FINC 321 Finals Exam (2016 version)/FINC 321 Finals Exam (2016 version)

FINC 321 Finals Exam (2016 version)

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Question

1. Inflation can cause difficulty in many ways. Which group would have the greatest problem

during periods of high inflation that last several years?

a.) Older, working couples saving for retirement.

b.) Older people living on fixed retirement income.

c.) Young couples with no children who both work.

d.) Young working couples with children.

2. Which of the following is true about sales taxes?

a.) The national sales tax percentage rate is 6%.

b.) The federal government will deduct it from your paycheck.

c.) You don’t have to pay the tax if your income is very low.

d.) It makes things more expensive for you to buy.

3. Rebecca has saved $12,000 for her college expenses by working part-time. Her plan is to start

college next year and she needs all of the money she saved. Which of the following is the safest

place for her college money?

a.) Locked in her closet at home.

b.) Stocks.

c.) Corporate bonds.

d.) A bank savings account.

4. Which of the following types of investment would best protect the purchasing power of a

family’s savings in the event of a sudden increase in inflation?