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1. The first step
in developing a sound financial plan is:
(a) defining your financial planning goals
(b) graduating from college and finding a job
(c) hiring a Certified Financial Planner
(d) winning the lottery
(e) paying
off your credit card debt |
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2. An
example of a physical or tangible asset is:
(a) your 1991 LEXUS 400 SC
(b) 500 shares of stock in Pfizer
(c) your share draft account at the John Deere Community Credit
Union
(d) a $1,000 General Obligation Bond on the UNI Maucker Union
(e) your mutual fund shares in the Oppenheimer
International Growth Fund
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3.
Humpty and Dumpty have a net worth of $50,000 and total assets
of $130,000. If their installment loans amount to
$10,000, what are their total liabilities?
(a) $10,000
(b) $50,000
(c) $70,000
(d) $80,000
(e) $90,000
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4.
Frank and Beth invested $50,000 in the U.S. Legacy Growth Fund five
years ago. If the fund has appreciated at an annual rate of
8%, what is it worth today?
(a) $50,000
(b) $53,201
(c) $63,023
(d) $70,012
(e) $73,466
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5. Anne
started saving $30 a month at age 12 in a savings account earning 5%
compounded monthly. At age 60, she would have _____ in her
account.
(a) $17,280
(b) $30,214
(c) $48,201
(d) $62,835
(e) $71,772
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6.
Frank and Beth purchased a home in Cincinnati for $120,000 in
1997. They live in the home for the past six years and sell it
in order to move to Cedar Falls. Their Cincinnati home is sold
for $250,000. The capital gains of their Cincinnati home will:
(a) be taxed as ordinary income at their marginal tax rate
(b) not be taxable because the home was their principle residence at
the time of sale
(c) not be taxable because taxes on the sale of property are
voluntary
(d) be taxed at a 15% long-term capital gains tax rate
(e) be taxable at the appropriate long-term capital gains rate based
on a 6-year holding period and recapture of depreciation
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7.The
applicable Federal Income Tax form for recording capital gains and
losses is:
(a) 1040 EZ
(b) Schedule A
(c) Schedule B
(d) Schedule C
(e) Schedule D
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8. A
method for meeting the Federal Income Tax requirement for
withholding and estimated tax payments would be:
(a) To pay 100% of the tax due for the tax year as of
December 31st
(b) To pay 90% of the tax due for the tax year as of December 31st
(c) To pay 100% of last year's tax as of December 31st
(d) All of the Above
(e) To pay 90% of last year's tax as of December 31st
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9. In
1998 you purchased a 15 year UNI General Obligation Bond for $10,000
paying interest of 6%. The bonds were issued at par, $10,000
to pay for the Redecker Cafeteria Addition. In 2003, you
decide to sell the bonds to pay for the increased room and board
costs at UNI. If market rates of interest are 3.5%, you will
receive:
(a) the par value $10,000 since you are selling the bonds prior to
maturity.
(b) more than $10,000 since the bond is selling at a premium
(c) less than $10,000 since interest rates have gone up
(d) more than $10,000 since the bond is selling at a discount
(e) less than $10,000 since the bond is selling at a discount
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10.
Which of the following are considered legal methods for reducing
your federal income taxes?
(a) contributing to a pension plan
(b) purchasing a municipal bond
(c) ignoring income from tips while working at a restaurant
(d) All of the above
(e) only A and B
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| 11.An Asset Management Account provides:
(a) a checking account (b) a money market deposit account (c) a
brokerage account (d) a line of credit (e) all of the above
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| 12.As the seller of your home in Cedar
Falls, you will pay the: (a) loan closing costs of the buyer (b) all
appraisal, inspection and title insurance costs on your
property (c) the points charged at the time of closing (d)
fees for a title search and title insurance (e) the real estate
agent's commission
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| 13.Having taken a financial planning
course, you decide to invest $1,000 per year at the end of each of
the next 5 years in an account earning 10% interest. How much
will you have accumulated at the end of 5 years? (a) $6,105
(b) $6710 (c) $5,100 (d) $5,106 (e) none of
these
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| 14.A loan from the cash value on your
permanent life insurance policy would be characterized by: (a) the
size of the face amount of coverage and the age of the contingent
beneficiary (b) increased premiums based on the riskiness of
the loan (c) a loan rate substantially higher than other
finance company loans (d) no specific repayment date (e)
an increase in dividend payments to lower the financing costs of the
loan
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| 15.You have a $1,250 balance on your
credit card account. The minimum payment on your account is 5%
of the latest balance or $10, which ever is greater. What will
be the minimum payment this month? (round to the nearest
dollar) (a) $10 (b) $25 (c) $56 (d) $63 (e)
none of these, it's illegal to require a minimum payment
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| 16.To establish creditworthiness you
probably should first: (a) go to a pawn shop and take out a loan (b)
use credit extensively (c) get married and open up a joint checking
account (d) open savings and checking accounts (e)
arrange a large loan from close relatives with a low interest rate |
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| 17.I.M. Rich owns 200 shares of Texas
Tea Oil and Drilling Company (TTOD) stock. The company
declared a 5% stock dividend. I.M. Rich now owns: (a) 200
shares of TTOD stock (b) 190 shares of TTOD stock (c) 205
shares of TTOD stock (d) 210 shares of TTOD stock (e) 420 shares of
TTOD stock
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| 18.Texas Instruments has a beta of 1.0;
if the market goes up by 8% this year, on average, the value of this
company's stock should (a) decline by 8% (b) decline by 1% (c)
stay the same (d) increase by 1% (e) increase by 8%
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| 19.Duke Wayne is in the 28% tax
bracket. If he were to purchase a $1,000 municipal bond that
had a stated interest rate of 6.9%, the taxable equivalent yield
would be: (a) 9.583% (b) 6.9% (c) 8.231% (d)
7.125% (e) 4.948%
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| 20.Investment company earnings come
from: (a) capital gains (b) the Easter Bunny (c)
interest, dividends, and capital gains from investment (d)
interest and undivided capital surplus (e) interest and
dividends
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