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FP 100T Week 1 WileyPLUS Weekly Exam
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In this graded assignment, you are assessed on the content covered in
this weeks’ readings, activities, and assignments. To help you prepare, it
is recommended that you first complete this week’s Learning Path and
Self-Test Learning Activities prior to completing this exam.
Complete the Week 1 Exam covering this week’s assigned readings:
“Ch. 1: The Financial Planning Process”
“Ch. 2: Financial Planning Tools: Personal Financial Statements and the
Time Value of Money”
Note: Work submitted in WileyPLUS does not count toward attendance.
Be sure to post at least two times each week in the online classroom to
avoid being auto-dropped from the course.
Question 1
Your answer is correct.

Which of the following in NOT one of the recommended SMART
guidelines for personal financial goals?
Specific
Realistic
Attainable
Manageable
Attainable
Manageable

Question 2
Which of the following describes a financial advisor who is paid based
on a percentage of products sold or purchased by clients?
Fee-based
Commission-only
Fee plus commission
Fee-only

Question 3
A comprehensive financial plan includes three steps: establishing a firm
foundation, securing basic needs, and
building and protecting wealth.
setting long-term goals.
monitoring progress.
setting short-term goals.

Question 4
Which of the following would NOT be a major factor when choosing a
personal financial planner?
education
affiliation
reputation
certification

Question 5
The federal funds rate is the rate that
credit card issuers use as the teaser rate.
banks charge customers for short-term loans.
banks charge each other for short-term loans.

the Federal Reserve charges banks for short-term loans.
Question 6
An expansion is a phase in the economic cycle that is characterized by
decreasing business investment and decreasing employment
opportunities.
increasing business investment and decreasing employment
opportunities.

increasing business investment and increasing employment
opportunities.
decreasing business investment and increasing employment
opportunities.
Question 7
Which of the following describes a Certified Financial Planner (CFP®)?
A CFP® has passed a rigorous exam.

A CFP® has worked in the banking industry.
A CFP® has at least five years of experience.
A CFP® majored in financial planning in college.
Question 8
In deciding whether to go to graduate school, evaluating the benefit
based on the potential change in your earnings is an example of

sensitivity analysis.
future value.
opportunity cost.
marginal reasoning.
Question 9
The financial planning process includes five steps. Four of the steps are
listed below:

Analyze your current financial status.
Implement your financial plan.
Monitor your progress and revise your plan as needed.
Organize your financial information and set short-term and long term
goals.
What is the missing step?
Identify and evaluate alternative strategies for meeting your goals.
Understand the personal financial planning process.
Acquire the necessary decision-making skills and tools.
Build wealth and protection against emergencies.

Question 10
In a fee-based arrangement, the planner is compensated with an annual
fee that is usually
a set amount for all clients.
based on the number of financial products purchased.
waived for large investment portfolios.

based on the size of the client’s asset portfolio being managed.
Question 11
Which of the following is NOT one of the steps in the personal financial
planning process?
Purchase life insurance.
Implement a plan for achieving goals.

Identify and evaluating alternative strategies for achieving goals.
Develop short-term and long-term financial goals.
Question 12
In a __________ arrangement, the planner is compensated for every
financial product sold but does not receive any payment for developing a
personal financial plan.

fee offset by commission
commission only
fee plus commission
fee only
Question 13
Which of the following has passed a comprehensive examination
covering all the topic areas considered necessary in the practice of
financial planning and has at least three years of work experience in the
field?

Certified Public Accountant (CPA)
Certified Financial Planner (CFP®)
Accredited Financial Planner (AFC)
Chartered Financial Consultant (ChFC)
Question 14

The basic idea of the time value of money is that $1 to be received in the
future is worth ______ $1 received today because of the value of the
compound interest.
less than
more than
the same as
Question 15

A financial statement used to evaluate the relationship between your
income and expenditures is known as a
personal cash flow statement.
cost-benefit statement.
personal balance sheet.
liquidity statement.
Question 16

Gross monthly income = $3,500
After-tax monthly income = $2,870
Total debt = $86,000
Total monthly debt payments = $402
Total assets = $113,000
Based on the information given above, what is the debt ratio?
3%
131%
47%

76%
Question 17
You can afford to make monthly payments of a certain amount for three
years, and you want to know how much you can borrow based on this
payment amount. Which type of time value of money calculation should
be used to solve this problem?
future value of a lump sum

present value of an annuity
future value of an annuity
present value of a lump sum
Question 18
A personal cash flow statement

shows income and expenditures over a period of time.
uses the same information needed for the personal balance sheet.
shows income and expenditures at one specific point in time.
is necessary for calculating one’s net worth.
Question 19
You estimate your monthly mortgage principal and interest will be
$1,000, property taxes will be $160 per month, and homeowner’s
insurance will be $50 per month. If your gross monthly income is $4,000
per month and your tax rate is 20 percent, what is your mortgage debt
service ratio?

65.2%
60.5%
30.25%
37.8%
Question 20

You expect to receive a sum of money 10 years from now, and you want
to know how much it is worth today. Which time value of money
calculation should be used to solve this problem?
future value of an annuity
present value of a lump sum
present value of an annuity
future value of a lump sum
Question 21

You plan to invest $2,000 every year (end-of-year payments) from now
until you retire in 30 years. If you can earn 7% annually on your
invested funds, how much will you have when you retire?
$15,225
$25,081
$188,922
$204,146

Question 22
In order to determine how much you would need to save yearly in order
to finance your child’s college education in 10 years, you would use
future value.
future value of an annuity.
present value.
present value of an annuity.

Question 23
Which of the following is true regarding future value?
the higher the interest rate, the lower the future value
the longer the term, the lower the future value
the shorter the term, the higher the future value

the lower the interest rate, the lower the future value
Question 24
Your assets total $100,000.Your total debts are $80,000. Your net worth
is
0.8.
$180,000.

$20,000.
1.2.
Question 25
You are considering two amortized loans with the same interest rate and
the same initial amount borrowed. If the number of months to repay
Loan X is greater than the number of months to repay Loan Y, the
monthly payment on Loan X will be _____ than the payment on Loan Y.
higher

lower
**************************************************
this week’s readings, activities, and assignments. To help you prepare, it
Complete the Week 2 WileyPLUS Weekly Exam covering this week’s
assigned readings:
• “Chapter 3: Budgeting and Cash Management”

• “Chapter 4: Tax Planning”
Question 1
If you write a check or use your debit card when there isn’t enough
money in your account to cover the payment, this is known as
being unbanked.
skimming.
a stop payment.
an overdraft.
Question 2
Simone spent an average of $500 each month on groceries last year for
herself and her family. She is now forecasting the family budget for next
year. She read that an inflation rate of 5% is expected. How much should
Simone budget for the monthly food expense next year?
$500
$475

$525
$750
Question 3
One approach to forecasting variable expenses is to
use a wide range of estimates.
assign probabilities to different outcomes.
increase them by the expected inflation rate.
keep them constant.
Question 4
Which of the following is (are) good reasons for tracking budget
variances?
to ensure that large, irregular cash expenses do not cause financial
hardship.
to determine the largest categories of expenditures for future reductions.
to identify small cash leakages before a major shortfall.
all of the choices are good reasons to track budget variances.
Question 5

Which of the following types of accounts is not insured for $250,000 by
the Federal Deposit Insurance Corporation (FDIC)?
savings account at a commercial bank
money market mutual fund offered by an insurance company
checking account at an online bank
savings account at a savings and loan association
Question 6
A money market mutual fund is a mutual fund that invests in
stocks of the 500 largest companies in the United States.
investment quality corporate bonds.
short-term, low risk financial assets such as short-term government
bonds.
long-term certificates of deposit.
Question 7
Janice’s monthly expenses are $6,000, and she has $10,000 in checking
and savings. Which of the following is true about her financial situation?

Janice has too much in liquid assets.
Janice should consider investing her $10,000 in a stock mutual fund to
generate higher returns on her investment.
Janice needs to try to reduce her spending.
Janice needs to increase her emergency fund.
Question 8
The steps in the budgeting process are forecasting cash flows,
__________,monitoring, and reevaluating over time.
implementing
adjusting
negotiating
selecting
Question 9
Which of the following pays interest that is exempt from state and local
taxation?
certificate of deposit
NOW account
series EE bond

inflation.
Question 10
Compared with time deposits, demand deposits
place a greater limit on the number of checks you can write each month.
require you to leave the funds on deposit for a longer period of time.
allow you to withdraw money at any time.
pay higher rates of interest.
Question 11
A savings account that pays a stated rate of interest if you agree to leave
your money on deposit for a certain period of time is known as a
mutual fund.
series EE fund.
certificate of deposit.
money market account.
Question 12

A depository institution differs from a nondepository institution in that it
gets its funds from
investors.
customer deposits.
loans.
the FDIC.
Question 13
Matthew is 16 years old and can be claimed as a dependent by his
parents. He received $1,500 in dividends and $650 in interest and earned
$4,800 from odd jobs during the year. Will Matthew need to file a
separate tax return? Why?
Yes. His unearned income exceeds the maximum limit.
No. His unearned income and gross income do not exceed the maximum
limits.
No. His gross income does not exceed the maximum limit.
Yes. His earned income exceeds the maximum limit.
Question 14
Which of the following tax forms is known as the long form?
1040B

1040
1040X
1040A
Question 15
Reimbursement accounts for qualified medical and child care expenses
are known as
deferred compensation plans.
flexible spending accounts.
option plans.
cafeteria plans.
Question 16
Which of the following types of taxes paid is not an allowable itemized
deduction?
use taxes
state income taxes
property taxes on your primary residence
personal property taxes

Question 17
The U.S. income tax is considered
transgressive.
illegal.
regressive.
progressive.
Question 18
Lee earned a salary of $25,000 from his job as a server last year. In
addition, he earned $12,500 in tips, $135 in interest income, and $200 in
dividend income from investments. What was Lee’s total income last
year?
$25,335
$25,000
$37,500
$37,835
Question 19

Which of the following filing status categories receives the largest
standard deduction?
head of household
married filing separately
married filing jointly
single and 65 or older
Question 20
Which of the following tax credits best applies to a low-income family
with two children?
retirement savings contribution credit
American Opportunity credit
lifetime learning credit
child tax credit
Question 21
A progressive tax is one in which
you pay more if you earn more.
you pay less if you earn more.

you pay the same regardless of earnings.
taxes are used for progressive services.
Question 22
Which of the following tax credits best applies to a low-income person
contributing to an IRA?
child tax credit
American Opportunity credit
retirement savings contribution credit
lifetime learning credit
Question 23
Your average tax rate will always be _______ your marginal rate.
more than
the difference between your taxable income and
less than or equal to
the same as
Question 24

Which of the following must be included in total income on federal
income tax returns?
insurance claim payments
tips and bonuses
worker’s compensation benefits
child support received
Question 25
Your answer is incorrect.
The dollar amount per qualifying household member that is subtracted
from adjusted gross income is known as
a reduction.
a tax credit.
a deduction.
an exemption.
**************************************************

this weeks’ readings, activities, and assignments. To help you prepare, it
Complete the Week 3 WileyPLUS Weekly Exam covering this week’s
assigned readings:
“Chapter 5: Managing Credit: Credit Cards and Consumer Loans”
“Chapter 6: Making Automobile and Housing Decisions”
Question 1

In calculating the annual percentage rate on a credit card account, the
total annual finance charges includes interest and
late payment charges
all fees and charges assessed on the account
mandatory annual fee
overlimit charges

Question 2
The purpose of an amortization table is to
estimate the average monthly balance
calculate monthly payments on a mortgage
show the breakdown of monthly payments into interest paid on the
outstanding balance and principal repayment over the life of a loan
identify when the loan will be paid in full
Question 3

The legal document that specifies the terms and conditions of a
consumer loan is the
trust agreement
lien
promissory note
judgement

Question 4
When real property is used as collateral to secure a loan, the lender
records a __________ against the property.
deed
mortgage
judgement
lien

Question 5
In assessing a person’s creditworthiness using the Five Cs of Credit,
which of the following is applicable in the category of “capacity”?
the income of the person applying for credit
the value of the asset that will secure the loan
the amount of other debt the applicant already owes

the credit score of the person applying for credit
Question 6
Which type of bankruptcy requires the liquidation of most of your
assets?
Chapter 13
Chapter 5

Chapter 7
Chapter 11
Question 7
Which of the following statements is true concerning home equity
loans?
Home equity loans cannot be used to pay for college costs.

Home equity loan proceeds are generally restricted as to purpose.
Home equity loans are generally installment loans with a 1-5 year term.
Home equity loan interest is tax-deductible up to a maximum of
$100,000.
Question 8
Payday lenders are controversial because they

charge very high rates of interest.
make it easier for undocumented workers to stay in the job market.
are in competition with traditional lenders.
allow people cash their paychecks even when they do not have a bank
account.
Question 9
Which of the following statements concerning the add-on interest
method is true?

The lender subtracts the interest due from the principal before the
borrower receives the loan proceeds.
It results in a lower APR than the simple interest method.
It usually results in a higher APR than the discount interest method.
Interest is added to the amount borrowed before the payments are
calculated.
Question 10

Which of the following is not one of the situations that can defer student
loan payments?
Peace Corps service
Change in citizenship
Postsecondary study
Economic hardship
Question 11

When lenders evaluate your sources of income and your expenses, they
are considering your
Capacity
Capital
Collateral
Character

Question 12
When real property is used as collateral to secure a loan, the lender
records a __________ against the property.
mortgage
lien
deed
judgement

Question 13
The method most commonly used by financial institutions to determine
finance charges on consumer loans is the
discount interest method
compound interest method
simple interest method

add-on interest method
Question 14
Michael is considering getting a closed-end lease on a car for 48 months.
The car dealer quotes him a monthly payment of $349. If Michael were
to buy the car with the same down payment, his monthly payment would
be $465 a month. Michael’s lease payment is lower because
car dealers make a lower profit on leased cars.

leased cars do not come with a manufacturer’s warranty.
he is not paying for the residual value of the car at the end of four years.
he is paying finance charges only on the amount of the car that will be
depreciated over four years.
Question 15
Which of the following is a mortgage loan that has a fixed rate, a fixed
term, and fixed payments?

growing equity mortgage
conventional mortgage
reverse annuity mortgage
ARM
Question 16
Which of the following statements is true of adjustable-rate mortgages?
There is no limit as the amount of payment change on an ARM.

The interest rate changes on ARMs are limited per year and per lifetime.
They generally carry higher initial interest rates than conventional
mortgages.
They cannot be converted to fixed-rate loans.
Question 17
When considering spending on housing needs, if a person is heavily
immersed in credit card debt,

it would be a good idea to save money by cutting on housing
expenditures and paying down credit card debt first.
credit card debt and housing needs are separate and should not be
interlinked.
the individual should continue to borrow against credit cards to maintain
a roof over their head.
the person should first satisfy housing needs and then focus on paying
down credit card debt.
Question 18

Gross capitalized cost in an automobile lease is equivalent to
___________ in a new car purchase.
depreciation
a down payment
a finance charge
a negotiated purchase price
Question 19

An account held by the mortgage lender and used to cover property
taxes and homeowner’s insurance is known as a(n):
assessed account.
reserve account.
tax account.
escrow account.

Question 20
Mike is applying for a home loan and wants to buy a house worth
$150,000 in a neighborhood close to his work. However, he only has
$15,000 toward the down payment. Mike may be required by the lender
to
buy a cheaper house further away from his work.
get a cosigner to the loan.
wait a few years before he can save a 20% down payment.
carry mortgage insurance and pay the premium.

Question 21
Which of the following is a variable operating expense of an
automobile?
taxes
insurance premiums
finance charges

toll fees
Question 22
In a home purchase, what are discount points?
A reduction in the annual interest rate of the mortgage loan because the
buyer made a higher-than-required down payment.

Interest paid up front to the lender in return for a reduced monthly
mortgage payment.
Interest paid up front by the buyer to the lender in return for a reduced
annual interest rate.
A reduction in the closing costs due to the fact the buyer put up a large
amount of earnest money.
Question 23
An interest rate cap is likely to be associated with a(n) ________
mortgage.

adjustable rate
fixed rate
balloon
growing equity
Question 24
If all else is equal, which of the following is LEAST likely to increase
the price of the house you can afford to buy?
increasing mortgage rates

longer mortgage term
improvement in your credit rating
increase in your gross monthly salary
________________________________________
Question 25
Closing costs on the purchase of a house

reduce the amount of cash available for the down payment.
increase the amount of cash available for the down payment.
increase the mortgage insurance premium.
are paid by the lender.
**************************************************

this week’s readings, activities, and assignments. To help you prepare, it
“Chapter 10: Saving for Distant Goals: Retirement and Education
Funding”
“Chapter 11: The Fundamentals of Investing”
Question 1
Which of the following is NOT an income-driven repayment plan for
federal student loans?
Income-based repayment
Pay as you Earn plan

Income deferment plan
Income-contingent plan
Question 2
If you are not working, you can apply with your loan servicer for which
of the following to postpone monthly payments.
Forgiveness
Unemployment

Payment reduction
Deferment
Question 3
What type of loan starts accruing interest at the time of disbursement?
Subsidized
Pell
Unsubsidized

All federal loans
Question 4
Which of the following is the recommended guideline for the maximum
amount to borrow in order to keep your monthly payments manageable?
Average salary for your chosen job
No more than household income

Average starting salary for your chosen job
Average starting salary for your chosen job times 1.25
Question 5
The American Opportunity tax credit is a tax credit up to a maximum of
$500 for every eligible dependent who has incurred college expenses
during the year.

$2,500 for every eligible dependent who has incurred college expenses
during the year.
$2,000 per year for eligible college expenses incurred during a child’s
first two years of college.
$1,500 per year for eligible expenses incurred during a child’s first two
years of college.
Question 6

________ are subject to regulations that resemble those of defined
contribution plans offered by employers.
Traditional IRAs
Roth IRAs
Taxable accounts
Annuities

Question 7
When comparing penalties for non qualified withdrawals on the
Coverdell Education Savings Account and the two Section 529 plans,
which of the following has/have a penalty of earnings subject to income
tax plus a 10% penalty?
All three plans
Coverdell Education Savings Account

Section 529 Prepaid Tuition plan
Section 529 Savings plan
Question 8
Which of the three government college savings programs does not tax
growth or qualified withdrawals?

Section 529 Prepaid Tuition plan
Section 529 Savings plan
Coverdell Education Savings Account
All of the choices are correct.
Question 9

Carla and Ben have been married for 50 years. During that time, Carla
stayed home raising their children and maintaining their household while
Ben worked for an engineering firm. When they reach retirement age,
together Ben and Carla are eligible to receive
150% of Ben’s Social Security benefits.
half of Ben’s Social Security benefits.
only Ben’s Social Security benefits.
200% of Ben’s Social Security benefits.

Question 10
The Lifetime Learning tax credit is a credit of
30 percent of the first $5,000 of college expenses up to a maximum of
$1,500 for every eligible dependent who has incurred these expenses
during the year.

during the first two years of college.
during the first two years of college.
20 percent of the first $10,000 of tuition and fees up to a maximum of
during the year.
Question 11
In order to estimate your retirement income shortfall in the first year of
retirement, you need to subtract your expected income from employer
DB retirement plans from your before-tax income need in your first year
of retirement, and then ________ expected Social Security benefits.

subtract
add
multiply by
divide by
Question 12

Marnie and John have a joint and survivor annuity. This means that
the annuity pays a benefit until the second spouse dies.
the annuity pays a double benefit for their entire lives.
the annuity pays a benefit until the first spouse dies.

only the beneficiaries receive a benefit after both Marnie and John die.
Question 13
If Jack Miller were to underestimate the effects of inflation on his
retirement income, his standard of living in retirement could
consistently__________ as he gets older.
increase

decline
stay the same
improve
Question 14
Evan works for an employer that does not provide a retirement plan as a
benefit. He earns $175,000 per year. He plans to fund his own retirement
account through his local bank. Which of the following would BEST
suit Evan?

A traditional IRA
A Roth IRA
A taxable account
An annuity
Question 15
The minimum rate of return is usually called the

nominal risk-free rate.
nominal inflation rate.
expected rate of return.
expected required return.
Question 16
Reinvestment risk is greatest for

short-term debt securities.
long-term debt securities.
bonds.
common stock.
Question 17

A bear market occurs when
the market is generally rising.
the market is generally declining.
the market is very volatile.
the market is fairly stagnant.
Question 18

Portfolio diversification in the real world can be employed to
reduce risk of a portfolio up to a point.
eliminate the risk of a portfolio completely.
primarily increase the return of a portfolio.
primarily reduce the return of a portfolio.
Question 19

________ is a type of investing strategy in which you purchase a
collection of bonds with different maturities spread out over your
investment horizon.
Laddering
Buy-and-hold
Indexing
DRIP

Question 20
In order to assess the performance of a diversified mutual fund invested
in stocks, one would use the ________ because it is a broad benchmark.
S&P 500
Dow Jones Industrial Average
NASDAQ Composite Index

Lehman Brothers US Treasury Index
Question 21
A major advantage of a buy-and-hold strategy is
greater expected return.
buying securities at their lowest price.
lower transaction costs.
lower default risk.

Question 22
If you purchase $100 of stock every month, you are practicing
market timing.
dollar cost averaging.
asset allocation.
diversification.
Question 23

The statement “Don’t put all your eggs in one basket” is recommending
active investing.
market timing.
diversification.
portfolio management.

Question 24
Dollar cost averaging will result in
a smaller return than a buy-and-hold strategy if prices are rising.
a lower average purchase price than the average price over the long
term.
a higher average purchase price than the average price over the long
term.
a greater return than a buy-and-hold strategy if prices are rising.

Question 25
Which of the following is not one of the strategies for successful
investing?
Do your homework.
Hire a full-service broker to make your investment decisions.
Keep accurate records.

Understand and take advantage of tax rules.
**************************************************
In this graded assignment you are assessed on the content covered in this
weeks’ readings, activities, and assignments. To help you prepare, it is
recommended that you first complete this week’s Learning Path and

• “Chapter 12: Investing in Stocks and Bonds”
• “Chapter 13: Investing in Mutual Funds and Real Estate”
Question 1
A share of noncallable preferred stock has a par value of $100 and pays
7 percent annual interest. Which of the following statements is true?
The stock will pay $7 per year in interest as long as the company is in
existence.
The stock will pay $7 in interest in the first year, but the amount paid in
future years will depend on what happens to interest rates in the future.
The stock will pay $100 per year in interest for 20 years.
The stock will pay $7 per year in interest and will pay the investors back
the $100 par value at maturity.
Question 2
Which of the following statements regarding bonds and inflation risk is
true?
Rising inflation will generally cause bond prices to also rise.
Bonds are less influenced by inflation risk than are common stocks.

Long-term bonds have less inflation risk than short-term bonds.
Bond investors will require higher yields on bonds if inflation rises.
Question 3
Aeryn Soon is a potential investor of Hippy Dippy Inc.’s preferred stock,
which is currently selling for $475 per share. Hippy Dippy pays an
annual dividend of $40, and Aeryn’s required return is 8 percent. Should
she purchase this preferred stock or NOT? Why?
Yes, because the value of the preferred stock is $500.
No, because the value of the preferred stock is $250.
Yes, because the value of the preferred stock is $250.
No, because the value of the preferred stock is $500.
Question 4
Yield to maturity is a popular measure because it tells an investor
the annualized yield they will earn if they hold the bond to maturity.
the yield they will earn if they sell the bond today.
how much interest they will receive each year.
none of the above.
Question 5

Riskier companies tend to pay ________ dividends than less risky
companies.
higher
lower
Question 6
Aliyah purchased Verizon Communications stock in April 2015 for
$48.90 per share. She sold the stock one-year later for $54.01 per share.
Calculate her capital gains yield.
5.11%
9%
9.46%
10.45%
Question 7
A bond investor is a/ an
creditor.
lender and creditor.
lender.

owner.
Question 8
Large-cap companies have market capitalization greater than or equal to
$10 million.
$1 billion.
$5 billion.
$100 million.
Question 9
When a stock split occurs,
owners of stock end up with a lower proportionate number of shares.
the company expects the value of shares to go down in the future.
the price of new shares is lower than the old price.
the market usually views the split as bad news about future prospects for
the company.
Question 10

Which of the following portfolio strategies is the most risky?
Investing 100 percent in a small-cap technology company
Investing 50 percent each in a small-cap technology company and a blue
chip manufacturing company
Investing 100 percent in a blue chip manufacturing company
Investing equally in 20 stocks that are all in different industries
Question 11
John is considering purchasing some preferred stock from BBCC Corp.
The company pays a $30 annual dividend on its preferred stock, and
John believes he should earn 7 percent on the stock based on the
company’s risk profile. What is the value of the stock per share?
$428.57
$42.86
$2.10
$210.00
Question 12
The most common arrangement for bond coupon payments is
fixed-rate interest paid in semiannual payments.
floating-rate interest paid in annual payments.

zero-coupon payments.
indexed-rate payments.
Question 13
Which statement regarding load mutual funds is true?
The most common type of load is a front-end load.
The load can be as high as 10 percent of the purchase price of the shares.
A back-end load is part of the expense ratio.
Load funds make more sense for active investors than buy-and-hold
investors.
Question 14
The basic equation for real estate return on investment is the increase in
value plus the net rental income, minus the interest expense, all of which
is divided by which financial component?
beginning investment
capital appreciation
ending outlay
market price

Question 15
A life-cycle fund purchases assets designed to meet the needs of
individuals in
retirement only.
middle-income earning years.
a particular stage of life.
high-income-earning years.
Question 16
Financing the purchase of an investment in real estate with a mortgage at
the time of borrowing at a low rate of interest and investing in assets that
earn more than what they cost puts you ahead of the game due to the
concept of
leverage.
diversification.
return on investment.
price appreciation.
Question 17

Which fund classification would a focus on only stocks of Chinese
companies match?
Growth fund
Income fund
Balanced fund
International fund
Question 18
Maryanne invested $1,000 in a mutual fund three weeks ago and noticed
she was charged $85 for the purchase. Which kind of fund did she likely
buy?
a front-end load fund
a back-end load fund
a no-load fund
an initial load fund
Question 19
Which fund classification would a focus on assets that pay interest
and/or dividends match?
Growth fund

Income fund
Balanced fund
Global fund
Question 20
Most open-end mutual funds charge a front-end load, which is
a sales charge or commission paid by investors each year that they own
shares in the fund.
a brokerage fee that is paid to a broker for selling mutual funds in the
secondary market for an investor.
the annual expenses on the fund divided by the net asset value.
a sales charge or commission paid by an investor when purchasing
shares in a mutual fund.
Question 21
ABC Fund has 9 million shares outstanding. The fund’s portfolio is now
valued at $300 million and the fund owes $18 million to the fund
advisors and $5 million for rent and wages. What is the net asset value
of the fund?
$30.78

$31.33
$33.00
$34.78
Question 22
Which is a characteristic of an exchange-traded fund (ETF)?
Shares are traded in the secondary market like shares in a closed-end
fund.
Shares trade at the net asset value like shares in an open-end fund.
The number of shares outstanding is fixed as in a closed-end fund.
The shares are invested only in common stock of publicly traded
corporations.
Question 23
Another term for back-end load is
distribution load.
contingent deferred sales charge.
management load.
operational load.

Question 24
When a mutual fund assesses a charge at the time of a purchase it is
called a(n) ________load.
front-end
back-end
redemption
initial
Question 25
If a firm has total expenses of $1 million and total assets of $20 million,
what would the expense ratio be?
0.05 percent
0.5 percent
5 percent
50 percent
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FP 100T Week 1-5 All Wileyplus Exams
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FP 100 T Enhance teaching / snaptutorial.com

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