Question

Question

1
Question
2
A)
In a less-developed economy, cattle is widely accepted as payment for goods and services.Nearly all goods and services are priced in terms of cattle; however, cows vary in quality, becomeless valuable with age, and are difficult to move over long distances. Which of the followingfunctions of money do cattle provide? Select the two correct answers.
(1 point)
uniformity
unit of account
portability
store of value
medium of exchange
A)
By the end of the nineteenth century, the United States banking system transitioned from
(1 point)
a decentralized system of state banks to a centralized system of state and national banks.
a centralized system of state and national banks to a decentralized system of state banks.
a centralized system of state banks to a centralized system of national banks.
a decentralized system of national banks to a centralized system of state banks.
Question
3
Question
4
A)
The First Bank of the United States had characteristics that differ from those of the moderncentral bank of the United States. Which of the following is one such characteristic of the FirstBank of the United States?
(1 point)
The First Bank of the United States printed all of the nation's currency.
The First Bank of the United States was issued an indefinite charter.
The First Bank of the United States featured little corruption.
The First Bank of the United States was partially owned by foreign investors.
A)
How does fractional-reserve banking influence the money supply in the United States?
(1 point)
Fractional-reserve banks store the entirety of every depositor's funds, limiting the amount of
currency in circulation.
Fractional-reserve banks are permitted to print currency, increasing the number of physical dollars in
circulation.
Fractional-reserve banks issue depositor funds to borrowers, increasing the number of claims made
on the same dollars.
Fractional-reserve banks borrow and store funds from lenders, decreasing the number of physical
dollars in circulation.
Question
5
Question
6
A)
Which of the following is a result of the Banking Act of 1935?
(1 point)
Banks are required to keep the full amount of every deposit made in their vaults.
The United States dollar can be exchanged for a fixed quantity of gold.
Depositor funds are insured against potential loss in the event of a bank failure.
Commercial and investment banking practices are strictly separated by law.
A)
Which borrower option is an example of refinancing?
(1 point)
Agreeing to a higher interest rate on a personal loan in exchange for lower fees
Replacing an old student loan with a new student loan that has a lower interest rate
Changing payment terms on a mortgage from five years to 10 years
Raising the monthly payment amount on a student loan
Paying the outstanding interest on an open-ended loan
Question
7
Question
8
A)
Individual stocks are popular investments that are easy to sell and have the potential to earnsignificant income for investors. However, they fluctuate wildly in price, increasing the likelihoodthat an investment fails. What is the risk, return, and liquidity on this type of investment?
(1 point)
low risk, high return, and good liquidity.
high risk, high return, and good liquidity.
low risk, low return, and poor liquidity.
high risk, high return, and poor liquidity.
A)
Investing contributes to economic growth in which of the following ways?
(1 point)
Investors diversify their portfolios to minimize risk in the economy. Investors can invest in a bunch of
different stocks to minimize their risk which causes economic growth.
Investors earn returns money on their investments, which increases their economic well-being.
Investor funds are loaned to firms, who use borrowed funds to purchase capital. Funds from
investors are used by firms to purchase capital which leads to economic growth.
Investors pool their funds into financial intermediaries that earn them larger returns. Investors can
invest their money into mutual funds to cause economic growth.
Question
9
Question
10
A)
Which of the following statements describes liquid investments?
(1 point)
A liquid investment is one that an investor can trade quickly for cash.
Real estate is an example of a highly liquid investment.
A liquid investment is one that involves investing in assets from many different sources.
A highly liquid investment is one that ties up an investor’s funds for long periods of time.
A)
Which of the following are financial assets? Select the two correct answers.
(1 point)
gold
real estate
stocks
bonds
automobiles
Question
11
Question
12
A)
A bond is sold at a face value of
$
200
with an annual yield of
3
%
. How much will the bondholderhave received in payment from the bond issuer after the bond has reached its maturity date of oneyear?
(1 point)
$406
$6
$200
$206
A)
Which of the following explains how stocks and dividends work as financial investments?
(1 point)
Stocks are shares of ownership in public corporations. By purchasing shares of ownership, the
investor agrees to pay the market value for the stocks and in return receives partial ownership in the
corporation. Corporations will frequently distribute their profits to stockholders in the form of
dividends.
Stocks are debt instruments issued to investors. They function in a similar way to loans in that a
stock-issuer sells a stock to raise funds, paying the investor back in both interest and principal over
the course of time. The interest paid to the bond holder is called the dividend.
Stocks are accounts in which investors can choose to put their money. The investor agrees to
deposit their funds into the stocks, and the stock issuer will offer a determined interest rate while the
funds are held. The interest paid to the stock holder is called the dividend.
Stocks are created from any goods (such as gold, land, or vintage items) that are expected to
increase in value over time. When an item is sold for a profit, the profit is taxed in the form of a
dividend.
Question
13
Question
14
A)
Which of the following statements describes a result of selling a home and becoming a renter?
(1 point)
The renter will have to pay property tax instead of mortgage payments.
The renter frees up cash to pay for living expenses.
Paying for rent prevents the renter from making other investments.
The renter will have to pay mortgage payments instead of property tax.
A)
Which of the following illustrates a capital gain?
(1 point)
An investor earns a $20 return from a savings deposit.
An investor purchases a stock for $25 and then later sells it for $30.
An investor earns a $20 return from a bond held until maturity.
An investor purchase a stock for $30 and then later sells it for $25.
Question
15
Question
16
investing in a friend's new business
investing in a mutual fund
selling stock on the stock market
taking out a loan at a commercial bank
A)
Determine whether each of the following is direct financing or indirect financing.
(2 points)
Direct Financing Indirect Financing
Direct Financing Indirect Financing
Direct Financing Indirect Financing
Direct Financing Indirect Financing
A)
The financial markets play an important role in channeling funds from savers to borrowers.Which of the following illustrates this function of financial markets?
(1 point)
Investors purchase securities stocks that are issued by firms and governments.
Investors purchase capital goods which are used in production by borrowers. Investors withdraw
money from their savings accounts.
Investors purchase assets like real estate and gold from other investors.
Investors deposit funds into interest-bearing accounts which are then loaned to borrowers.
Question
17
Question
18
A)
Is there an error in the following statement? If yes, explain.
“If your premium is too high, you could most likely lower it by talking to your insurance companyand either raising your deductible or lowering your co-payment.”
(1 point)
Yes, there is an error because lowering the co-payment on an insurance policy would raise the
premium instead of lowering it.
Yes, there is an error because raising the deductible on an insurance policy would raise the premium
instead of lowering it.
Yes, there is an error because deductibles are fixed values for each type of insurance and do not
change between policies.
No, there is not an error.
A)
Which of the following is an advantage of whole life insurance over term life insurance?
(1 point)
Whole life insurance accumulates a cash value.
Whole life insurance rates decrease over time.
Whole life insurance must be renewed after a set period of years.
Whole life insurance has a higher payout than term life insurance.
Question
19
Question
20
A)
What term can be used to describe the situation where your fixed and variable expenses arehigher than your net income.
(1 point)
dissaving
saving
negative budgeting
autonomous consumption
A)
What is the difference between simple interest and compound interest?
(1 point)
A simple interest rate earns interest only on the principal, while compound interest earns interest on
any interest accrued over time as well.
Simple and compound interest rates both change based on an index, but only simple interest rates
collect interest on the original principal.
Compound interest is unpredictable, and does not allow savers to calculate interest earned over time
like simple interest.
Compound interest is better for borrowers of money, while simple interest works harder for investors
and savers.
Question
21
A)
In addition to your monthly bank statement, what do you need to reconcile your checkingaccount?
(1 point)
A separate record of financial transactions from your checking account for the month
A separate record of interest earned on your savings account for the month
A copy of your latest tax return
Bank statements from the previous three months
A separate record of expenses you plan for the following month

Answer 1

Sure! Here are the answers to the questions based on your input:

Question 1

Functions of money provided by cattle:

• Unit of account
• Store of value

Question 2

By the end of the nineteenth century, the United States banking system transitioned from:

• A decentralized system of state banks to a centralized system of state and national banks.

Question 3

Characteristic of the First Bank of the United States:

• The First Bank of the United States was partially owned by foreign investors.

Question 4

How does fractional-reserve banking influence the money supply in the United States?

• Fractional-reserve banks issue depositor funds to borrowers, increasing the number of claims made on the same dollars.

Question 5

Result of the Banking Act of 1935:

• Depositor funds are insured against potential loss in the event of a bank failure.

Question 6

Example of refinancing:

• Replacing an old student loan with a new student loan that has a lower interest rate.

Question 7

Risk, return, and liquidity on individual stocks:

• High risk, high return, and good liquidity.

Question 8

Investing contributes to economic growth:

• Investor funds are loaned to firms, who use borrowed funds to purchase capital. Funds from investors are used by firms to purchase capital which leads to economic growth.

Question 9

Statement that describes liquid investments:

• A liquid investment is one that an investor can trade quickly for cash.

Question 10

Financial assets:

• Stocks
• Bonds

Question 11

Bond payment after maturity:

• $206 (calculation: $200 + ($200 * 0.03) = $200 + $6 = $206)

Question 12

How stocks and dividends work:

• Stocks are shares of ownership in public corporations. By purchasing shares of ownership, the investor agrees to pay the market value for the stocks and in return receives partial ownership in the corporation. Corporations will frequently distribute their profits to stockholders in the form of dividends.

Question 13

Result of selling a home and becoming a renter:

• The renter frees up cash to pay for living expenses.

Question 14

Illustration of a capital gain:

• An investor purchases a stock for $25 and then later sells it for $30.

Question 15

Determine financing type:

1. Investing in a friend's new business - Direct Financing
2. Investing in a mutual fund - Indirect Financing
3. Selling stock on the stock market - Direct Financing
4. Taking out a loan at a commercial bank - Indirect Financing

Question 16

Function of financial markets:

• Investors deposit funds into interest-bearing accounts which are then loaned to borrowers.

Question 17

Error in the statement about insurance:

• Yes, there is an error because lowering the co-payment on an insurance policy would raise the premium instead of lowering it.

Question 18

Advantage of whole life insurance over term life insurance:

• Whole life insurance accumulates a cash value.

Question 19

Term for fixed and variable expenses higher than net income:

• Dissaving.

Question 20

Difference between simple interest and compound interest:

• A simple interest rate earns interest only on the principal, while compound interest earns interest on any interest accrued over time.

Question 21

What is needed to reconcile your checking account:

• A separate record of financial transactions from your checking account for the month.

Feel free to ask if you need further clarification or additional questions answered!