BUSI 352 Mid Term Test Final Review
BUSI 352 Mid Term Test Final Review
• Question 1
2 out of 2 points
Michael has been dollar cost averaging in a mutual fund by investing $2,000 at the beginning
of every quarter for the past 7 years. He earns an average annual compound return of 11% on
this investment, compounded quarterly. How much is the fund worth today?
Selected Answer: $84,996.80.
• Question 2
2 out of 2 points
Which one of the following statements is wrong?
Selected
The EFC calculation, which is based on a student’s ACT score, is used to
Answer:
determine eligibility and / or award amount for a Pell Grant.
• Question 3
2 out of 2 points
Which of the following is/are incorrect regarding the Humanistic Paradigm?
Selected
The advisor needs a philosophical stance that humankind is basically bad and
Answer:
that people do not have the inherent capability of self-direction and growth
under the right set of circumstances.
• Question 4
2 out of 2 points
Quantitative information that is gathered in the data gathering process might include banking
and investment information, tax information, financial statements and attitudes regarding risk
tolerance and charitable funding.
Selected Answer: False
• Question 5
,BUSI 352 Mid Term Test Final Review
2 out of 2 points
Which of the following are premises in Traditional
Finance? Selected Answer: Both c and d.
• Question 6
2 out of 2 points
You have been working with your client, Alex, for about 4 months. So far, you have
developed a mission statement, goals, and objectives with Alex. You are now using Alex’s
mission statement to construct a plan. Which approach to financial planning are you utilizing?
Selected Answer: Strategic Approach
• Question 7
2 out of 2 points
Which of the following is not necessary to identify a client’s life cycle position?
Selected Answer: Attitudes and/or beliefs.
• Question 8
0 out of 2 points
Jerry and Jenny are 25 years old and plan on retiring at age 67 and expect to live until age
100. Jenny currently earns $150,000 and they expect to need $150,000 per year in today’s
dollars in retirement. Jerry is a stay at home dad. They also expect that Social Security will
provide $40,000 of benefits in today’s dollars at age 67. Jenny has been saving $5,000
annually in her 401(k) plan. Their son, Jazz, was just born and is expected to go to college in
18 years. They want to save for Jazz’s college education, which they expect will cost $20,000
in today’s dollars per year and they are willing to fund 5 years of college. They were told that
college costs are increasing at 7% per year, while general inflation is 3%. They currently
have
$100,000 saved in total and they are averaging a 10% rate of return and expect to continue to
earn the same return over time. Based on this information, what should they do?
,BUSI 352 Mid Term Test Final Review
Selected Answer: They are doing just fine and should continue doing what they are doing.
• Question 9
2 out of 2 points
An example of internal data is?
Selected Answer: The client’s goals.
• Question 10
2 out of 2 points
What is one of the primary differences between a Coverdell Education Savings Account and
529 Savings Plan?
Selected Answer: A Coverdell can be used for private elementary, middle or high school.
• Question 11
2 out of 2 points
A savings rate between 10 and 13 percent of one’s gross pay is almost always sufficient to
meet most financial goals.
Selected Answer: False
• Question 12
2 out of 2 points
Which of the following is most likely not classified as an investment amount on the
Statement of Financial Position?
Selected Answer: Valuable antique furniture.
• Question 13
2 out of 2 points
Which of the following theories or equations govern the premises of Traditional
Finance: 1- Bottom Line Theory.
2- Prospect Theory.
3- The Behavioral Asset Pricing Model.
, BUSI 352 Mid Term Test Final Review
Selected Answer: None of the above.
• Question 14
2 out of 2 points
Susan’s annual salary is $80,000. She contributes 10% of her salary to her 401(k) plan; and
her employer contributes 5% of her salary to a profit sharing plan. She also contributes
$2,500 per year to an IRA. What is Susan’s approximate savings
rate? Selected Answer: 18%.
• Question 15
2 out of 2 points
All of the following statements are true, except:
Selected
The Lifetime Learning Credit is only available for the first two years of
Answer:
post-secondary education.
• Question 16
2 out of 2 points
Jill would like to plan for her son’s college education. She would like for her son, who was
born today, to attend college for 5 years, beginning at age 18. Tuition is currently $12,000
per year and tuition inflation is 6%. Jill can earn an after-tax rate of return of 8%. How much
must Jill save at the end of each year, if she wants to make the last payment at the beginning
of her son’s first year of college?
Selected Answer: $4,406.75.
• Question 17
2 out of 2 points
All of the following statements concerning educational fund 529 Savings Plans are correct
EXCEPT:
Selected The primary benefit of a 529 Savings plan is the state income tax
BUSI 352 Mid Term Test Final Review
• Question 1
2 out of 2 points
Michael has been dollar cost averaging in a mutual fund by investing $2,000 at the beginning
of every quarter for the past 7 years. He earns an average annual compound return of 11% on
this investment, compounded quarterly. How much is the fund worth today?
Selected Answer: $84,996.80.
• Question 2
2 out of 2 points
Which one of the following statements is wrong?
Selected
The EFC calculation, which is based on a student’s ACT score, is used to
Answer:
determine eligibility and / or award amount for a Pell Grant.
• Question 3
2 out of 2 points
Which of the following is/are incorrect regarding the Humanistic Paradigm?
Selected
The advisor needs a philosophical stance that humankind is basically bad and
Answer:
that people do not have the inherent capability of self-direction and growth
under the right set of circumstances.
• Question 4
2 out of 2 points
Quantitative information that is gathered in the data gathering process might include banking
and investment information, tax information, financial statements and attitudes regarding risk
tolerance and charitable funding.
Selected Answer: False
• Question 5
,BUSI 352 Mid Term Test Final Review
2 out of 2 points
Which of the following are premises in Traditional
Finance? Selected Answer: Both c and d.
• Question 6
2 out of 2 points
You have been working with your client, Alex, for about 4 months. So far, you have
developed a mission statement, goals, and objectives with Alex. You are now using Alex’s
mission statement to construct a plan. Which approach to financial planning are you utilizing?
Selected Answer: Strategic Approach
• Question 7
2 out of 2 points
Which of the following is not necessary to identify a client’s life cycle position?
Selected Answer: Attitudes and/or beliefs.
• Question 8
0 out of 2 points
Jerry and Jenny are 25 years old and plan on retiring at age 67 and expect to live until age
100. Jenny currently earns $150,000 and they expect to need $150,000 per year in today’s
dollars in retirement. Jerry is a stay at home dad. They also expect that Social Security will
provide $40,000 of benefits in today’s dollars at age 67. Jenny has been saving $5,000
annually in her 401(k) plan. Their son, Jazz, was just born and is expected to go to college in
18 years. They want to save for Jazz’s college education, which they expect will cost $20,000
in today’s dollars per year and they are willing to fund 5 years of college. They were told that
college costs are increasing at 7% per year, while general inflation is 3%. They currently
have
$100,000 saved in total and they are averaging a 10% rate of return and expect to continue to
earn the same return over time. Based on this information, what should they do?
,BUSI 352 Mid Term Test Final Review
Selected Answer: They are doing just fine and should continue doing what they are doing.
• Question 9
2 out of 2 points
An example of internal data is?
Selected Answer: The client’s goals.
• Question 10
2 out of 2 points
What is one of the primary differences between a Coverdell Education Savings Account and
529 Savings Plan?
Selected Answer: A Coverdell can be used for private elementary, middle or high school.
• Question 11
2 out of 2 points
A savings rate between 10 and 13 percent of one’s gross pay is almost always sufficient to
meet most financial goals.
Selected Answer: False
• Question 12
2 out of 2 points
Which of the following is most likely not classified as an investment amount on the
Statement of Financial Position?
Selected Answer: Valuable antique furniture.
• Question 13
2 out of 2 points
Which of the following theories or equations govern the premises of Traditional
Finance: 1- Bottom Line Theory.
2- Prospect Theory.
3- The Behavioral Asset Pricing Model.
, BUSI 352 Mid Term Test Final Review
Selected Answer: None of the above.
• Question 14
2 out of 2 points
Susan’s annual salary is $80,000. She contributes 10% of her salary to her 401(k) plan; and
her employer contributes 5% of her salary to a profit sharing plan. She also contributes
$2,500 per year to an IRA. What is Susan’s approximate savings
rate? Selected Answer: 18%.
• Question 15
2 out of 2 points
All of the following statements are true, except:
Selected
The Lifetime Learning Credit is only available for the first two years of
Answer:
post-secondary education.
• Question 16
2 out of 2 points
Jill would like to plan for her son’s college education. She would like for her son, who was
born today, to attend college for 5 years, beginning at age 18. Tuition is currently $12,000
per year and tuition inflation is 6%. Jill can earn an after-tax rate of return of 8%. How much
must Jill save at the end of each year, if she wants to make the last payment at the beginning
of her son’s first year of college?
Selected Answer: $4,406.75.
• Question 17
2 out of 2 points
All of the following statements concerning educational fund 529 Savings Plans are correct
EXCEPT:
Selected The primary benefit of a 529 Savings plan is the state income tax
