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1. Which of these are ways that identity theft can happen? Check all that apply.

A. by forgery
B. by phishing
C. by fraud
D. by financial engineering
E. by social engineering

2. Which statement best describes the role of a credit agency?

A. It tracks the use of credit for lenders.
B. It predicts future earning potential for lenders.
C. It teaches how to make smart financial decisions.
D. It shows how saving money makes financial sense.

3. Which of these affect real investment value? Check all that apply.

A. fees and expenses
B. inflation
C. nominal interest rate
D. pretax returns
E. taxes

4. Changes in monetary policy occur when the Federal Reserve

A. adjusts business laws to affect the money supply.
B. changes taxation levels to affect the economy.
C. changes spending levels to affect the economy.
D. adjusts interest rates to affect the money supply.

5. Which questions should Robert ask himself before investing the $10,000 he inherited? Check all that apply.

A. How am I protected as an investor?
B. Are my friends investing in a similar way?
C. What guarantees are in place so I make money?
D. What taxes will I have to pay on this investment?
E. How do the risks compare to the potential gains?
F. What are the chances that the investment will fail?

User Reshure
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6.0k points

2 Answers

6 votes

Answer:

1,2,3,5

Step-by-step explanation:

User Noah Clark
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5.6k points
3 votes

Answer:

1- The correct answers are 1, 2, 3 and 5. Identity theft can happen through forgery, phishing, fraud, or social engineering.

2- The correct answer is A. Credit agencies track the use of credit for lenders.

3- The correct answers are 1, 3 and 5. Real investment value is affected by fees and expenses, nominal interest rate if it is bought by a bank loan, and taxes.

4- The correct answer is D. Changes in monetary policy occur when the Federal Reserve adjusts interest rates to affect the money supply.

5- The correct answers are A, C, D, E an F.

Step-by-step explanation:

1- Identity theft is the appropriation of a person's identity: impersonating that person, in general to access certain resources or obtaining credits and other benefits on behalf of that person.

There are several methods to obtain personal information data that include the mentioned options:

-false emails: this technique allows an attacker to pass through a real organization, bank or company to obtain information that guarantees access to a resource that the person use in that organization, bank or company.

-personal: Any malicious person could obtain information that they heard or saw on their behalf that guarantees access to some valuable resource.

-organized attack: any attacker could try to overcome the security of a bank, company or organization to obtain personal information from clients and then access some resource of that company.

-attack on online storage servers: the attacker can try to obtain data from a data storage server in the cloud; obtaining passwords, ID, bank accounts, etc.

2- A credit agency is a company that collects and stores various types of information about people and their financial accounts and history. They rely on this information to create their credit reports and credit scores.

3- An investment is called real when the money goes to acquire productive or tangible assets such as equipment, properties and raw materials. In this cases, the value of the product or property is affected by the costs that this brings with it after the purchase, that is, taxes, interests, expenses and fees. The higher the cost of maintaining the investment, the lower the sale price, because its profitability will be lower.

4- Monetary policy is a branch of economic policy that uses the amount of money as a variable to control and maintain economic stability. It includes the decisions of the monetary authorities referring to the money market, which modify the amount of money or the interest rate.

There are three tools to carry out a monetary policy:

-Open Market Operations. When the Fed buys financial instruments, it puts more money into circulation. With more money available, interest rates tend to decrease, and so more money is borrowed and spent. When the Fed sells financial instruments, it takes the money out of circulation, causing interest rates to rise, making loans more expensive and, therefore, less accessible.

-Regulate the amount of reservations. A member bank lends most of the money deposited in it. If the Fed says they must keep a larger reserve, the amount of money a bank can lend decreases, making the loans more inaccessible and causing increases in the interest rate.

-Discount Rates. Change the interest rate at which banks can borrow from the Federal Reserve System. Member banks can request short-term loans from the FED. The interest charged by the Fed to banks for loans is called Discount Rate, which is higher than the interest rate of commercial banks. This has an effect on the amount of money that banks overdraw.

5- Robert should deeply analyze his decision before carrying out an investment operation. Basically, he should be internalized about the risks, his protection against these risks, his ability to respond in case of loss, the experiences of other investors and the theoretical profitability of the investment.

User Ariela
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5.8k points