Quiz about Financial Terms Quiz

Question 1

Match the financial term with its correct definition: "Debt securities issued by a corporation or unit of government to raise money."

Accepted Answer

Bonds

Answer

Stocks

Answer

Portfolio

Answer

Net worth

Question 2

Match the financial term with its correct definition: "Total assets minus liabilities or debt."

Accepted Answer

Net worth

Answer

Stocks

Answer

Portfolio

Answer

Bonds

Question 3

Match the financial term with its correct definition: "Ownership of a corporation indicated by shares which represent a piece of the corporation's assets and earnings."

Accepted Answer

Stocks

Answer

Portfolio

Answer

Net worth

Answer

Bonds

Question 4

What is an application fee?

Accepted Answer

Money paid to the bank or mortgage company to cover expenses of processing a loan application

Answer

Money paid to secure a loan

Answer

Money paid for legal advice on a loan

Answer

Money paid for the first installment of a loan

Question 5

What does the term 'installments' refer to?

Accepted Answer

Buyer gains use of the commodity immediately and pays for it in periodic payments

Answer

A single sum of money which serves as complete payment

Answer

A fee charged for late payment of a loan

Answer

The initial payment made when securing a loan

Question 6

What is a lump sum?

Accepted Answer

A single sum of money which serves as complete payment

Answer

A fee for extending the term of a loan

Answer

A payment plan that allows for smaller, periodic payments

Answer

The total amount of interest paid over the life of a loan

Question 7

What term is used to describe a person who deposits money in a bank or who has a bank account?

Accepted Answer

Depositor

Answer

Interest

Answer

Annual percentage rate

Answer

Required minimum balance

Question 8

What is the term for the amount of money paid to a customer for money on deposit with a financial institution, or the amount of money paid by a customer to a financial institution for borrowing money through a loan, credit card, etc.?

Accepted Answer

Interest

Answer

Annual percentage rate

Answer

Depositor

Answer

FDIC

Question 9

What does FDIC stand for?

Accepted Answer

Federal Deposit Insurance Corporation

Answer

Financial Department of Investment and Credit

Answer

Fiscal Deposit and Insurance Company

Answer

Federal Department of Interest and Credit

Question 10

What does APR stand for?

Accepted Answer

Annual Percentage Rate

Answer

Approved Percentage Rate

Answer

Annual Profit Rate

Answer

Annual Public Rate

Question 11

What is the term for the least amount required to be kept on deposit in a bank account?

Accepted Answer

Required minimum balance

Answer

Interest

Answer

Annual percentage rate

Answer

Depositor

Question 12

What does a fixed rate interest imply?

Accepted Answer

Interest rate does not fluctuate during the fixed rate period of the loan

Answer

Interest rate may fluctuate up or down during the term of the loan

Answer

Numerical expression based on a statistical analysis of a person's credit files

Answer

Fair Isaac Credit Organization

Question 13

What is a credit score?

Accepted Answer

Numerical expression based on a statistical analysis of a person's credit files

Answer

Retail goods which have a high selling price in comparison to other items

Answer

Interest rate that does not fluctuate during the fixed rate period of the loan

Answer

Fair Isaac Credit Organization

Question 14

What does FICO stand for?

Accepted Answer

Fair Isaac Credit Organization

Answer

Adjustable rate interest

Answer

Big ticket purchases

Answer

Credit score

Question 15

What does "Take-Home Pay" refer to?

Accepted Answer

amount of a paycheck one gets to keep after taxes and other deductions are taken out

Answer

schedule of recurrent times in any regular system of preparing or sending bills

Answer

strong, usually irresistible, impulse to perform an act against a person's usual behavior

Answer

(a business or institution) initiated or operated for the purpose of making a profit

Question 16

What are items of value owned by the company called?

Accepted Answer

Assets

Answer

Net Worth

Answer

Financial Accounting Standards Board

Answer

Current Assets

Question 17

What is also called total equity, found by subtracting liabilities from assets?

Accepted Answer

Net Worth

Answer

Financial Accounting Standards Board

Answer

Current Assets

Answer

Cash

Question 18

What is money available immediately referred to as?

Accepted Answer

Cash

Answer

Net Worth

Answer

Financial Accounting Standards Board

Answer

Current Assets

Question 19

What is the definition of "Total Fixed Assets"?

Accepted Answer

The total dollar value of all fixed assets in your business, less any accumulated depreciation

Answer

Money owed to the business for purchases made by customers, suppliers, and other vendors

Answer

Debts the company owes or obligations the company has

Answer

Comprised of all short-term obligations owed by your business to creditors, suppliers, and other vendors

Question 20

What is meant by "Liabilities"?

Accepted Answer

Debts the company owes or obligations the company has

Answer

Money owed to the business for purchases made by customers, suppliers, and other vendors

Answer

Notes due within the year

Answer

The total dollar value of all fixed assets in your business, less any accumulated depreciation

Question 21

Which event is known as the most notorious tax protest that occurred when Americans protested taxation without representation by dumping 45 tons of tea off of British ships into the Boston Harbor?

Accepted Answer

Boston Tea Party (1773)

Answer

Tax day

Answer

Allowances

Answer

Excise tax

Question 22

What is the date specified by the federal government on which all taxes or payment extensions must be filed known as?

Accepted Answer

Tax day

Answer

Allowances

Answer

Excise tax

Answer

Taxable income

Question 23

What is the term for the amount of income subject to taxes such as Social Security and Medicare?

Accepted Answer

Taxable income

Answer

Tax day

Answer

Boston Tea Party (1773)

Answer

Allowances

Question 24

What is the form W-2 also known as?

Accepted Answer

Wage and Tax Statement

Answer

U.S. individual income tax return form

Answer

Tax form filled out by new employees

Answer

Effort to evade the payment of taxes

Question 25

What is the purpose of the form W-4?

Accepted Answer

To determine the amount of withholding tax from employee's wages

Answer

To report annual earnings

Answer

To evade the payment of taxes

Answer

U.S. individual income tax return form

Question 26

What is the form 1040 used for?

Accepted Answer

U.S. individual income tax return form

Answer

To determine the amount of withholding tax from employee's wages

Answer

To report annual earnings; given to employees by employers

Answer

Effort to evade the payment of taxes

Question 27

What classification does "Real Estate" fall under?

Accepted Answer

Asset

Answer

Liability

Answer

Owner's Equity

Answer

Expense

Question 28

Under which category would "Automobiles" be placed?

Accepted Answer

Asset

Answer

Liability

Answer

Owner's Equity

Answer

Revenue

Question 29

"Notes Payable" is considered a:

Accepted Answer

Liability

Answer

Asset

Answer

Owner's Equity

Answer

Revenue

Question 30

What type of account is "Accrued Payroll & Withholding"?

Accepted Answer

Liability

Answer

Asset

Answer

Owner's Equity

Answer

Expense

Question 31

The account "Stockholder's Equity" is classified as:

Accepted Answer

Owner's Equity

Answer

Asset

Answer

Liability

Answer

Revenue

Question 32

By the time Emma is 50, how much has her initial gift of $5,000 grown due to compound interest?

Accepted Answer

More than $50,313

Answer

Exactly $50,313

Answer

Less than $50,313

Answer

$5,000

Question 33

If the minimum payment on a credit card is between 2 and 3 percent of the card balance, and the card balance is $2,000, what is the minimum payment?

Accepted Answer

$60

Answer

$40

Answer

$50

Answer

$70

Question 34

What happens to the card balance over four months if only the minimum payment is made and no new purchases are added?

Accepted Answer

The balance decreases by less than $2 each month

Answer

The balance increases

Answer

The balance stays the same

Answer

The balance decreases by more than $2 each month

Question 35

Jenny works for a company which does not offer a retirement plan, so she makes monthly deposits into an account her investment advisor set up for her to use for her own retirement plan. What type of investment is she using?

Accepted Answer

Individual Retirement Plan

Answer

Mutual Fund Investments

Answer

Employer-Sponsored Plan

Answer

Individual Investments

Question 36

Betty wants to invest money over the next five years so she can start her own business. She does not have time to watch the stock market, but knows she needs to invest in different types of investments for a better chance at growth. What type of investment should she consider?

Accepted Answer

Mutual Fund Investments

Answer

Individual Retirement Plan

Answer

Employer-Sponsored Plan

Answer

Individual Investments

Question 37

Given the compound interest formula A = P(1 + r/n)^(nt), with P = $5,000, r = 0.08, n = 1, and t = 30, what is the approximate amount A that will be accumulated after 30 years?

Accepted Answer

$50,313

Answer

$15,000

Answer

$60,000

Answer

$45,000

Question 38

In the compound interest formula A = P(1 + r/N)^(N*T), what does the variable 'A' represent?

Accepted Answer

Ending amount

Answer

Amount invested

Answer

Annual interest rate

Answer

Number of times interest is compounded per year

Question 39

Which of the following is NOT a technique for calculating the time value of money?

Accepted Answer

Using a time machine

Answer

Using a formula

Answer

Using time value of money tables

Answer

Using a financial calculator

Question 40

If an investor wants to have $1,000 five years from now and he earns 5 percent on his savings, how much does he need to deposit now?

Accepted Answer

$784

Answer

$710

Answer

$1,000

Answer

$1,050

Question 41

What will be the future value after the last deposit if an investor deposits $50 a year at 7 percent for six years?

Accepted Answer

$357.65

Answer

$300.00

Answer

$350.00

Answer

$400.00

Question 42

What percentage of a budget is typically allocated for housing?

Accepted Answer

20 to 30 percent

Answer

4 to 7 percent

Answer

15 to 20 percent

Answer

35 to 45 percent

Question 43

Which category typically comprises 15 to 20 percent of a budget?

Accepted Answer

Food

Answer

Housing

Answer

Utilities

Answer

Transportation

Question 44

What is the total amount of liabilities in the Financial Liabilities Example?

Accepted Answer

$221,800

Answer

$100

Answer

$50,000

Answer

$170,000

Question 45

What is the present value of $3,500 earning 15 percent for 8 years?

Accepted Answer

$1,144.45

Answer

$1,157.25

Answer

$1,189.75

Answer

$1,235.50

Question 46

How many regional locations does The Federal Reserve Bank have?

Accepted Answer

12

Answer

5

Answer

10

Answer

15

Question 47

Who sets the monetary policy in the United States?

Accepted Answer

The Federal Reserve

Answer

Supreme Court

Answer

Federal Trade Commission

Answer

Senate

Question 48

Your goal in developing a _______ plan is to be able to pay all of your expenses each month and put money into a _______ or _______ account and having a good spending plan in place will help you achieve this goal.

Accepted Answer

savings

Answer

budget

Answer

investment

Question 49

More and more financial institutions are basing their decision to lend and to extend credit to an individual solely based on their _______ and their _______.

Accepted Answer

credit score

Answer

credit report

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