ANS Credit card balances
Which types of debt "steal from your future"? - ANS 1. paycheck advances
2. credit card balances
Why is Social Security called a PAYGO system? - ANS Because the payroll taxes paid by current
workers are used to pay current retirement benefits.
Medicare Part A, Hospital Insurance is free; people must pay for Medicare Parts B, C, and D if
they want them. - ANS TRUE
If you buy a company's bond - ANS you have lent money to the company
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Holding a diversified portfolio of stocks rather than an undiversified portfolio - ANS 1.
increases the variance (variation in outcomes) of the portfolio
2. increases the likelihood that you will own at least one stock that performs poorly
Actively trading common stocks is the best long-term investment strategy for most investors. -
ANS False
The potential advantages of index funds are - ANS 1. many have low fees
2. many are well-diversified
When buying a mutual fund, which of the following is most important? - ANS The fees the
fund charges
The fees charged by index funds vary with the types of assets the funds invest in. - ANS TRUE
Exchange Traded Funds (ETFs) sometimes charge high fees, but they are always well diversified.
- ANS False
Investments with higher risk always have higher expected returns. - ANS False
Common ways for financial advisors to be compensated are: - ANS 1. An annual percentage
of the client's assets under management.
2. Commissions
3. By the hour or a flat fee for specific services.
Typical annual financial advisor fees when charged as a percentage of assets under
management often exceed what you can earn today in a one year certificate of deposit. -
ANS True
Landlords can require tenants to have renters insurance. - ANS True
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
