Are you man or woman enough to take a year-end, 51-question exam from the personal finance class of Catawba College professor Al Carter and Food Lion co-founder Ralph Ketner?
There’s a prize involved — dinner for two at a local restaurant with Ketner.
Answers to the exam should be emailed to acarter@catawba.edu, or mailed to Ketner School of Business, care of Catawba College, Attention: Angelia Bates, 2300 W. Innes St., Salisbury, NC 28144.
Deadline for entries is April 26.
You also can take the exam on the Catawba website at www.catawba.edu/financeexam.
Be sure to answer the tiebreaker question at the end, in case it is needed. The Post will publish answers on Sunday’s Business page May 1.
True or False (T or F):
_____(1) The Roth IRA offers advantages over the traditional IRA.
_____(2) Most bonds have a par value, maturity date, and a fixed interest rate.
_____(3) An annuity must have a maturity date and a minimum return.
_____(4) Mutual funds are available only for those over age 59[0xbd].
_____(5) A stock option allows one to purchase common stock at a fixed price.
_____(6) A stock with a high price-earning ratio usually indicates investors think the stock has a bright future.
_____(7) Annualcreditreport.com is only available for those who have a checking account.
_____(8) Your employer must, by law, offer health and disability insurance to all employees.
_____(9) The interest rate on student loans is 2% above the prime interest rate.
_____(10) FICO score can range between 300-850.
_____(11) FDIC insurers each bank account up to $250,000.
_____(12) Credit problems usually remain on your report for less than three years.
_____(13) It is desirable to keep 15 percent cushion in your account in case of an emergency.
_____(14) Your credit score cannot be considered in interest rates used on credit cards.
_____(15) The year of your college graduation you and your parents can claim you on the Federal Tax 1040 form.
_____(16) The traditional IRA shelters the amount you contribute from taxes until the money is withdrawn.
_____(17) An annuity may have a fixed or variable feature, but an annuityinvestment will not be sheltered from income taxes.
_____(18) The condition of dying without a will is called intestate.
_____(19) The executor of your will must not be a family member.
_____(20) One can give up to $13,000 per year to another person without the recipients reporting the gift as income.
_____(21) A power of attorney is a legal document granting a person the power to make specific decisions for you if you are incapacitated.
_____(22) The difference between what you pay for a stock and what you receive when you sell is called capital gain.
_____(23) The majority of stock sold is issued as preferred stock.
_____(24) Almost all mutual funds are balanced funds.
_____(25) Annuities can be both fixed and variable.
Multiple choice: Circle the letter that best answers the question or completes the sentence:
1. The U.S. is what percent of the world market capitalization of equity investment?
(A) 80%
(B) 54%
(C) 42%
(D) 31%
2. Bonds have:
(A) par value
(B) maturity dates
(C) interest rate
(D) All of these
3. A primary advantage of a mutual fund is:
(A) guaranteed returned
(B) diversitification
(C) low interest rates
(D) no expense factors
4. In purchasing a home the price should not exceed:
(A) Your gross income.
(B) Two and a half times your gross income.
(C) A loan that requires 45% of your gross income.
(D) Two times the closing cost of the loan.
5. If your loan is for $90,000 and the lender is charging 2 points on the loan, your charge is:
(A) $900
(B) $1,800
(C) $90
(D) Points are not allowed in a North Carolina loan.
6. Private Mortgage Insurance (PMI) protects the …
(A) Homeowners
(B) Lender
(C) FDIC
(D) Federal Reserve
7. You find three homes in your area have sold for A) $120,000 with 1,400 sq. feet B) $110,000 with 1,300 sq. feet and C) $130,000 with 1,600 sq. feet. Your home has 1,500 sq feet. What is the estimated value of your home?
(A) $116,000
(B) $126,000
(C) $132,000
(D) None of these
8. The difference between a 5% and a 7% loan on a $100,000, 30 year loan is about $140 per month. Over the life of the loan, you paid an additional:
(A) $1,680
(B) $10,080
(C) $50,400
(D) $60,800
9. If you purchase a home for $80,000 at 6% interest for 30 years you will pay a total of __________ in mortgage payments?
(A) $86,000
(B) $172,800
(C) $180,000
(D) $210,400
10. The difference in the total mortgage ($75,000) payment between a 6% 30-year loan and a 15 year 6% loan is how much over the duration of the loan:
(A) $30,000
(B) $38,000
(C) $49,000
(D) $58,000
11. The minimum liability limits on your automobile policy in North Carolina is:
A) 10,000/20,000
B) 30,000/60,000
C) 100,000/300,000
D) None of these
12. Uninsured motorist coverage includes:
A) Bodily injury
B) Property damage
C) Theft protection
D) All of these
E) All but one of these
13. The maximum points one can have on their driver license and continue to drive are:
A) 4
B) 8
C) 12
D) No limit since insurance is required in North Carolina
14. To balance your debt ratio it is best to keep your credit card balance to no more than __________% of your credit limit.
A. 10%
B. 20%
C. 50%
D. 80%
15. One can receive a free credit report once a year from …
A. annualcreditreport.com
B. freecredit.org
C. credithistory.com
16. If you have four credit cards, each with a limit of $5,000 but currently use only one with an average balance of $2,000, the bank can consider your debt limit is …
A. $2,000
B. $2,000 x 5 or $10,000
C. $20,000
D. Only your current credit card balance.
17. Credit problems remain on your credit report usually for:
A. One Year
B. Three Years
C. Seven Years
D. For Life
18. Overdraft protection offered by most banks is:
A. Required on all checking accounts.
B. Only available to accounts with the bank for more than two years.
C. Can not be required by most banks.
D. Usually tied to your credit card balance.
19. Credit bureau facts include:
A. There are three credit bureaus.
B. Each credit bureau must have the same credit score.
C. A credit score of 400 is considered good.
D. A credit score often does not indicate a person’s credit worthiness.
E. All of these are true.
20. Your credit score is often used in:
A. Credit card interest rates.
B. Insurance rates.
C. Employment records.
D. All of these.
21. Your employer must provide every employee
A) Health Insurance
B) Disability Insurance
C) Two weeks of Paid Vacation
D) All of the Above
E) None of the Above
22. FICO scores can range from
A) 3-10
B) 300-850
C) 100-1000
D) 10-100
23. The major factor in your credit score is
A) Annual income
B) Age
C) Payment History
D) Credit Card Balance
24. The interest rate on a student loan is
A) Always 2% less than the prime interest rate.
B) Can change each year.
C) Is usually 1% higher than the prime interest rate.
D) Established by the college granting the loan.
25. In North Carolina one cannot drive a vehicle without a:
A) Liability Insurance
B) Collision Insurance
C) Under Insurance Coverage
D) None of these
Tiebreaker: What do you think the closing Dow Jones Industrial Average will be on April 27? ________________