UGBA 135 PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED A+
◍ Do we recommend selling short or using stop order?.
Answer: No
◍ Highest FICO score.
Answer: 780 - 850
◍ 3 parties that can contribute to 401(k) plan?.
Answer: You, employer, and Uncle Sam
◍ Most important factor for credit score:.
Answer: 1.Record of paying bills on time over time 35% 2.Debt-to-credit
ratio, which is the total balance on your credit cards and other loans
compared to your total credit limit 30%3.Length of credit history 15%
4.New accounts and recent applications for credit 10% 5. Mix of credit
cards and loans 10%
◍ What are REITs?.
Answer: trade like stocks and pay NO tax at the corporate level if they
distribute at least 90% of the income to the shareholders; allows you to
participate in real estate without having to be a landlord
◍ If your car is damaged by an uninsured motorists, can you be insured with
your own insurance carrier (i.e. collect from your own insurance company)?.
Answer: Yes, but the other driver has to be at fault and not you
◍ When a remodeling job is completed, any remaining mechanic's liens will
automatically be cancelled..
Answer: False
◍ What is a K-1 form?.
Answer: Received from the partnership which states the financial info
, required to be filed with the individual tax returnThe same info is provided
to the IRS for checking
◍ Investments with higher risk always have higher expected returns..
Answer: False
◍ What is APR? Is that higher than the annual interest rate?.
Answer: Annual Percentage Rate, higher than the interest rate because APR
includes fees
◍ In some states, some bonds are free from taxes on a federal and state level..
Answer: TRUE
◍ How many types of partners are there?.
Answer: 2
◍ Suppose your roommate slips on the rug in your apartment, falls, and breaks
her arm. She has medical costs and she losses two weeks wages because she
can't work. What will renters insurance pay for (if you have it)?.
Answer: Will pay nothing.
◍ What is the pass-through deduction?.
Answer: This is a brand new 20% tax deduction of business income from a
proprietorship, partnership, limited liability corporation (LLC), or
S-Corporation. Only the remaining 80% of the income is taxed at the
taxpayer's marginal rate (up to 37%). It is available even if the filer does not
itemize deductions.
◍ What is yield to maturity?.
Answer: YTM: Expressed as an annual percentage rate, it is the sum of all
cash flows from both coupon payments and repayment of the face valueIf
bond was purchased for a premium, more than face value, yield to maturity
will be lower than the couponIf the bond was purchased at a discount, less
than face value, the yield to maturity will be higher than the coupon
◍ What is the conventional wisdom about making a profit on property?.
Answer: Conventional wisdom is you make your profit when you buy a
, property, not when you sell it.
◍ Are bonds issued by our govt considered risky?.
Answer: No
◍ What is dollar cost averaging?.
Answer: Investing a set amount of money in shares of stock on a regular
time schedule, regardless of the price of the shares at the time
◍ Fees on prepaid cards.
Answer: Activation fees up to $39.95Inactivity feesFees to load money onto
the cardFees if you do not load any money, or at least a minimum amount
onto the card each monthFees to check balance informationFees to use an
ATM for cashFees for using a check to close an account
◍ Differences between an HMO and a PPO?.
Answer: Unlike an HMO, PPOs allow you to choose from a group of
providers who have their own contracts with your insurance company to
provide services at a predetermined price. The medical provider must accept
these amounts as full payment, which is usually significantly discounted
from what you or I could get on our own. (263)
◍ What is a standard deduction on your tax return?-where's the proof?.
Answer: Single -12,000 on taxMarried/filing jointly-24,000There is no proof
or records necessary
◍ Are 401(k) plans set up as automatic payroll deduction?.
Answer: yes
◍ Whats the max interest they can charge on credit card account?.
Answer: No max interest some can come over 25% or more
◍ In a 401(k) plan, is diversification required by your employer?.
Answer: No, One requirement of a 401(k) plan is that the employer
designates the investments from which employees are allowed to select.
This limits the number of choices available to plan participants.
◍ What is the invoice price and is it the real price that the dealer paid?.
QUESTIONS WITH ANSWERS GRADED A+
◍ Do we recommend selling short or using stop order?.
Answer: No
◍ Highest FICO score.
Answer: 780 - 850
◍ 3 parties that can contribute to 401(k) plan?.
Answer: You, employer, and Uncle Sam
◍ Most important factor for credit score:.
Answer: 1.Record of paying bills on time over time 35% 2.Debt-to-credit
ratio, which is the total balance on your credit cards and other loans
compared to your total credit limit 30%3.Length of credit history 15%
4.New accounts and recent applications for credit 10% 5. Mix of credit
cards and loans 10%
◍ What are REITs?.
Answer: trade like stocks and pay NO tax at the corporate level if they
distribute at least 90% of the income to the shareholders; allows you to
participate in real estate without having to be a landlord
◍ If your car is damaged by an uninsured motorists, can you be insured with
your own insurance carrier (i.e. collect from your own insurance company)?.
Answer: Yes, but the other driver has to be at fault and not you
◍ When a remodeling job is completed, any remaining mechanic's liens will
automatically be cancelled..
Answer: False
◍ What is a K-1 form?.
Answer: Received from the partnership which states the financial info
, required to be filed with the individual tax returnThe same info is provided
to the IRS for checking
◍ Investments with higher risk always have higher expected returns..
Answer: False
◍ What is APR? Is that higher than the annual interest rate?.
Answer: Annual Percentage Rate, higher than the interest rate because APR
includes fees
◍ In some states, some bonds are free from taxes on a federal and state level..
Answer: TRUE
◍ How many types of partners are there?.
Answer: 2
◍ Suppose your roommate slips on the rug in your apartment, falls, and breaks
her arm. She has medical costs and she losses two weeks wages because she
can't work. What will renters insurance pay for (if you have it)?.
Answer: Will pay nothing.
◍ What is the pass-through deduction?.
Answer: This is a brand new 20% tax deduction of business income from a
proprietorship, partnership, limited liability corporation (LLC), or
S-Corporation. Only the remaining 80% of the income is taxed at the
taxpayer's marginal rate (up to 37%). It is available even if the filer does not
itemize deductions.
◍ What is yield to maturity?.
Answer: YTM: Expressed as an annual percentage rate, it is the sum of all
cash flows from both coupon payments and repayment of the face valueIf
bond was purchased for a premium, more than face value, yield to maturity
will be lower than the couponIf the bond was purchased at a discount, less
than face value, the yield to maturity will be higher than the coupon
◍ What is the conventional wisdom about making a profit on property?.
Answer: Conventional wisdom is you make your profit when you buy a
, property, not when you sell it.
◍ Are bonds issued by our govt considered risky?.
Answer: No
◍ What is dollar cost averaging?.
Answer: Investing a set amount of money in shares of stock on a regular
time schedule, regardless of the price of the shares at the time
◍ Fees on prepaid cards.
Answer: Activation fees up to $39.95Inactivity feesFees to load money onto
the cardFees if you do not load any money, or at least a minimum amount
onto the card each monthFees to check balance informationFees to use an
ATM for cashFees for using a check to close an account
◍ Differences between an HMO and a PPO?.
Answer: Unlike an HMO, PPOs allow you to choose from a group of
providers who have their own contracts with your insurance company to
provide services at a predetermined price. The medical provider must accept
these amounts as full payment, which is usually significantly discounted
from what you or I could get on our own. (263)
◍ What is a standard deduction on your tax return?-where's the proof?.
Answer: Single -12,000 on taxMarried/filing jointly-24,000There is no proof
or records necessary
◍ Are 401(k) plans set up as automatic payroll deduction?.
Answer: yes
◍ Whats the max interest they can charge on credit card account?.
Answer: No max interest some can come over 25% or more
◍ In a 401(k) plan, is diversification required by your employer?.
Answer: No, One requirement of a 401(k) plan is that the employer
designates the investments from which employees are allowed to select.
This limits the number of choices available to plan participants.
◍ What is the invoice price and is it the real price that the dealer paid?.
