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FP 100T Week 1 WileyPLUS Weekly Exam

In this graded assignment, you are assessed on the content covered in this weeks' readings, activities, and assignments. To help you prepare, it is recommended that you first complete this week's Learning Path and Self-Test Learning Activities prior to completing this exam.

Complete the Week 1 Exam covering this week's assigned readings:

"Ch. 1: The Financial Planning Process"

"Ch. 2: Financial Planning Tools: Personal Financial Statements and the Time Value of Money"

Note: Work submitted in WileyPLUS does not count toward attendance. Be sure to post at least two times each week in the online classroom to avoid being auto-dropped from the course.


Question 1

 

Your answer is correct.

   

Which of the following in NOT one of the recommended SMART guidelines for personal financial goals?


Specific

 

Realistic

 

Attainable

 

Manageable 

Attainable

 

Manageable





Question 2

  Your answer is correct.

Which of the following describes a financial advisor who is paid based on a percentage of products sold or purchased by clients?


 

 

Fee-based

 

Commission-only

 

Fee plus commission

 

Fee-only



Question 3

  Your answer is correct.

   

A comprehensive financial plan includes three steps: establishing a firm foundation, securing basic needs, and


 

 

building and protecting wealth.

 

setting long-term goals.

 

monitoring progress.

 

setting short-term goals.




Question 4

  

 

Your answer is correct.

   

Which of the following would NOT be a major factor when choosing a personal financial planner?


 

 

education

 

affiliation

 

reputation

 

certification




Question 5

  

 

Your answer is correct.

   

The federal funds rate is the rate that


 

 

credit card issuers use as the teaser rate.

 

banks charge customers for short-term loans.

 

banks charge each other for short-term loans.

 

the Federal Reserve charges banks for short-term loans.




Question 6

  

 

Your answer is correct.

   

An expansion is a phase in the economic cycle that is characterized by


 

 

decreasing business investment and decreasing employment opportunities.

 

increasing business investment and decreasing employment opportunities.

 

increasing business investment and increasing employment opportunities.

 

decreasing business investment and increasing employment opportunities.




Question 7

  

 

Your answer is correct.

   

Which of the following describes a Certified Financial Planner (CFP®)?


 

 

A CFP® has passed a rigorous exam.

 

A CFP® has worked in the banking industry.

 

A CFP® has at least five years of experience.

 

A CFP® majored in financial planning in college.




Question 8

  

 

Your answer is correct.

   

In deciding whether to go to graduate school, evaluating the benefit based on the potential change in your earnings is an example of


 

 

sensitivity analysis.

 

future value.

 

opportunity cost.

 

marginal reasoning.




Question 9

  

 

Your answer is correct.

   

The financial planning process includes five steps. Four of the steps are listed below:


Analyze your current financial status.

Implement your financial plan.

Monitor your progress and revise your plan as needed.

Organize your financial information and set short-term and long term goals.


What is the missing step?


 

 

Identify and evaluate alternative strategies for meeting your goals.

 

Understand the personal financial planning process.

 

Acquire the necessary decision-making skills and tools.

 

Build wealth and protection against emergencies.




Question 10

  

 

Your answer is correct.

   

In a fee-based arrangement, the planner is compensated with an annual fee that is usually


 

 

a set amount for all clients.

 

based on the number of financial products purchased.

 

waived for large investment portfolios.

 

based on the size of the client’s asset portfolio being managed.




Question 11

  

 

Your answer is correct.

   

Which of the following is NOT one of the steps in the personal financial planning process?


 

 

Purchase life insurance.

 

Implement a plan for achieving goals.

 

Identify and evaluating alternative strategies for achieving goals.

 

Develop short-term and long-term financial goals.




Question 12

  

 

Your answer is correct.

   

In a __________ arrangement, the planner is compensated for every financial product sold but does not receive any payment for developing a personal financial plan.


 

 

fee offset by commission

 

commission only

 

fee plus commission

 

fee only




Question 13

  

 

Your answer is correct.

   

Which of the following has passed a comprehensive examination covering all the topic areas considered necessary in the practice of financial planning and has at least three years of work experience in the field?


 

 

Certified Public Accountant (CPA)

 

Certified Financial Planner (CFP®)

 

Accredited Financial Planner (AFC)

 

Chartered Financial Consultant (ChFC)




Question 14

  

 

Your answer is correct.

   

The basic idea of the time value of money is that $1 to be received in the future is worth ______ $1 received today because of the value of the compound interest.


 

 

less than

 

more than

 

the same as




Question 15

  

 

Your answer is correct.

   

A financial statement used to evaluate the relationship between your income and expenditures is known as a


 

 

personal cash flow statement.

 

cost-benefit statement.

 

personal balance sheet.

 

liquidity statement.




Question 16

  

 

Your answer is correct.

   

Gross monthly income = $3,500

After-tax monthly income = $2,870

Total debt = $86,000

Total monthly debt payments = $402

Total assets = $113,000


Based on the information given above, what is the debt ratio?


 

 

3%

 

131%

 

47%

 

76%




Question 17

  

 

Your answer is correct.

   

You can afford to make monthly payments of a certain amount for three years, and you want to know how much you can borrow based on this payment amount. Which type of time value of money calculation should be used to solve this problem?


 

 

future value of a lump sum

 

present value of an annuity

 

future value of an annuity

 

present value of a lump sum




Question 18

  

 

Your answer is correct.

   

A personal cash flow statement


 

 

shows income and expenditures over a period of time.

 

uses the same information needed for the personal balance sheet.

 

shows income and expenditures at one specific point in time.

 

is necessary for calculating one's net worth.




Question 19

  

 

Your answer is correct.

   

You estimate your monthly mortgage principal and interest will be $1,000, property taxes will be $160 per month, and homeowner’s insurance will be $50 per month. If your gross monthly income is $4,000 per month and your tax rate is 20 percent, what is your mortgage debt service ratio?


 

 

65.2%

 

60.5%

 

30.25%

 

37.8%




Question 20

  

 

Your answer is correct.

   

You expect to receive a sum of money 10 years from now, and you want to know how much it is worth today. Which time value of money calculation should be used to solve this problem?


 

 

future value of an annuity

 

present value of a lump sum

 

present value of an annuity

 

future value of a lump sum




Question 21

  

 

Your answer is correct.

   

You plan to invest $2,000 every year (end-of-year payments) from now until you retire in 30 years. If you can earn 7% annually on your invested funds, how much will you have when you retire?


 

 

$15,225

 

$25,081

 

$188,922

 

$204,146




Question 22

  

 

Your answer is correct.

   

In order to determine how much you would need to save yearly in order to finance your child’s college education in 10 years, you would use


 

 

future value.

 

future value of an annuity.

 

present value.

 

present value of an annuity.




Question 23

  

 

Your answer is correct.

   

Which of the following is true regarding future value?


 

 

the higher the interest rate, the lower the future value

 

the longer the term, the lower the future value

 

the shorter the term, the higher the future value

 

the lower the interest rate, the lower the future value




Question 24

  

 

Your answer is correct.

   

Your assets total $100,000. Your total debts are $80,000. Your net worth is


 

 

0.8.

 

$180,000.

 

$20,000.

 

1.2.



Question 25

  

 

Your answer is correct.

   

You are considering two amortized loans with the same interest rate and the same initial amount borrowed. If the number of months to repay Loan X is greater than the number of months to repay Loan Y, the monthly payment on Loan X will be _____ than the payment on Loan Y.


 

 

higher

 

lower


FP 100T Week 2 WileyPLUS Weekly Exam

In this graded assignment, you are assessed on the content covered in this week's readings, activities, and assignments. To help you prepare, it is recommended that you first complete this week's Learning Path and Self-Test Learning Activities prior to completing this exam.

Complete the Week 2 WileyPLUS Weekly Exam covering this week's assigned readings:

"Chapter 3: Budgeting and Cash Management"

"Chapter 4: Tax Planning"

Note: Work submitted in WileyPLUS does not count toward attendance. Be sure to post at least two times each week in the online classroom to avoid being auto-dropped from the course.


Question 1

   

Your answer is correct.

   

If you write a check or use your debit card when there isn’t enough money in your account to cover the payment, this is known as


 

 

being unbanked.

 

skimming.

 

a stop payment.

 

an overdraft.




Question 2

  

 

Your answer is correct.

   

Simone spent an average of $500 each month on groceries last year for herself and her family. She is now forecasting the family budget for next year. She read that an inflation rate of 5% is expected. How much should Simone budget for the monthly food expense next year?


 

 

$500

 

$475

 

$525

 

$750




Question 3

  

 

Your answer is correct.

   

One approach to forecasting variable expenses is to


 

 

use a wide range of estimates.

 

assign probabilities to different outcomes.

 

increase them by the expected inflation rate.

 

keep them constant.




Question 4

  

 

Your answer is correct.

   

Which of the following is (are) good reasons for tracking budget variances?


 

 

to ensure that large, irregular cash expenses do not cause financial hardship.

 

to determine the largest categories of expenditures for future reductions.

 

to identify small cash leakages before a major shortfall.

 

all of the choices are good reasons to track budget variances.




Question 5

  

 

Your answer is correct.

   

Which of the following types of accounts is not insured for $250,000 by the Federal Deposit Insurance Corporation (FDIC)?


 

 

savings account at a commercial bank

 

money market mutual fund offered by an insurance company

 

checking account at an online bank

 

savings account at a savings and loan association




Question 6

  

 

Your answer is correct.

   

A money market mutual fund is a mutual fund that invests in


 

 

stocks of the 500 largest companies in the United States.

 

investment quality corporate bonds.

 

short-term, low risk financial assets such as short-term government bonds.

 

long-term certificates of deposit.




Question 7

  

 

Your answer is correct.

   

Janice’s monthly expenses are $6,000, and she has $10,000 in checking and savings. Which of the following is true about her financial situation?


 

 

Janice has too much in liquid assets.

 

Janice should consider investing her $10,000 in a stock mutual fund to generate higher returns on her investment.

 

Janice needs to try to reduce her spending.

 

Janice needs to increase her emergency fund.




Question 8

  

 

Your answer is correct.

   

The steps in the budgeting process are forecasting cash flows, __________, monitoring, and reevaluating over time.


 

 

implementing

 

adjusting

 

negotiating

 

selecting




Question 9

Which of the following pays interest that is exempt from state and local taxation?


 

 

certificate of deposit

 

NOW account

 

series EE bond

 

inflation.




Question 10

  

 

Your answer is correct.

   

Compared with time deposits, demand deposits


 

 

place a greater limit on the number of checks you can write each month.

 

require you to leave the funds on deposit for a longer period of time.

 

allow you to withdraw money at any time.

 

pay higher rates of interest.




Question 11

  

 

Your answer is correct.

   

A savings account that pays a stated rate of interest if you agree to leave your money on deposit for a certain period of time is known as a


 

 

mutual fund.

 

series EE fund.

 

certificate of deposit.

 

money market account.




Question 12

  

 

Your answer is correct.

   

A depository institution differs from a nondepository institution in that it gets its funds from


 

 

investors.

 

customer deposits.

 

loans.

 

the FDIC.




Question 13

Matthew is 16 years old and can be claimed as a dependent by his parents. He received $1,500 in dividends and $650 in interest and earned $4,800 from odd jobs during the year. Will Matthew need to file a separate tax return? Why?


 

 

Yes. His unearned income exceeds the maximum limit.

 

No. His unearned income and gross income do not exceed the maximum limits.

 

No. His gross income does not exceed the maximum limit.

 

Yes. His earned income exceeds the maximum limit.




Question 14

  

 

Your answer is correct.

   

Which of the following tax forms is known as the long form?


 

 

1040B

 

1040

 

1040X

 

1040A




Question 15

  

 

Your answer is correct.

   

Reimbursement accounts for qualified medical and child care expenses are known as


 

 

deferred compensation plans.

 

flexible spending accounts.

 

option plans.

 

cafeteria plans.




Question 16

Which of the following types of taxes paid is not an allowable itemized deduction?


 

 

use taxes

 

state income taxes

 

property taxes on your primary residence

 

personal property taxes




Question 17

  

 

Your answer is correct.

   

The U.S. income tax is considered


 

 

transgressive.

 

illegal.

 

regressive.

 

progressive.




Question 18

  

 

Your answer is correct.

   

Lee earned a salary of $25,000 from his job as a server last year. In addition, he earned $12,500 in tips, $135 in interest income, and $200 in dividend income from investments. What was Lee’s total income last year?


 

 

$25,335

 

$25,000

 

$37,500

 

$37,835




Question 19

  

 

Your answer is correct.

   

Which of the following filing status categories receives the largest standard deduction?


 

 

head of household

 

married filing separately

 

married filing jointly

 

single and 65 or older




Question 20

  

 

Your answer is correct.

   

Which of the following tax credits best applies to a low-income family with two children?


 

 

retirement savings contribution credit

 

American Opportunity credit

 

lifetime learning credit

 

child tax credit




Question 21

  

 

Your answer is correct.

   

A progressive tax is one in which


 

 

you pay more if you earn more.

 

you pay less if you earn more.

 

you pay the same regardless of earnings.

 

taxes are used for progressive services.




Question 22

  

 

Your answer is correct.

   

Which of the following tax credits best applies to a low-income person contributing to an IRA?


 

 

child tax credit

 

American Opportunity credit

 

retirement savings contribution credit

 

lifetime learning credit




Question 23

  

 

Your answer is correct.

   

Your average tax rate will always be _______ your marginal rate.


 

 

more than

 

the difference between your taxable income and

 

less than or equal to

 

the same as




Question 24

  

 

Your answer is correct.

   

Which of the following must be included in total income on federal income tax returns?


 

 

insurance claim payments

 

tips and bonuses

 

worker’s compensation benefits

 

child support received




Question 25

  

 

Your answer is incorrect.

   

The dollar amount per qualifying household member that is subtracted from adjusted gross income is known as


 

 

a reduction.

 

a tax credit.

 

a deduction.

 

an exemption.




FP 100T Week 3 WileyPLUS Weekly Exam

In this graded assignment, you are assessed on the content covered in this weeks' readings, activities, and assignments. To help you prepare, it is recommended that you first complete this week's Learning Path and Self-Test Learning Activities prior to completing this exam.

Complete the Week 3 WileyPLUS Weekly Exam covering this week's assigned readings:

"Chapter 5: Managing Credit: Credit Cards and Consumer Loans"

"Chapter 6: Making Automobile and Housing Decisions"

Note: Work submitted in WileyPLUS does not count toward attendance. Be sure to post at least two times each week in the online classroom to avoid being auto-dropped from the course.


Question 1

   

Your answer is correct.

   

In calculating the annual percentage rate on a credit card account, the total annual finance charges includes interest and


 

 

late payment charges

 

all fees and charges assessed on the account

 

mandatory annual fee

 

overlimit charges




Question 2

The purpose of an amortization table is to


 

 

estimate the average monthly balance

 

calculate monthly payments on a mortgage

 

show the breakdown of monthly payments into interest paid on the outstanding balance and principal repayment over the life of a loan

 

identify when the loan will be paid in full




Question 3

  

 

Your answer is correct.

   

The legal document that specifies the terms and conditions of a consumer loan is the


 

 

trust agreement

 

lien

 

promissory note

 

judgement




Question 4

  

 

Your answer is correct.

   

When real property is used as collateral to secure a loan, the lender records a __________ against the property.


 

 

deed

 

mortgage

 

judgement

 

lien




Question 5

  

 

Your answer is correct.

   

In assessing a person’s creditworthiness using the Five Cs of Credit, which of the following is applicable in the category of “capacity”?


 

 

the income of the person applying for credit

 

the value of the asset that will secure the loan

 

the amount of other debt the applicant already owes

 

the credit score of the person applying for credit




Question 6

  

 

Your answer is correct.

   

Which type of bankruptcy requires the liquidation of most of your assets?


 

 

Chapter 13

 

Chapter 5

 

Chapter 7

 

Chapter 11




Question 7

  

 

Your answer is correct.

   

Which of the following statements is true concerning home equity loans?


 

 

Home equity loans cannot be used to pay for college costs.

 

Home equity loan proceeds are generally restricted as to purpose.

 

Home equity loans are generally installment loans with a 1-5 year term.

 

Home equity loan interest is tax-deductible up to a maximum of $100,000.




Question 8

  

 

Your answer is correct.

   

Payday lenders are controversial because they


 

 

charge very high rates of interest.

 

make it easier for undocumented workers to stay in the job market.

 

are in competition with traditional lenders.

 

allow people cash their paychecks even when they do not have a bank account.




Question 9

  

 

Your answer is correct.

   

Which of the following statements concerning the add-on interest method is true?


 

 

The lender subtracts the interest due from the principal before the borrower receives the loan proceeds.

 

It results in a lower APR than the simple interest method.

 

It usually results in a higher APR than the discount interest method.

 

Interest is added to the amount borrowed before the payments are calculated.




Question 10

  

 

Your answer is correct.

   

Which of the following is not one of the situations that can defer student loan payments?


 

 

Peace Corps service

 

Change in citizenship

 

Postsecondary study

 

Economic hardship




Question 11

  

 

Your answer is correct.

   

When lenders evaluate your sources of income and your expenses, they are considering your


 

 

Capacity

 

Capital

 

Collateral

 

Character





Question 12

  

 

Your answer is correct.

   

When real property is used as collateral to secure a loan, the lender records a __________ against the property.


 

 

mortgage

 

lien

 

deed

 

judgement




Question 13

  

 

Your answer is correct.

   

The method most commonly used by financial institutions to determine finance charges on consumer loans is the


 

 

discount interest method

 

compound interest method

 

simple interest method

 

add-on interest method




Question 14

  

 

Your answer is correct.

   

Michael is considering getting a closed-end lease on a car for 48 months. The car dealer quotes him a monthly payment of $349. If Michael were to buy the car with the same down payment, his monthly payment would be $465 a month. Michael's lease payment is lower because


 

 

car dealers make a lower profit on leased cars.

 

leased cars do not come with a manufacturer's warranty.

 

he is not paying for the residual value of the car at the end of four years.

 

he is paying finance charges only on the amount of the car that will be depreciated over four years.





Question 15

  

 

Your answer is correct.

   

Which of the following is a mortgage loan that has a fixed rate, a fixed term, and fixed payments?


 

 

growing equity mortgage

 

conventional mortgage

 

reverse annuity mortgage

 

ARM




Question 16

Which of the following statements is true of adjustable-rate mortgages?


 

 

There is no limit as the amount of payment change on an ARM.

 

The interest rate changes on ARMs are limited per year and per lifetime.

 

They generally carry higher initial interest rates than conventional mortgages.

 

They cannot be converted to fixed-rate loans.




Question 17

  

 

Your answer is correct.

   

When considering spending on housing needs, if a person is heavily immersed in credit card debt,


 

 

it would be a good idea to save money by cutting on housing expenditures and paying down credit card debt first.

 

credit card debt and housing needs are separate and should not be interlinked.

 

the individual should continue to borrow against credit cards to maintain a roof over their head.

 

the person should first satisfy housing needs and then focus on paying down credit card debt.




Question 18

  

 

Your answer is correct.

   

Gross capitalized cost in an automobile lease is equivalent to ___________ in a new car purchase.


 

 

depreciation

 

a down payment

 

a finance charge

 

a negotiated purchase price




Question 19

  

 

Your answer is correct.

   

An account held by the mortgage lender and used to cover property taxes and homeowner's insurance is known as a(n):


 

 

assessed account.

 

reserve account.

 

tax account.

 

escrow account.




Question 20

  

 

Your answer is correct.

   

Mike is applying for a home loan and wants to buy a house worth $150,000 in a neighborhood close to his work. However, he only has $15,000 toward the down payment. Mike may be required by the lender to


 

 

buy a cheaper house further away from his work.

 

get a cosigner to the loan.

 

wait a few years before he can save a 20% down payment.

 

carry mortgage insurance and pay the premium.




Question 21

  

 

Your answer is correct.

   

Which of the following is a variable operating expense of an automobile?


 

 

taxes

 

insurance premiums

 

finance charges

 

toll fees




Question 22

  

 

Your answer is correct.

   

In a home purchase, what are discount points?


 

 

A reduction in the annual interest rate of the mortgage loan because the buyer made a higher-than-required down payment.

 

Interest paid up front to the lender in return for a reduced monthly mortgage payment.

 

Interest paid up front by the buyer to the lender in return for a reduced annual interest rate.

 

A reduction in the closing costs due to the fact the buyer put up a large amount of earnest money.




Question 23

  

 

Your answer is correct.

   

An interest rate cap is likely to be associated with a(n) ________ mortgage.


 

 

adjustable rate

 

fixed rate

 

balloon

 

growing equity




Question 24

If all else is equal, which of the following is LEAST likely to increase the price of the house you can afford to buy?


 

 

increasing mortgage rates

 

longer mortgage term

 

improvement in your credit rating

 

increase in your gross monthly salary

________________________________________




Question 25

  

 

Your answer is correct.

   

Closing costs on the purchase of a house


 

 

reduce the amount of cash available for the down payment.

 

increase the amount of cash available for the down payment.

 

increase the mortgage insurance premium.

 

are paid by the lender.



FP 100T Week 4 WileyPLUS Weekly Exam

In this graded assignment, you are assessed on the content covered in this week's readings, activities, and assignments. To help you prepare, it is recommended that you first complete this week's Learning Path and Self-Test Learning Activities prior to completing this exam.

Complete the Week 4 Exam covering this week's assigned readings:

"Chapter 10: Saving for Distant Goals: Retirement and Education Funding"

"Chapter 11: The Fundamentals of Investing"

Note: Work submitted in WileyPLUS does not count toward attendance. Be sure to post at least two times each week in the online classroom to avoid being auto-dropped from the course.


Question 1

  Which of the following is NOT an income-driven repayment plan for federal student loans?


Income-based repayment

 

Pay as you Earn plan

 

Income deferment plan

 

Income-contingent plan




Question 2

 

If you are not working, you can apply with your loan servicer for which of the following to postpone monthly payments.

&l

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