Practice Exam Answers

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4

Which component is a primary part of a mortgage?

A
principal amount
B
electricity bill
C
car insurance premium
D
monthly grocery expenses
6

Breanna has the opportunity to switch to a four-day workweek, but this comes with a 20% salary cut. Given that her current monthly salary of $5,000 exactly matches her monthly expenses, how much would her new salary be, and what would be the best course of action for her considering her financial situation?

A
Accept the four-day workweek, earning a new salary of $4,000, which results in a monthly deficit of $1,000.
B
Accept the four-day workweek, earning a new salary of $6,000, which results in a monthly increase of $1,000.
C
Decline the four-day workweek offer, maintaining her current salary of $5,000 and ensuring her expenses are covered.
D
Both situations result in the same net income.
9

Drag each statement into the appropriate category based on whether it applies to homeownership or renting.

Answer:

pays property taxes,builds equity through property appreciation,handles all maintenance and repairs|can relocate easily at end of lease,requires security deposit and first month's rent

14

What could Chance do to adjust the budget after receiving an unexpected bill for home repairs?

A
continue spending as usual without any changes
B
cut back on discretionary expenses like entertainment
C
ignore the bill until the next month
D
increase spending on nonessential items
16

Adam's employer offers a reimbursement program for tuition expenses. Adam received $⁢3,000 in reimbursement for graduate school tuition. Can Adam still claim the lifetime learning credit?

A
Yes, Adam can claim the full amount.
B
Yes, but he can only on expenses not reimbursed.
C
No, because Adam received a reimbursement.
D
No, because it is a graduate program.
18

Which potential advantage applies to leasing a car but not to buying it?

A
typically lower monthly payments and a warranty throughout the lease term
B
the ability to sell the car for profit at the end of the lease
C
having ownership of the car after the lease ends
D
customizing the car with any modifications desired

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Practice Exam Answers — Advanced Financial…