UGBA 135 EXAMINATION TEST 2026 FULL
SOLUTION QUESTIONS AND ANSWERS
GRADED A+
●● Lenders use credit reports to help them decide whether to loan you
money and what interest rate to charge.
Answer: true
●● Which of the following is usually the most important type of debt to
focus on paying off quickly:.
Answer: Credit card balances
●● Which types of debt "steal from your future"?.
Answer: 1. paycheck advances
2. credit card balances
●● Why is Social Security called a PAYGO system?.
Answer: Because the payroll taxes paid by current workers are used to
pay current retirement benefits.
●● Medicare Part A, Hospital Insurance is free; people must pay for
Medicare Parts B, C, and D if they want them..
Answer: TRUE
,●● If you buy a company's bond.
Answer: you have lent money to the company
●● Holding a diversified portfolio of stocks rather than an undiversified
portfolio.
Answer: 1. increases the variance (variation in outcomes) of the
portfolio
2. increases the likelihood that you will own at least one stock that
performs poorly
●● Actively trading common stocks is the best long-term investment
strategy for most investors..
Answer: False
●● The potential advantages of index funds are.
Answer: 1. many have low fees
2. many are well-diversified
●● When buying a mutual fund, which of the following is most
important?.
Answer: The fees the fund charges
, ●● The fees charged by index funds vary with the types of assets the
funds invest in..
Answer: TRUE
●● Exchange Traded Funds (ETFs) sometimes charge high fees, but
they are always well diversified..
Answer: False
●● Investments with higher risk always have higher expected returns..
Answer: False
●● Common ways for financial advisors to be compensated are:.
Answer: 1. An annual percentage of the client's assets under
management.
2. Commissions
3. By the hour or a flat fee for specific services.
●● Typical annual financial advisor fees when charged as a percentage
of assets under management often exceed what you can earn today in a
one year certificate of deposit..
Answer: True
●● Landlords can require tenants to have renters insurance..
SOLUTION QUESTIONS AND ANSWERS
GRADED A+
●● Lenders use credit reports to help them decide whether to loan you
money and what interest rate to charge.
Answer: true
●● Which of the following is usually the most important type of debt to
focus on paying off quickly:.
Answer: Credit card balances
●● Which types of debt "steal from your future"?.
Answer: 1. paycheck advances
2. credit card balances
●● Why is Social Security called a PAYGO system?.
Answer: Because the payroll taxes paid by current workers are used to
pay current retirement benefits.
●● Medicare Part A, Hospital Insurance is free; people must pay for
Medicare Parts B, C, and D if they want them..
Answer: TRUE
,●● If you buy a company's bond.
Answer: you have lent money to the company
●● Holding a diversified portfolio of stocks rather than an undiversified
portfolio.
Answer: 1. increases the variance (variation in outcomes) of the
portfolio
2. increases the likelihood that you will own at least one stock that
performs poorly
●● Actively trading common stocks is the best long-term investment
strategy for most investors..
Answer: False
●● The potential advantages of index funds are.
Answer: 1. many have low fees
2. many are well-diversified
●● When buying a mutual fund, which of the following is most
important?.
Answer: The fees the fund charges
, ●● The fees charged by index funds vary with the types of assets the
funds invest in..
Answer: TRUE
●● Exchange Traded Funds (ETFs) sometimes charge high fees, but
they are always well diversified..
Answer: False
●● Investments with higher risk always have higher expected returns..
Answer: False
●● Common ways for financial advisors to be compensated are:.
Answer: 1. An annual percentage of the client's assets under
management.
2. Commissions
3. By the hour or a flat fee for specific services.
●● Typical annual financial advisor fees when charged as a percentage
of assets under management often exceed what you can earn today in a
one year certificate of deposit..
Answer: True
●● Landlords can require tenants to have renters insurance..
