Pmm Exam #2

Front 1

All of the following statements are considered to be good advice for a potential investor starting an investment except

Back 1

increase credit purchases and make installment payments in order to increase cassh available for investing

Front 2

An emergency fund should be deposted in a

Back 2

savings account at the highest available interest rate

Front 3

Allen earns $3000 per month. He pays his mortgage, utilies, grocery, and other bills and then he makes sure to set aside $150 for his savings and investment accounts before he spends money to go to the movies and other personal expenses. Which suggestion for obtaining the money he needs for investing is he following

Back 3

paying himself first

Front 4

alice makes sure to contribute ten percent of her monthly earnings to her 401k plan at work. Her 401k plan allows her to invest in several different types of mutual funds and her employere matches up to 5% of her salary. which suggestion for obtaining money she needs for investing is she following

Back 4

taking advantage of empoyer sponsered retirement programs

Front 5

james has a mutual fund that automatically takes out $50 out of his checking account each month. which suggestion for obtaining the money he needs for investing is he following

Back 5

participation in an elective savings program

Front 6

After christmas is over, ted works hard to control his expenses in feb so that he can make an extra payment into his mutual fund. Which suggestion for obtaining the money needs for investing is he following

Back 6

making a special effort once of twice a year to save

Front 7

sam just received $10000 from his grandmothers estate. He has though about buying himself a new harley with the money but has decided to instead ass the money to his mutual fund account. which suggestion for obtaining the money he needs for investing is he following

Back 7

taking advatage of gifts, inheritance, and other windfalls

Front 8

The ease with which an investment can be converted to cash without a substantial loss in dollar value is called

Back 8

liquidity factor

Front 9

equity capital is money

Back 9

obtained from the owners of the business

Front 10

a type of investment that combines and invests the funds of many investors and manages it with a professional manager is called an

Back 10

mutual fund

Front 11

bob is thinking about buying and investing. the investment option that he is thinking about buying a is a piece of property. The most important consideration when making this investment is the location of the property. what investment is bob thinking about purchasing?

Back 11

real estate

Front 12

Which of the following is the most readily available source of current price information for an investment in stocks or bonds

Back 12

the daily newspaper

Front 13

which of the following is not a business periodical

Back 13

new york stock exchange report

Front 14

the fees for investor services and newsletters generally range from blank a year

Back 14

30 to 1000

Front 15

standards and poors and megents are companies that would be examples of

Back 15

investors services

Front 16

brenda has received a 10000 gift from her mother and is triying to decide how to invest it. she thinks she would like to invest it in stocks because she knows that stocks have been eacning about 10% rate of return over the last several years. What aspect of investing is brenda most concened about

Back 16

risk

Front 17

Allison wants to invest but is worried about risk. In particular she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected. What type of risk is allison most concerned about?

Back 17

business failure risk

Front 18

Terry has just receivd $30000 from an uncle who died and is trying to decide how to invest it. she has done some research and has decided that about 30%of the money should go into large cap stocks, 20% in medium cap stocks, and 15% into small cap stocks. What aspect of investing is tery most concerned abotu

Back 18

diversification

Front 19

kevin is thinking about buying an investment. the investment option that he is thinking about buying is a written pledge by a corportation to repay a specified amount of money. It also pays interest payments every 6 months until it matures. wwhat investment is kenin thinking about purchasing

Back 19

corporate bond

Front 20

the maturity date for most bonds range between blank years

Back 20

1 to 30

Front 21

a mutual fund in which investors pay a commision every time they purchase shares is called

Back 21

load

Front 22

a mutual fund in which no sales charge is paid by investors is called an blank fund

Back 22

no load

Front 23

which of the following statements is false

Back 23

investors who purchase mutual funds are guaranteed a higher rate of return than a comparable investment in stocks or bonds

Front 24

the allstar basic value funds porfolio is value at $210 million. the fund has liabilities of $5 million, and the investment company sponsoring the fund has issued 16,400,000 shares. what is the funds net asset?

Back 24

$12.50. value-liabilies/shares

Front 25

for most mutual funds, the net assest value is calculated

Back 25

daily

Front 26

all the different fees and fund operating costs are often refefered to as an

Back 26

expense ratio

Front 27

many financial planners recommend that investors pick a mutual fund with an expense ratio that is

Back 27

1 percent or less

Front 28

a mutual fund that invests in the common stocks of companies in the same industry is called a

Back 28

sector

Front 29

a mutual fund that invests in companies outside the US is called a blank fund

Back 29

global market

Front 30

a municipal bond fund

Back 30

provides investors with tax free income

Front 31

henrietta plans to retire in the year 2050. she is considering a fund that will be more agressive now and become more conservative as she approaches retirement. which of the following funds would you recommend?

Back 31

lifecycle fund

Front 32

the typical expense ratio for an index fund is

Back 32

0.5 percent or less

Front 33

an investment company sponsoring a mutual fund must give potential investors a

Back 33

prospectus (history of the fund, cost, fees, etc

Front 34

as a shareholder in a mutual fund, you should receive an

Back 34

annual report

Front 35

income dividends and capital gain distributions are

Back 35

subject to federal taxation

Front 36

poe is buying shares in a mutual fund that only invests in companies from countries other than the US. what type of mutual fund has she purchased.

Back 36

a global fund

Front 37

peggy is buying shares in a mutual fund that avoids companies that do harm to people, animla, and the environment. what type of mutual fund has she purchased

Back 37

a socially responsilbe fund

Front 38

sharon has a mutual fund and she has used all dividend income and capital gain distributions to purchase additional shares in her mutual fund. which of the following plans is she using

Back 38

a reinvestment plan

Front 39

health insurance is a form of protection that eases the financial burden peopple may experience as a result of someone's death

Back 39

false

Front 40

all group health insurance plans provide the same level of protection

Back 40

false

Front 41

surgical expense coverage for health insurance includes surgeons fees in a doctors office

Back 41

true

Front 42

a deductible is the amount you must pay before benefits become payable by the insurance comapny

Back 42

true

Front 43

a health insurance policy that pays you back for actual expenses is called a reimbursement policy

Back 43

true

Front 44

a ppo is another name for an hmo

Back 44

false

Front 45

medicare is offered to certain low income individuals and families

Back 45

false

Front 46

disability income insurance covers your medical expenses when you are disabled

Back 46

false it provides 60%percent of your income and covers wages

Front 47

the definition of disability is stricter for SS than for empoyer plans

Back 47

true

Front 48

a disability policy with a longer elimination period typically charges lower premiums than a policy with a short elimination period

Back 48

true

Front 49

disability income insurance policies are required to provide benefits for disabled policyholdrers until the age of 65

Back 49

false

Front 50

everyone qualifies for COBRA

Back 50

false it provide unemployment up to 18 months

Front 51

what is the primary purpose of medical expense insurance

Back 51

pay actual medical costs for illness or injury

Front 52

most people receive health insurance from

Back 52

a plan offered by their employer

Front 53

the type of health insurance coverage that pays for some or all of the daily costs of room and board during a hospital stay is

Back 53

hospital expense

Front 54

a policy that pays you back for actual expenses is called

Back 54

a reimbursement plan

Front 55

the st amount that you must pay toward medical expenses before the insurance company pays benefits is called

Back 55

deductible

Front 56

which of the following is not a private health care plan

Back 56

medicare

Front 57

blue cross and blue shield are

Back 57

hospital and medical service plans

Front 58

sandy went to the doctor three times and each appointment cost her $200 dollars. her copayment was $25 per visit. how much was sandy required to pay in total for her three visits?

Back 58

$75

Front 59

an implied warranty that comes with a used car is that

Back 59

the vehicle must be in operating condition

Front 60

a vehicle sold as is has

Back 60

no express warranty

Front 61

most cars bought from private parties have

Back 61

no express warranty

Front 62

the purpose of edmonds guide is to

Back 62

provide privce data

Front 63

the sticker price of a car refers to

Back 63

the suggested retail price of a new car

Front 64

the purpose of the invoice price is to inform customers of the

Back 64

dealer's cost

Front 65

the purpose of an automobile service contract is to

Back 65

repair major problems after the warranty expires

Front 66

a disadvantage of leasing an automobile would be the

Back 66

limited mileage in the lease agreement

Front 67

which of the following is usally the largest fixed expense for a new vehicle

Back 67

depreciation

Front 68

blank is considered a variable operating expense of an automobile

Back 68

maintenance

Front 69

parrish has purchased a new card. since then, she has had to make siz trips to the dealer in four weeks to fix seceral problems without much luck. she knows that she is entitled to a refund. what type of law gives her the right to ask for a refund.

Back 69

lemon law

Front 70

a motor vehicle has annual depreciation of 2000 dollars, oil changes cost 120 dollars, auto insurance is 500 dollars, and 100 for lisense plates. what is the annual ammount of the total fixed operating cost for this vehicle.

Back 70

2720 dollars

Front 71

the major function of a financial plan is to

Back 71

acheive financial goals

Front 72

an advantage of personal financial planning is to

Back 72

increased control of financial affairs

Front 73

attempts to increase income are part of the blank comonent of financial planning

Back 73

obtaining

Front 74

the borrowing activity in a financial plan relates to

Back 74

mainting control of credit buying habits

Front 75

the problem of bankruptcy is associated with poor decisions int eh blank component f financial planning

Back 75

borrowing

Front 76

the first step of the financial planning process is to

Back 76

analyze your current personal and financial situation

Front 77

financial decisions related to income include all expcet the following

Back 77

taking

Front 78

the uncertainty associated with decision making is reffered to as

Back 78

risk

Front 79

changes of income, values, and family situation make it necessary to

Back 79

evaluate and revise your actiosn

Front 80

if inflation is expected to be 8% how long will it take for prices to doubles

Back 80

9 years "The rule of 72" divide 72 by interest rate

Front 81

annual earnings on a 2000 dollar certificate of deposit earning 3.15% would be

Back 81

63 dollars

Front 82

personal financial planning is the process of managing your money to acheive personal economic satisfaction

Back 82

true

Front 83

financial plans are only created by financial planners

Back 83

false

Front 84

the life situation of a housefold has little influence on personal financial planning decisions

Back 84

false

Front 85

the long term goals for a young single will probabyl be the same for those for an older couple with no dependant children at home

Back 85

false

Front 86

inflation reduceds the buying power of money

Back 86

true

Front 87

retirement planning includes thinking about your housing situation, recreational activites, and possible volunteer or part time work

Back 87

true

Front 88

short term goals are usally acheieved within a year a orso

Back 88

true

Front 89

intermediate goals are usually acheieved within the next year or so

Back 89

false

Front 90

purchasing a car is an example of consumable product goal

Back 90

false