Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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The assessed value of a home is used to determine a homeowner’s
a. | insurance bill. | c. | mortgage payments. | b. | maintenance expenses. | d. | property tax. |
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2.
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A futures contract is NOT commonly used when investing in
a. | sport trading cards. | c. | foreign currencies. | b. | agricultural products. | d. | precious
metals. |
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3.
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For their first residence, many people rent
a. | a townhouse | c. | a mobile home. | b. | a condominium. | d. | an apartment. |
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4.
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A Series EE savings bond purchased for $50 would have a maturity value of
a. | $100 | c. | $75 | b. | $50 | d. | none of the
above. |
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5.
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An appraiser helps a home buyer by
a. | estimating the value of a home that is being considered. | b. | reducing the taxes
owed on a home. | c. | providing current information on mortgage rates. | d. | showing various
homes available for sale. |
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6.
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Julie is concerned about changing interest rates in the future. Which
mortgage would be the best recommendation?
a. | adjustable rate | c. | condominium | b. | fixed rate | d. | equity |
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7.
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Which of the following can give an indication of whether a stock is priced high
or low in relation to its earnings per share?
a. | dividend ratio | c. | price-earnings ratio (P/E) | b. | market
value | d. | maturity
value |
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8.
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A professional trained to assist people with buying or selling a home is
a. | a real estate agent. | c. | a lawyer. | b. | an appraiser. | d. | an assessor. |
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9.
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A mortgage is used to
a. | rent a apartment. | c. | borrow money to buy a home. | b. | insure
property. | d. | invest in stocks
and bonds. |
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10.
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Items of personal interest that can decrease in value in the future are
called
a. | commodities. | c. | essentials. | b. | futures. | d. | collectibles. |
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11.
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If interest rates on similar bonds are higher than a certain bond’s stated
interest rate, the price of the particular bond will tend to
a. | rise. | c. | change in an uncertain manner. | b. | remain
constant. | d. | decline. |
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12.
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The market value of a stock can be affected by
a. | how well a business is doing. | b. | the state of the economy. | c. | the current phase of
the business cycle. | d. | all of the
above. |
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13.
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A municipal bond represents
a. | ownership in a company. | b. | an investment in a foreign
corporation. | c. | a corporate debt. | d. | borrowing by a state or local
government. |
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14.
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A debt security represents
a. | ownership in a company. | c. | profits of a
company. | b. | borrowing by a company. | d. | taxes paid by a company. |
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15.
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Mutual fund refers to
a. | bonds issued by local and state governments. | b. | a small group of
people organized to study stocks and to invest their money. | c. | the process used to
buy or sell a stock. | d. | an investment company that receives money from
many investors. |
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16.
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An example of an equity security is a
a. | type of debt. | c. | share of stock. | b. | bond. | d. | municipal bond. |
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17.
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A person’s equity in a home would increase as a result of higher
a. | interest rates. | c. | property values. | b. | taxes. | d. | insurance
costs. |
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18.
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The federal government debt security with the shortest maturity would be a
a. | Treasury bond. | c. | Treasury note. | b. | Treasury Bill. | d. | Municipal Bond. |
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19.
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An investment with an unusually high risk is called a
a. | risk free investment. | c. | continuing investment. | b. | speculative
investment. | d. | calculated
investment. |
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