Question

QUESTION 11

1. Mutual funds that carefully select stocks and bonds--relying on smart managers' skills--generally outperform passive, index funds, even though they charge higher fees.

   True

   False

5 points   

QUESTION 12

1. If you wanted to buy shares of common stock in IBM, what market would you make a purchase in?

   		New York Stock Exchange
   		S&P 500
   		Tokyo Stock Exchange
   		Nasdaq

5 points   

QUESTION 13

1. All else equal, an adjustable rate mortgage is riskier to the borrower than a fixed rate mortgage.

   True

   False

5 points   

QUESTION 14

1. If you want to invest your money in a retirement account, an investment bank is the type of bank you should open an account with.

   True

   False

5 points   

QUESTION 15

1. Match the type of account with its description.

   -       A.       B.       C.       D.	A type of deposit account that generally earns interest, but has a limit on the number of withdrawals per month.
   -       A.       B.       C.       D.	A transaction account that allows the user to treat it like cash; there are no limits on the number of transactions per month.
   -       A.       B.       C.       D.	A deposit that cannot be withdrawn for a fixed amount of time, over which a fixed amount of interest is earned.
   -       A.       B.       C.       D.	A deposit account that allows a limited number of transactions and has a minimum balance, but earns interest at market rates.

   A.	Checking account
   B.	Money market account
   C.	Certificate of deposit
   D.	Savings account

5 points   

QUESTION 16

1. A conforming loan is generally easier to get than a non-conforming or jumbo loan. As of 2018 and in most jurisdictions (exclude high-cost areas), what is the most you can borrow and still have a conforming loan?

5 points   

QUESTION 17

1. Suppose you receive a moderate amount of money and you decide to pay off some of your debts. Which debts should you try to pay off first?

   		The debt with the highest interest rate (often a credit card)
   		Mortgages
   		Make equal payments to every account
   		Student loans

5 points   

QUESTION 18

1. If you have a brokerage account and your brokerage goes out of business, which government-run organization will pay you insurance, and how much?  (enter the acronym),           (enter the number)

   If you have a checking account at a bank and your bank goes out of business, which government-run organization will pay you insurance, and how much?   (enter the acronym),       (enter the number)

5 points   

QUESTION 19

1. Select all of the items from the list below that can be itemized deductions on your personal tax return.

   		Charitable donations
   		Unreimbursed medical expenses
   		Rent on your personal apartment
   		Interest on a mortgage

5 points   

QUESTION 20

1. If you currently have a portfolio of corporate bonds and interest rates go up, your portfolio becomes....

   		less valuable
   		it depends/not enough information
   		more valuable
   		trick question, nothing changes because its fixed income

5 points   

QUESTION 21

1. When something is tax deductible (i.e., it is a tax write-off), that means it.....

   		is effectively less expensive, because it changes the tax bracket you're in.
   		is very dangerous, because it means you're committing tax evasion.
   		is effectively free, because it reduces your taxes by the amount you write-off.
   		is effectively less expensive, because it reduces the amount of taxable income you have.

5 points   

QUESTION 22

1. Suppose you want to buy a house today that costs $147,491. The bank requires you to make a 20% down payment, but you can borrow the rest. If you are charged 4.71% APR and the mortgage is for 30 years, what is your monthly payment?

5 points   

QUESTION 23

1. Suppose you have a credit card with a balance of $14,303.87 that charges 19.04% APR on unpaid balances. The minimum payment each month is $35. If you make just the minimum payment, how much interest will be added to your account balance?

Answer 1

QUESTION 11

FALSE.

Mutual fund managers over the long period of time underperform the passive index funds. Investors in mutual funds not only lose from the underperformance of the fund but also due to the higher fees charged by the fund managers.

QUESTION 12

IBM is listed in New York Stock Exchange (NYSE) and we can buy the shares of IBM from NYSE.

Option A is correct.

Other answer options are incorrect because IBM is not listed in Nasdaq or Tokyo Stock Exchange. And, S&P 500 is just an index comprising of 500 stocks.

QUESTION 13

TRUE.

All else being equal, Adjustable Rate Mortgages are riskier than fixed rate mortgages because of the uncertainty in future interest rates.

QUESTION 14

FALSE

Retirement accounts are opened with commercial banks, not investment banks.