W!se Practice Test 4

One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchases he is he liable for is:

• zero

• $50

• The total amount

• $25

Why is term life insurance usually the least expensive type of life insurance?

• The policy only pays a death benefit

• The policy builds a cash value

• The policy provides coverage for a lifetime

• The policy is available to all consumers

Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?

• All checking accounts pay interest

• Some types of checking accounts pay interest

• Checking accounts never pay interest

• Checking accounts pay interest if the account balance does not fall below $300.00

A factor that is likely to affect the market price of a stock is:

• The age of the corporation

• Corporate profits

• The number of corporate employees

• Wages

When Lucy was born, her grandparents gave her a Series EE savings bond that will be worth $1,000 at maturity. Her grandparents paid:

• $1,000 for the bond

• $500 for the bond

• $750 for the bonding

• These bonds are gifts for long term depositors

Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?

• Cash value grows gradually over time

• If the policy is cancelled, you may be entitled to some or all of the accrued cash value

• Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value

• When an insured person dies, the beneficiary will receive the death benefit but the insurance company keeps the cash value

Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?

• Series EE savings bond

• Certificate of deposit

• 50 shares of ABC Co. stock

• ABC Co. bond

Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid?

• Cashier’s Check

• Certified check

• Credit Card

• A check

Predatory lending practices do not include which of the following:

• A creditor knocking on your door and agreeing to refinance your mortgage without looking at your credit history

• An individual agreeing to a high cost loan with excessive fees

• A lender who expects a loan to be refinanced when you are unable to make payments

• A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions

The federal agency that regulates the securities industry is the:

• Federal Trade Commission

• Department of Commerce

• Securities and Exchange Commission

• Federal Reserve