AnswersOK-Personal Financial Literacy S1 – EDGNTY-83861 26-27Principles of Investment

Principles of Investment — Unit test Answers

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1
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Which of these qualify as variable expenses? Choose three answers.clothing purchasesloan paymentmonthly groceriesapartment rentmedical bills

A
clothing purchases
B
loan payment
C
monthly groceries
D
apartment rent
E
medical bills
2
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When applying for credit, what information should borrowers research? Check all that apply.feesgovernment regulationsinterest ratesintroductory ratesrequired repayments

f
fees
g
government regulations
i
interest rates
i
introductory rates
r
required repayments
3

Which two factors have the greatest influence on risk for an investment? the demand for the investmentthe duration of the investmentthe history of the investmentthe importance of the investmentthe need for the investment

A
the demand for the investment
B
the duration of the investment
C
the history of the investment
D
the importance of the investment
E
the need for the investment
4

What is the definition of gross income?

A
amount of income saved per year
B
amount earned before deductions
C
amount of tax deducted from income
D
amount received after deductions
5

The chart shows facts related to professional interpreters.

Question illustration
e
earned a degree from a four-year college at least.
r
received on-the-job training for several weeks only.
r
received on-the-job training for several months only.
e
earned technical training from a vocational school.
6

Through the successful study of personal finance, an individual will be

b
better prepared to calculate financial risks
a
able to spend available assets.
f
faced with long-term challenges.
m
more likely to avoid high opportunity costs.
7

Emma has decided that she needs to assess the risk and return of buying an extended warranty for her new laptop for school. Which of these practical questions should she ask herself to assess the risk? Select three options.Will the warranty cover the cost of any physical damage?Should I buy a different model?Would it be better for me to buy a desktop computer?Is the cost of replacement less than the cost of the warranty?Is the laptop worth the extra expense of the warranty?

A
Will the warranty cover the cost of any physical damage?
B
Should I buy a different model?
C
Would it be better for me to buy a desktop computer?
D
Is the cost of replacement less than the cost of the warranty?
E
Is the laptop worth the extra expense of the warranty?
8

These lists outline the details of two jobs.

Question illustration
f
family needs
j
job location
p
personal life
a
annual wages
9

What term is used to describe an individual's money and personal property?

A
budget
B
income
C
assets
D
finances
10

The best reason to record income at the top of a budget is

A
to easily add expenses to it.
B
to know how much money is available.
C
to avoid spending too much money.
D
to see that is is more important than expenses.
11

When the economy grows, the market grows, most likely because

A
more investors are willing to take risks.
B
the government has decreased spending.
C
the government has increased taxation.
D
investors have a greater desire for profits.
12

If a borrower provides collateral and fails to repay the loan,

A
the borrower may cancel the loan to get the collateral.
B
the lender can sell the collateral to cover losses.
C
the borrower must buy the collateral back.
D
the lender keeps the collateral in case of late payment.
13

grossdiscretionarynet

A
gross
B
discretionary
C
net
14

One advantage to buying a CD is that it

A
can be purchased for different amounts.
B
is high risk but comes with great rewards.
C
can be used for long-term retirement.
D
is high risk but backed by the government.
15

What is one way employers get employees to participate in a 401k?

A
by requiring them to participate unless they opt out
B
by requiring them to opt in if they want to participate
C
by giving them an annual pay raise
D
by giving them a signing bonus when they participate

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