PoBF Unit 4.03 Review (14 Questions - 2) Question Preview (ID: 10172)


PoBF 4.03 Test. TEACHERS: click here for quick copy question ID numbers.

How much interest is earned on a balance of $1,800 that is compounded semiannually at a 6% interest rate for an account maintained for one year?
a) $109.62
b) $110
c) $154
d) $175

Sam prefers a savings plan that allows him to earn interest on previously earned interest. Which type interest does he prefer?
a) compound
b) money market
c) simple
d) variable

Ted deposits money in a savings plan regularly. The interest he earns on this plan is indicative of how the money markets are doing. Which savings plan is he using?
a) bond investment
b) certificate of deposit
c) money market account
d) savings account

How are common and preferred stocks different?
a) Both pay limited dividend payments.
b) Preferred stock stockholders have priority in dividend payments.
c) Both have the same amount of risk
d) Both stockholders have voting rights.

Bob sells specialty guitars and hopes to exchange the guitars for a much higher value than the purchase price. Which type of investment could the guitars become?
a) collectibles
b) commodities and futures
c) commodity exchanges
d) gold. silver and precious metals

Mary needs a savings plan that will allow her to access her money as cash for potential emergency needs. Which type of evaluation factor of saving is she considering?
a) liquidity
b) potential return
c) safety and risk
d) taxes

How are common and preferred stocks different?
a) Common stock pays stockholders limited dividend payments.
b) Common stockholders have non-voting rights.
c) Preferred stock stockholders have priority in dividend payments.
d) Preferred stock stockholders have a minimum period of ownership.

How are common and preferred stocks similar?
a) Both pay limited dividend payments.
b) Both have a risk of loss of a investment.
c) Both have the same amount of risk.
d) Both stockholders have voting rights.

RadioShack offers shares of stock to investors at a consistent rate of 6% without any voting rights. What type of stock is it offering?
a) bond
b) common stock
c) mutual fund
d) preferred stock

Ted deposits money in a savings plan regularly. The interest he earns on this plan is indicative of how the money markets are doing. Which savings plan is he using?
a) bond investment
b) certificate of deposit
c) money market account
d) savings account

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