Unit 3- Participation Questions - PFI 2301

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School

Texas Tech University *

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Course

2301

Subject

Finance

Date

Apr 3, 2024

Type

pdf

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Question 1 Investing in yourself is also known as: Financial capital investment. Human capital investment. Stock market investment. Bond market investment. Question 2 When you buy a bond, you become a(n) _______, and when you buy a stock you become a(n)________. owner, lender passive investor, active investor active investor, passive investor lender, owner Question 3 Which of the following provides retirees with a guaranteed payment from their employer for the remainder of the retirees' life? Pension plan. Investment plan.

Retirement plan. Defined contribution plan. Question 4 Your employer offers a 401(k) match of 50% of your contribution up to 6% of your gross salary. Your gross salary is $90,000/year and you plan to contribute $5,000/year. How much free money are you leaving on the table? $600 $300 $200 $1,000 Question 5 Which of the following refers to stocks that focus on stock price appreciation? Growth stock. Income stock. Both growth and income stocks. Private stock. Question 6 The best time to negotiate salary and other perquisites with a potential employer is:

during the phone call to schedule your interview time. during the first interview. after you have signed an employment contract. after you receive a job offer. Question 7 An investment company that pools funds obtained by selling shares to investors is known as a: stock exchange mutual fund muni union none of these Question 8 During the post-production stage of life, you: determine your career goals determine your human capital advantage develop plans for financial capital to continue to fund life goals find employment opportunities in line with career goals Question 9

How much money would you need to set aside monthly to have $1,500,000 at retirement if you started saving when you were 31, wanted to retire when you were 60, and could get an interest rate of 6.7%? $2,750 $1,409 $3,983 $1,507 Question 10 You just invested $6,500 into the stock market. If the expected annual return on stocks is 7.5% and the expected annual return on a checking account is 0.5%, how much MORE can you earn on the stock investment in 45 years as compared to saving these $6,500 in a checking account? $168,381.45 $150,987.35 $160,245.92 $132,941.22 Question 11 How is the money taxed that is withdrawn from a Roth IRA during your retirement? It's not taxed. It's taxed as capital gains. It's taxed as ordinary income. It's tax-deferred and not taxed in the year that it is withdrawn.

Question 12 During the pre-production stage of life, you work to transform human capital into financial capital. develop plans for financial capital to fund life goals. determine your human capital advantage and invest in yourself. find employment opportunities in line with career goals. Question 13 Mark is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates costs to attend Texas Tech for 4 years including room and board are $20,000 per year. He also assumes tuition costs will rise by 3.5% per year. How much is a 4-year degree going to cost Mark? $84,298.86 $1,314,002.83 $92,183.27 $7,231,158.87 Question 14 The purpose of an investment is: To transfer current consumptions into the future. To earn more money than people around you. To transfer future consumption into your current stage. To borrow money when expenses are larger than income. Question 15

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