Business management

Business management Exchange Traded Funds ("ETF") provide all the following investment features except: Dividends Diversification Net asset value You Answered Liquidity - Net asset value According to the current tax code, you can give the following without having to pay a gift tax $15,000 a year to as many people as you want the above Pay hospital bills for a student directly to the hospital Pay student tuition directly to the institution - All the above The "bid" of a stock is The lowest price a buyer is willing to sell The highest price a buyer is willing to pay The lowest price a seller is willing to sell The "last" price the stock traded - The highest price a buyer is willing to pay Stock options May be in the money May be given to employees for free May be out of the money All the above - All the above Which of the following is not an eligible itemized deduction? Taxes you paid Medical and Dental expenses Number of dependents Gifts to charity - Number of dependents Stock options May be subject to capital gains or losses after exercised May be worthless All the above May be subject to payroll taxes when exercised - All the above The "ask" of a stock is The "last" price the stock traded The lowest price a buyer is willing to sell The lowest price a seller is willing to sell The highest price a buyer is willing to pay - The lowest price a seller is willing to sell Losses in excess of gains in any one year can be used to reduce taxable income up to $3,000 $2,000 $4,000 $1,000 - $3,000 Which of the following statements about partnerships is false? Partnerships issue a K-1 to each partner When a partner dies, the partnership terminates Partnerships do not pay federal taxes Limited partners have limited liability - When a partner dies, the partnership terminates The quote on ABC stock is "bid" $25.75 and "ask" $26.05. If you enter a market order to buy, the price you would pay will be: $25.90 $26.05 $25.50 $25.75 - $26.05 In a partnership, each partner and the IRS receives a K-1 1099 W-2 None of the above - K-1 When investing in stocks, I do not recommend: Stop orders Selling short All the above Day trading - All the above A sole proprietor reports business profits or losses to the IRS by filing a Sole proprietor business tax form K-1 1099 Form Form 1040 Schedule C - Form 1040 Schedule C Municipal bonds may be secured by All the above Revenue Assessments Taxes - All the above A sole proprietorship is Has limited liability None of the above Continues after the owner dies Owned by two or more people - None of the above The IRS requires those who have significant income not subject to withholding tax to pay Additional excise taxes Quarterly estimates of additional taxes owed Quarterly estimates of additional tax credits All wash sales - Quarterly estimates of additional taxes owed Adjusted Gross Income ("AGI") is what you get after subtracting from total income, specific deductions except one of the following Charitable deductions Student load interest Contributions paid into a retirement plan Tuition and fees deduction - Charitable deductions Bonds with a face value of $1,000 selling in the open market could be selling at a: Any of the above Face value (par) Premium Discount - Any of the above Which form will your employer require you to complete upon hiring? W-2 K-1 1099B W-4 - W-4 Shares of a closed end fund may trade At net asset value Below net asset value Above net asset value All of the above - All of the above AAA shares are "bid" at $15.24 and the "ask" is $15.44. If you enter a limit order to sell at $15.34 you will sell the shares at: $15.24 $15.44 $15.34 None of the above - None of the above Short term capital gains are taxed as: Ordinary income Long term capital gains Short term losses Wash sales - Ordinary income The Rule of 72 is used to estimate None of the above How long will it take you to earn 50%? How long it will take you to out-earn inflation? How long it will take to double your money? - How long it will take to double your money? The "Rule of Fred" is All the above I get paid first I get paid first I get paid first - All the above Stock grants are gifts of stock which may come with: All the above Restrictions Vesting requirements Potential tax obligations - All the above Form 1040 is used to report: Only long term losses in excess of 10% of AGI Short term and long-term capital gains and losses Mid-term capital gains and losses Only short term losses in excess of 10% of AGI - Short term and long-term capital gains and losses Budgeting or putting together a spending plan enables the following except Helps you to live within your means Lets you manage your money Enables your money to manage you Starts the process of financial planning - Enables your money to manage you Long term capital gains are taxed at a maximum rate of 33% 15% 20% 37% - 20% Bonds are rated as to quality by: All of the above Investment banking firms States, counties and cities Independent rating agencies - Independent rating agencies Earned income includes all the following except Wages Commissions Insurance proceeds Salaries - Insurance proceeds Corporate dividends are determined by: A vote of shareholders The board of directors The management team The chief executive offier - The board of directors "Yield" is the return earned by a bond. Which of the following is not a bond yield? Principal yield Current yield Coupon yield Yield to maturity - Principal yield Stock options are granted by: Board of directors Investment bankers Founding shareholders Management - Board of directors Unearned income includes all the following except: Interest Dividends Capital gains Capital losses - Capital losses The last trade of XYV shares was at $25.50. If you enter a market order to sell your shares of XYV, you will sell them for: The "bid" price None of the above $25.50 The "ask" price - The "bid" price Interest income is taxed the same as: Wash sales Ordinary income Long term capital gains Short term losses - Ordinary income By comparing the current price earnings ratio of a stock to its growth rate, we can determine its: The credit-to-debt ratio Future Price/Earnings Ratio The projected price-to-sales ratio The PEG rate - The PEG rate Which of the following is an excise tax? State property tax State sales tax Property tax Highway use tax - Highway use tax The net asset value (NAV) of a closed end fund is determined by: Multiplying the earnings per share by the number of shares The board of directors The yield on its dividend None of the above - None of the above Employers withhold from employees' paychecks the following items except Income from a sole proprietorship Medicare Social Security Federal income taxes - income from a sole proprietorship Interest on corporate bonds is Tax deductible to the corporation Taxed as ordinary income to the bondholder All of the above Fixed at the time of issue - All of the above In a partnership the general partner: Chairs the board of directors Has unlimited liability Has limited liability Pays state and federal income taxes - Has unlimited liability If you buy 200 shares of stock in a taxable account for $22,500 on October 1st, sell them for $18,000 on October 12th, and buy back 200 shares of the same stock on October 28th for $19,000, what would be your reportable tax loss? $4,500 None of the above $3,500 $2,500 - None of the above Qualified stock dividends are taxed at a maximum rate of 33% 37% 15% 20% - 20% Which of the following sources of income is not taxable? Tips Child Support Commissions Bonuses - Child Support When interest rates rise, the price of existing bonds in the market place will Decrease Increase Trade at face value Stay the same - Decrease Common tax credits Are worth less than tax deductions Decrease earned income Are worth more than tax deductions Increase earned income - Are worth more than tax deductions Dividends paid by corporations are taxed Three times Twice Tax free Once - Twice Which of the following is not eligible for a 20% pass-through tax deduction? Partnership C-corporation Proprietorship Limited liability corp. (LLC) - C-corporation Profits from partnerships are taxed as: Qualified dividends A maximum 20% Ordinary income Long term capital gains - Ordinary income One way to compute the value investors are currently paying for a stock ("P/E" ratio) is to: None of the above Compare the market price of a single share of stock with what a single share earned in profits the prior twelve months Compare the market cap of the company to the market cap of a year ago Compare the market price of a single share of stock with the market price of a share the prior year - Compare the market price of a single share of stock with what a single share earned in profits the prior twelve months Bonds issued by corporations are secured by the Corporation's assets FDIC Corporation's common stock Board of Directors - Corporation's assets Which of the following is not guaranteed by the FDIC? Certificates of deposit Money market funds Checking accounts Savings accounts - Money market funds Bonds issued by the federal government are guaranteed by: The United States of America The North American Monetary Fund Each state individually and proportionally The International Money Fund - The United States of America Which of the following is not a reason for an IRS audit? Not reporting all taxable income Failure to sign a tax return Mathematical errors Low credit scores - Low credit scores The wash sale rule is designed to Disallow certain profits in the trading of securities Enable long term capital gains to become short term capital losses Disallow certain losses in the trading of securities Enable short term capital gains to become long term capital gains - Disallow certain losses in the trading of securities Which one of these statements is not true? Compounding can work against you when you borrow money instead of saving money. Saving money needs to become a priority. Over your lifetime, taxes are probably your biggest single expense. In a partnership, dividends to the partners are taxed twice. - In a partnership, dividends to the partners are taxed twice. If you are in a 37% tax bracket, would you be better off buying a corporate bond paying 7.25%, or a tax free municipal bond paying 5.0%, if they were of equal quality? Corporate bond Municipal bond It would make no difference All the above - Municipal bond A business owned by one person with unlimited liability is: A sole proprietorship A limited liability corporation A partnership A corporation - A sole proprietorship Which type of income must be reported to the IRS: Ordinary dividends All the above Interest Foreign Accounts and Trusts - All the above Video: As they get closer to retirement, most people should invest an increasing percentage of their portfolio in bonds, and a decreasing percentage in stocks True False - True Limited liability corporations are popular because of their high dividend payouts True False - False Video: From an asset allocation perspective, traditional pensions (also known as defined benefit pensions) are more like investments in stocks than investments in bonds True False - False Video: Even if you have debts, you should always contribute enough to your 401(k) plan to get your entire employer match True False - True Video: Diversification reduces the chance of a huge loss in your portfolio True False - True By definition, a proprietor can borrow money to help get the business going, but cannot sell shares in the business True False - True Exchange traded funds track an index and trade like a stock True False - True Tax deductions are worth more than tax credits True False - False State taxes, local taxes, and your residential property tax are all tax-deductible up to a total amount of $20,000 True False - False Video: Which of the following is not true about the S&P index funds? All S&P 500 index funds are well-diversified. S&P 500 index funds tend to trade (i.e., buy and sell stocks) less actively than actively managed funds that invest in many of the same stocks All S&P 500 index funds charge low fees. Ignoring fees, all S&P 500 index funds earn nearly the same return each year. - All S&P 500 index funds charge low fees. Video: Some risky investments have high expected returns. Some don't True False - True US government bonds are exempt from federal taxes True False - False Closed end funds listed on an exchange trade at their NAV True False - False Borrowing money to buy stocks is not recommended True False - True Video: The best forecast for next year's stock market performance is this year's performance True False - False "Frugal" means spending freely regardless of value, needs and benefits True False - False Accounts at credit unions are guaranteed by an agency of the federal government up to $250,000 True False - True In a corporate liquidation or bankruptcy, the common shareholders are usually the last to get paid True False - True Interest on corporate bonds is tax free but subject to the AMT True False - False If a child is away to college, he/she may still be claimed as a temporary dependent for tax purposes True False - True The purpose of the W-4 form is to let your employer know how much to withhold from each paycheck for personal income taxes True False - True Interest earned on corporate bonds is tax deductible True False - False You cannot declare a tax loss on a security if you purchase the identical security within 30days before or after the sale True False - True If your standard deduction exceeds your itemized deductions, you must pay tax on the difference True False - False Limit orders protect you from losing money on a stock True False - False Estate taxes are paid by the beneficiary of the estate, while inheritance taxes are paid by the estate True False - False Exercising a stock option creates a taxable event True False - True Video: Diversification eliminates broad economic risks in your portfolio True False - False A dividend investor focuses on stocks that pay above average dividends True False - True Interest on a new home mortgage is tax deductible up to a $750,000 mortgage loan amount True False - True Congress eliminated any marriage tax penalty in 2013 True False - False When a sole proprietor dies, the business goes to his/her heirs tax free True False - False Capital losses may be used to offset capital gains for tax purposes True False - True Video: The goal of an S&P index fund is to match the performance of the S&P index True False - True Video: It is easier to determine whether a company's stock will outperform the market next year, than to determine whether the company is well run True False - False Low price stocks will make you more money than high price stocks True False - False Video: Ignoring transactions costs, if the buyer of a futures contract gains a dollar, the seller of that contract must lose a dollar True False - True The difference between stocks and bonds is stocks make no promise to pay a dividend or guarantee principal True False - True Video: If the market drops 30%, everyone knows that it is about to bounce back True False - False Question 401 / 1 pts Video: ETF's (exchange traded funds) are always well-diversified True False - False By dollar-cost-averaging, you will buy more shares at lower prices. True False - True When interest rates decline, issued bonds increase in value True False - True A good dividend pays less than the interest rate on a 10-year treasury bond True False - False The current yield of a bond may be higher or lower than the coupon yield True False - True Video: Of the following options which would be the most appropriate place to keep a security fund (also called an emergency fund or rainy day fund)? In the stock market or a certificate of deposit (CD) In a locked box under your bed In a savings account or a money market fund In your checking account - In a savings account or a money market fund Market cap is the total market value investors are placing on the stock of a company at a moment in time True False - True Compounding means earning interest on interest True False - True Video: The best time to decide how much to save for retirement each month is at the end of the month when you can see how much money you have left over from the month's paycheck True False - False Credit unions are non-profit organizations owned by their members True False - True The IRS does not recognize same-sex marriages for tax purposes True False - False