ECO 110 Week 8 Adaptive Test

 

How much equity would Phil have in his home based on the following information:
Purchased price of $425,000
Fair market value of $432,000
20% down payment
Has made $15,000 in principal payments

1. $85,000
2. $100,000
3. $107,000
4. $15,000

 

 

Savannah bought her house right before the financial crisis began in 2007. The house cost $389,000 and she financed 90% of the purchase price. During the financial crisis, Savannah lost her job and could no longer afford to pay her mortgage. The value of her house started to drop to below what she still owed on her mortgage. Eventually, the bank seized her house and sold it for less than what was owed on the mortgage, and Savannah had to pay the difference. Savannah experienced a

1. long sale.
2. above-water mortgage.
3. short sale.
4. foreclosure.

 

 

Q 8.27:

 

Five years ago, Sammy purchased a house for $340,000. Today the market value of the house is $420,000. Sammy still owes a balance of $220,000 on the mortgage. What is her equity in the house?

• A: 

 

$120,000. 

• B: 

 

$220,000. 

• C: 

 

$200,000. 

• D: 

 

$0. 

 

https://hwacer.com/Tutorial/eco-110-week-8-adaptive-test/

 

What is the dealer’s spread on an item with a bid price of $75 and an ask price of $90?

• A: 

 

$75. 

• B: 

 

$15. 

• C: 

 

$90. 

• D: 

 

$165. 

 

 

Two years ago, Sophia purchased a piece of art for $5,000. She decided that she needs some money and approached a dealer to sell the art for her. The dealer charges 25% commission. At auction, they were able to sell the art for $5,500. What was Sophia’s net profit or loss?

• A: 

 

Net loss of $1,375. 

• B: 

 

Net loss of $875. 

• C: 

 

Net gain of $500. 

• D: 

 

Net loss of $1,250. 

 

Jay owns several dozen gold bars. His plan is to sell them at some point and hopefully generate a hefty profit. Jay could best be described as a(n)

• A: 

 

hobbyist. 

• B: 

 

investor. 

• C: 

 

collector. 

• D: 

 

dealer. 

 

 

Which investor is probably the best protected with their investments?

• A: 

 

Chey, who invests her savings in two index mutual funds that invest in small and large U.S.-based companies through a new online broker. 

• B: 

 

James, who recently inherited $1 million in certificate shares of Microsoft. 

• C: 

 

Thomas, who has an S&P 500 Index ETF and a bond market ETF through an established brokerage firm with SIPC. 

• D: 

 

Raymond, who invested all of his savings in a new start-up run by his brother-in-law. 

 

 

Mark is using a fee-only financial planner who charges a typical asset-based fee. He currently has $250,000 in assets being managed. What is his annual fee?

• A: 

 

$2,500. 

• B: 

 

$25,000. 

• C: 

 

$25. 

• D: 

 

$250. 

 

 

Marie is looking for a financial adviser to assist her in making investment decisions. Which factor should NOT be used to determine which adviser to hire?

• A: 

 

The least expensive adviser. 

• B: 

 

The adviser is willing to share references. 

• C: 

 

The adviser you are comfortable speaking with and asking questions to. 

• D: 

 

The adviser holds credentials related to the field. 

Julio has decided to invest in five different funds of stocks and bonds. Now he must decide what percent of his portfolio is assigned to each fund, a process known as

•  

A

 

investing. 

•  

B

 

diversification.