QUESTION 31

A fixed amount that is deducted for each person claimed on a tax return

		Capital Loss
		Adjusted Gross Income
		Head of Household
		Personal Exemption

2 points

QUESTION 32

Tax credit for paid tuition and fees for undergraduate, graduate, and professional degrees

		Hope Credit
		Smart-Person Credit
		Lifetime Learning Credit
		Graduation Credit

2 points

QUESTION 33

Diversifying stocks among different _________ makes your portfolio less risky.

		countries
		size
		industry
		all of the above

2 points

QUESTION 34

An increase in the value of a property due to changes in the market

		Appreciation
		Appraisal
		Depreciation
		Capital Loss

2 points

QUESTION 35

Mary Beth has just applied for a credit card that offers a 6 percent interest rate for 12 months. At the end of 12 months, the interest rate will be "prime plus 9 percent." Which of the following characteristics does this card have?

		variable interest rates
		teaser rates
		co-branded
		both variable interest rates and teaser rates

2 points

QUESTION 36

A secured loan requires

		collateral
		a cosigner
		an excellent credit rating
		either collateral or a cosigner

2 points

QUESTION 37

A short term fixed rate and then the entire balance is due

		Appraisal
		Balloon mortgage
		Appreciation
		Loan to Value (LTV)

2 points

QUESTION 38

The PITI acronym in mortgage lending stands for

		principal, interest, taxes and insurance
		principal, investment, taxes and interest
		principal, interest, taxes and investment
		principal, insurance, taxes and interest

2 points

QUESTION 39

You are an astronaut on a deep space mission. You are in suspended animations for 40 years before you return to earth. Your parents have died, but, since you were the favorite son (since you were an astronaut and all), they left you first choice over your ne'er-do-well brother, Sigmund. Your choices are your parent's Roth IRA or their traditional IRA. The Roth IRA has $2 million in it. The traditional IRA has $2.5 million in it. Your income is well within the 30% tax bracket and you are old enough to withdrawl the money without penalty. Assume that you will withdrawl all the money at once. Which IRA would you choose and why?

		The Roth IRA, because it provides you $2 million tax-free
		The traditional IRA, because it has $500,000 more in it
		It doesn't matter, because both provide the same after-tax income
		Not enough information provided

2 points

QUESTION 40

Jake invested $800 in an IRA. If he has a 15% marginal tax rate and the contribution is tax deductible, Jake will

		pay $120 more in taxes
		pay $120 less in taxes
		receive no change to his tax liability
		have $800 less in adjusted gross income