Question 21 The ability to convert financial resources into usable cash with eas

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Question 21 The ability to convert financial resources into usable cash with ease is referred to as: bankruptcy. liquidity. investing. saving. opportunity cost. 2 points Question 22 A cost associated with owning a home is: renters insurance the security deposit annual appreciation of the property property taxes the interest lost on the security deposit 2 points Question 23 Which of the following would be considered a long-term liability? A charge account payment A mortgage An installment loan An amount due for taxes The amount due on a credit card 2 points Question 24 A load fund is a mutual fund in which investors pay a commission (or sales charge) every time they purchase shares. that can be loaded into a great big dump truck. that is loaded with good stocks. that smart investors will want to load up on in their portfolio. all of the above.

Explanation / Answer

Q 21 The answer is “liquidity”.

The ability to convert financial resources into usable cash with ease is called liquidity.

Bankruptcy is a situation where a person is not able to pay its debts and the person is declared as bankrupt through court order. Investing is the putting the amount of saving for financial schemes. Saving is the part of income which is not spent. Opportunity cost refers to the profit which a person would have received if another option would have been chosen.

Q 22 The answer is ‘property taxes’.

The cost associated with owning a home is property taxes.

Renter’s insurance provides protection to the personal property in the rented house. Security deposit is the amount given by the renter to the landlord at the time of new deal. The interest on security deposit is also associated with the rented apartment. The annual appreciation of property is ascertained when the sale price exceeds the purchase price of house. Property tax is the annual amount paid by the owner to the government.

Q 23 The answer is ‘mortgage’.

The long term liability is mortgage.

Mortgage is the using of land and building as a guarantee for raising a loan. Charge account payment is for the purchase of goods and for short term. Instalment loan is repaid with scheduled number of monthly payments and it is for few months also. The amount due for taxes is to be paid in the short span of time. Also, the credit card due amount can’t be extended beyond a certain time limit.

Q 24 The answer is ‘that can be loaded into a great big dump truck’.

The load fund need not necessarily provide the good stocks. It adds up the expense ratios. The smart investors will use no load funds instead of load funds.

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