CAN SOMEONE HELP ME PLS!!
PERSONAL FINANCE EXAM Unit 18 Lesson 2
Kris is a salesperson for IBM. He makes a base salary of $80,000 per year plus 4% of net sales. He is paid bi-weekly, and commission is paid when the sale is billed. This period, they billed a $25,000 sale. Kris has also made another $25,000 sale but it was not billed until the day after the close of the pay period. What should Kris expect his gross pay this period to be?
(1 point)
A. $1,000
B. $3,076.92
C. $4,076.92
D. $5,076.92
The answer is C. $4,076.92
Explanation:
Kris's base salary per pay period is $80,000/26 (number of pay periods in a year) = $3,076.92
For the $25,000 sale that was billed within the pay period:
Commission = 4% of $25,000 = $1,000
For the $25,000 sale that was not billed within the pay period:
Commission = 4% of $25,000 = $1,000 (even though it was not billed within the pay period, Kris still earned the commission for the sale)
Total gross pay for the pay period = $3,076.92 (base salary) + $1,000 (commission for billed sale) + $1,000 (commission for unbilled sale) = $4,076.92
The answer is C. a fund that tracks the S&P 500.
Explanation: Money market mutual funds are a type of mutual fund that invests in short-term, low-risk debt instruments, such as government bonds, certificates of deposit, and commercial paper. Investors in a money market fund can earn a small return on their investment with minimal risk of losing their principal.
A pension fund that tracks growth stock and a fund with a minimum investment that tracks the value of cash are not money market mutual funds but can be categorized as other types of mutual funds.
A fund that tracks commodities such as gold and silver is not a money market mutual fund either. It is a commodity fund.
The S&P 500 is an index that tracks the performance of 500 large publicly traded companies in the US. S&P 500 index funds can be classified as stock funds and are not considered money market mutual funds.
The answer is B. 1930s.
Explanation: The SEC, or Securities and Exchange Commission, was founded in 1934 as part of the Securities Exchange Act. This act was created in response to the stock market crash of 1929 and aimed to increase transparency in the U.S. securities markets and prevent fraudulent activities by regulating the securities industry. The SEC is responsible for enforcing federal securities laws and regulating the securities industry, including stock exchanges, brokers, and investment advisors.
The answer is A. Wells Fargo employees were opening unauthorized deposit and credit accounts for its customers.
Explanation: In 2016
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Can you help me with this one? If your refrigerator stops working and you have to replace it, describe how you would secure the money to solve the issue?(1 point)
A. by using credit cards because it is the easiest way to pay for it
B. by using an emergency fund for this unplanned expense
C. by taking it from the monthly budget and forgo paying some essential bills
D. by making a claim against your homeowner’s insurance
The answer is B. by using an emergency fund for this unplanned expense.
Explanation: An emergency fund is specifically set aside for unplanned or unexpected expenses that can arise suddenly. If your refrigerator stops working and you have to replace it, the best way to secure the money would be to dip into your emergency fund. This option will prevent you from racking up potential high-interest debts that credit cards may carry and will ensure that your other essential bills are still paid on time. Making a claim against your homeowner's insurance may not be necessary or the most cost-effective solution for just one appliance, and taking money from your monthly budget by forgoing some essential bills is not a feasible or advisable solution.
What is the equation to ensure that a balance sheet is correct?(1 point)
A. Assets = Liabilities + Equity
B. Accounts Payable = Long-term Debt + Earnings
C. Assets = Liabilities – Equity
D. Accounts Payable = Liabilities + Equity
The answer is A. Assets = Liabilities + Equity.
Explanation: The accounting equation (also known as the balance sheet equation) is Assets = Liabilities + Equity. This equation represents the relationship between a company's assets, which are things it owns or has control over, and its liabilities and equity, which are the sources of funding for those assets. By ensuring that this equation balances, it ensures that the balance sheet is correct. In other words, the total assets of a company must be equal to the total of its liabilities and equity.
Which of the following is true of debit cards?
(1 point)
A. Your bank may charge you a large fee each time you use one.
B. When you buy something from a store, you may be offered a discount if you get one.
C. They usually charge a lower interest rate than credit cards.
D. They can be used to make online purchases
The answer is D. They can be used to make online purchases.
Explanation: Debit cards are linked directly to a customer's bank account and can be used to make purchases in stores, online, and over the phone, much like a credit card. However, unlike a credit card which gives the user a line of credit and charges interest on balances that are carried over from month to month, the purchase amount is debited directly from the customer's account when using a debit card. There are usually no fees charged by banks or merchants for using a debit card, and they do not generally offer discounts like a store credit card.
Which of the following is not a money market mutual fund?(1 point)
Responses
a pension fund that tracks growth stock
a fund with a minimum investment that tracks the value of cash
a fund that tracks the S&P 500
a fund that tracks commodities such as gold and silver
When was the SEC founded?(1 point)
Responses
1920s
1930s
1940s
1950s
What is the best source for a personal loan?
(1 point)
Responses
A financial institution that is FDIC-insured so the loan is secure.
Banks because they are highly regulated by the government, so the loan terms will not be predatory.
It is better to get a payday loan instead of a personal loan.
Extend your mortgage to cover the personal loan for the best possible rates.
The answer is A. A financial institution that is FDIC-insured so the loan is secure.
Explanation: Personal loans can be obtained from various sources such as banks, credit unions, and online lenders. However, the best source for a personal loan is typically a financial institution that is FDIC-insured so that the loan is secure. FDIC (Federal Deposit Insurance Corporation) is a government agency that provides deposit insurance to protect depositors in the event of a bank failure. Banks that are FDIC-insured are insured up to $250,000 per depositor, per account category, in case the bank fails.
It is not advisable to take a payday loan as they typically have extremely high-interest rates and fees. It is also not recommended to extend your mortgage to cover a personal loan as it may result in paying more interest over a longer period of time.
What might an individual who goes through Chapter 7 bankruptcy be forced to sell?(1 point)
Responses
their house
some of their clothes
some of their furniture
their vacation cabin
The answer is A. Their house.
Explanation: Chapter 7 bankruptcy is a type of bankruptcy that involves the liquidation of non-exempt assets to pay off eligible debts. In a Chapter 7 bankruptcy, a court-appointed trustee is responsible for liquidating non-exempt property, which may include a person's house if it is not exempt. However, many states provide exemptions that can protect a debtor’s house from being sold to pay off debts, which vary by state.
Clothing and furniture are typically considered exempt in bankruptcy, and a vacation cabin may or may not be exempt depending on the state and the debtor's specific situation. However, a person may be required to sell all non-exempt assets, including real estate, to pay off their eligible debts during a Chapter 7 bankruptcy process, subject to state exemptions.
When applying for a loan, what should you do?(1 point)
Responses
You should borrow from an institution close to your home.
You should wait until you have a long credit history.
You should go to a state that has low interest rates.
You should shop around for the best overall deal.
The answer is D. You should shop around for the best overall deal.
Explanation: When applying for a loan, it is important to shop around for the best overall deal. This means comparing interest rates, fees, repayment terms, and other important factors offered by different lenders before deciding on the best lender for you. Borrowing from an institution close to your home may be convenient, but that should not be the only consideration in selecting a lender. Waiting until you have a long credit history is not necessarily the best approach since creditors also look at factors like income, credit utilization, and debt-to-income ratio when making loan decisions. Going to a state that has low interest rates is not necessary as different lenders may offer different interest rates in the same state. It's best to do research and compare loan options to make an informed decision that fits your financial needs and goals.
Which of the outlines a danger of using credit, if you are not careful?(1 point)
Responses
When you use a credit card, the money is taken directly from your bank account.
If you use a debit card, it is easy to run up huge debts.
When you use a debit card, you do not have to pay sales tax.
If you use a credit card, it is easy to run up huge debts.
The answer is D. If you use a credit card, it is easy to run up huge debts.
Explanation: Credit cards can be a useful financial tool, but they can also be very dangerous if not used responsibly. One of the major dangers of using credit is the ease with which one can run up debts. With a credit card, it is easy to spend more than you can afford, and carrying a balance can incur high interest charges that can quickly add up to huge debts.
On the other hand, when you use a debit card, the money is taken directly from your bank account, so you cannot spend more than you have in your account. Using a debit card also does not have an impact on your credit score. It is also not true that you do not have to pay sales tax when you use a debit card. Sales taxes apply to purchases made with both debit and credit cards.
Which of the following is a typical characteristic of debit cards?(1 point)
Responses
Your bank may charge you a very large fee each time you use one.
When you buy something from a store, you may be offered a discount if you open one with the store.
They usually charge a lower interest rate than credit cards.
They are tied directly to your bank account.
The answer is D. They are tied directly to your bank account.
Explanation: Debit cards are linked directly to a customer's bank account and can be used to make purchases in stores, online, and over the phone, much like a credit card. However, unlike credit cards which gives the user a line of credit and charge interest on balances that are carried from month to month, the purchase amount is debited directly from the customer's account when using a debit card. Since the money is debited directly from the customer's account, there are usually no or minimal fees charged by banks or merchants for using a debit card.
What is covered at no cost by health insurance plans because of the ACA?(1 point)
Responses
co-pays
accidents
preventative care
illness
The answer is C. Preventative care.
Explanation: The Affordable Care Act (ACA), also known as Obamacare, requires health insurance plans to cover certain preventive care services without charging a copayment, coinsurance, or deductible. These services include routine vaccinations, cancer screenings, and blood pressure checks, among others. The idea behind this requirement is to encourage people to seek preventative care services that can help identify health problems early when they are easier and less expensive to treat. Note that while preventive care is covered at no cost, other medical care including treatment for illnesses and accidents may be subject to copays, deductibles, or coinsurance depending on the specific health insurance plan.
What does the liability model of 100/300/50 mean for auto insurance?(1 point)
Responses
$100 premium, $300 deductible, $50 discount for automatic payment
$100,000 per person bodily injury, $300,000 per incident for bodily injury, $50,000 for property damage
$100,000 property damage, $300,000 total per incident, $50,000 bodily injury per person
$100 discount for good driver, $300 forgiveness, $50 discount for automatic payment
The answer is B. $100,000 per person bodily injury, $300,000 per incident for bodily injury, $50,000 for property damage.
Explanation: The liability model of 100/300/50 refers to the amount of coverage provided by an auto insurance policy for bodily injury and property damage liability claims. The numbers in the model represent the maximum amounts that the insurance company will pay out per incident in the event of a covered claim. Specifically, 100 represents $100,000 of coverage per person for bodily injury claims resulting from an accident, 300 represents $300,000 of coverage per accident for bodily injury, and 50 represents $50,000 of coverage for property damage.
For example, if you are at fault in a car accident that causes $30,000 of damage to someone else's car, your insurance company will pay for the damage up to the limit of your policy, which in this case would be $50,000. Similarly, if you cause an accident that results in three people being injured, one with injuries totaling $80,000 and the other two with injuries totaling $100,000, your insurance company would pay a total of $300,000 in bodily injury claims ($80,000 + $100,000 + $100,000), subject to the policy limits.
What are the three main variables among the different types of life insurance policies?(1 point)
Responses
how long the coverage lasts, how much the premium costs, and the cash value
length of coverage, application process, death benefit amount
length of coverage, whether a physical is required, and cost of the premium
the cost of the riders, funeral cost coverage, and cash value.
The answer is A. How long the coverage lasts, how much the premium costs, and the cash value.
Explanation: There are many different types of life insurance policies, but the three main variables that distinguish them are how long the coverage lasts, how much the premium costs, and the cash value component. The length of coverage is the term of the policy, or how long the policyholder is covered, which can range from a few years to a lifetime. The premium is the amount paid by the policyholder to maintain the coverage, which can vary depending on factors such as age, health, and the coverage amount. The cash value is a savings component that grows over time and can be used by the policyholder for various purposes, including borrowing against the policy or surrendering the policy for cash. Different types of life insurance policies prioritize these variables in different ways, depending on the individual's needs and goals.
What type of life insurance do employers usually offer as a benefit?(1 point)
Responses
whole life
universal life
1-year renewable group term life
20-year Term life.
The answer is C. 1-year renewable group term life.
Explanation: Employers often offer their employees life insurance as part of a benefits package. The most common type of life insurance offered by employers is 1-year renewable group term life insurance. Group term life insurance is typically more affordable than individual policies, as the cost is spread among a larger group of people. With 1-year renewable group term life insurance, the coverage lasts for one year and is renewable for subsequent years, subject to the terms of the policy. The premiums for this type of policy are generally lower than for other types of policies, which makes them a popular option for employers to offer as an employee benefit. Other types of policies, such as whole life, universal life, and 20-year term life, may be available in addition to, or instead of, group term life insurance, depending on the employer's policies.
Why is public Wi-Fi a danger?(1 point)
Responses
It can allow for the downloading of malware.
Identity thieves can intercept unencrypted data being sent to Wi-Fi hot spots.
It can use up all of your data allowance.
It can use up all the memory on the device.
The answer is B. Identity thieves can intercept unencrypted data being sent to Wi-Fi hot spots.
Explanation: Public Wi-Fi can be a danger because it is often not secure and can be vulnerable to hacking. When using public Wi-Fi, identity thieves can potentially intercept unencrypted data that you send over the Wi-Fi network, including usernames, passwords, and personal information. This can happen because Wi-Fi signals typically extend beyond the intended area, making it easier for hackers to intercept sensitive data. Hackers can also use public Wi-Fi to deploy malware to your device to gain access to your files and personal information.
Using public Wi-Fi does not use up your data allowance or all the memory on your device. However, connecting to public Wi-Fi without appropriate security measures can make your device and personal data vulnerable to attacks. To stay safe while using public Wi-Fi, consider using a Virtual Private Network (VPN) that encrypts your internet traffic, avoiding online shopping or banking while connected to public Wi-Fi, and turning off the auto-connect feature.
Why was a fine levied by the Consumer Financial Protection Bureau against Wells Fargo in 2016?(1 point)
Responses
Wells Fargo employees were opening unauthorized deposit and credit accounts for its customers.
Wells was selling their customers information to others
The company was posting incorrect information about its customers to credit bureaus
The company was given a lower rating by the CFPB.
What is the least expensive postsecondary education?(1 point)
Responses
a public, four-year in-state college degree
2 year, out-of-state community college degree
2 year in state community college degree
tech/trade or vocational school