Question 1

A home is a good asset to have when applying for a loan.

Accepted Answer

A) True 
 B)False

Question 2

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

Accepted Answer

A)  two months
B)  six months
C)  one year
D)  three yearsE) B) and D)
F) C) and D)

Question 3

Excessive debt is as much a problem of young consumers as it is of other age groups.

Accepted Answer

A) True 
 B)False

Question 4

Guaranteed replacement cost insurance coverage provides the insured with the depreciated cost of assets.

Accepted Answer

A) True 
 B)False

Question 5

Most people find it relatively easy to live frugally.

Accepted Answer

A) True 
 B)False

Question 6

It is usually better to use any money left after paying monthly bills to pay off debts that carry high interest rates rather than putting that money into a savings account.

Accepted Answer

A) True 
 B)False

Question 7

Managing the finances of a household is similar to managing the finances of a small business.

Accepted Answer

A) True 
 B)False

Question 8

Petulia has been following the stock market,and has noticed that it has generally been declining for the last several weeks.Many of her friends have sold stock,but Petulia looks at this situation as a good opportunity to buy.Petulia's views are consistent with the ___________ approach to investing in the stock market.

Accepted Answer

A)  contrarian
B)  revisionist
C)  arbitrarian
D)  negativistE) A) and B)
F) A) and C)

Question 9

A Roth IRA offers employees an incentive to save for their retirement by:

Accepted Answer

A)  deferring taxes on income contributed to the IRA.
B)  eliminating taxes on the withdrawals from the IRA.
C)  eliminating taxes on the income contributed to the IRA.
D)  allowing employers to match the employee's contribution to the IRA.E) A) and B)
F) None of the above

Question 10

John is considering starting his degree in business this semester at State University.John will likely find that:

Accepted Answer

A)  his time would be better spent pursing a career after high school.
B)  he will have more fun and excitement than his friends that don't attend college.
C)  his choice of a business major will virtually guarantee him a comfortable retirement income if he sticks with it.
D)  he will likely earn about $1.6 million more during his lifetime than his friends with only a high school degree.E) All of the above
F) C) and D)

Question 11

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Accepted Answer

A)  credit cards are no longer accepted in many places as a valid source of credit.
B)  credit cards require that at least 25% of the balance be paid each month.
C)  there will be a finance charge even if Hannah pays her entire credit card balance in full and on time.
D)  the convenience of credit cards can lead to excessive debts.E) C) and D)
F) B) and C)

Question 12

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

Accepted Answer

A) True 
 B)False

Question 13

A financial planner would encourage you to borrow money:

Accepted Answer

A)  only to buy assets that are likely to generate income or increase in value.
B)  to pay your day-to-day expenses and then to invest your income.
C)  only when facing bankruptcy.
D)  in order to reduce your debt level.E) All of the above
F) B) and C)

Question 14

Trends in the number of workers contributing to the Social Security system and the number of workers drawing benefits from the system suggest that future generations will:

Accepted Answer

A)  have more frequent cost-of-living adjustments.
B)  see significant improvements in the level of benefits.
C)  face a later retirement age in order to qualify for full Social Security benefits.
D)  not be allowed to invest in private pension plans.E) B) and D)
F) A) and D)

Question 15

Accumulating money through savings allows you to participate in the growth of a capitalist society.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a benefit unique to buying a duplex,as opposed to the purchase of a single-family home?

Accepted Answer

A)  Real estate taxes are tax deductible.
B)  The rent income will help make the mortgage payment.
C)  Mortgage interest payments are tax deductible.
D)  The value of the home may increase over time.
E)  Only a duplex allows for rental income to help cover the payment on the mortgage.F) A) and B)
G) A) and D)

Question 17

The greatest return over a period of several years is likely to be earned by investing in a:

Accepted Answer

A)  small home in a great location.
B)  savings account in a bank.
C)  large home in a deteriorating neighborhood.
D)  moderate size home in a rural setting.E) B) and C)
F) None of the above

Question 18

The maximum amount that can be invested in a traditional IRA:

Accepted Answer

A)  is fixed at $2,500 per year.
B)  can be no more than 15 percent of the investor's annual gross income for most people;but people with incomes of less than $30,000 are allowed to invest up to $4,500.
C)  increased to $5,000 in 2009 and will increase each year with inflation.
D)  currently is $5,000 for workers under the age of 50 and $9,500 for workers between the ages of 50 and 59 ½.E) B) and D)
F) A) and B)

Question 19

An annuity is a contract to make regular payments to a person for life or for a fixed period.

Accepted Answer

A) True 
 B)False

Question 20

During her sophomore year in college Melody received a letter indicating she was eligible for a credit card along with a free gift from Metro State Bank.Melody was really excited until she remembered that any cash she has usually "burns a hole" in her pocket.Melody would likely not be successful with a credit card because:

Accepted Answer

A)  she has difficulty in getting access to credit.
B)  she would use it to make impulse purchases that she could not afford.
C)  she would not spend up to the limit immediately.
D)  her dad would not agree to cosign for her.E) A) and D)
F) B) and C)

Exam 23: Bonus C: Managing Your Personal Finances

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

Correct Answer
verified

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

Correct Answer
verified

A home is a good asset to have when applying for a loan.

Correct Answer
verified

Managing the finances of a household is similar to managing the finances of a small business.

Correct Answer
verified

John is considering starting his degree in business this semester at State University.John will likely find that:

Correct Answer
verified

Accumulating money through savings allows you to participate in the growth of a capitalist society.

Correct Answer
verified

Correct Answer
verified

A Roth IRA offers employees an incentive to save for their retirement by:

Correct Answer
verified

Excessive debt is as much a problem of young consumers as it is of other age groups.

Correct Answer
verified

Which of the following is a benefit unique to buying a duplex,as opposed to the purchase of a single-family home?

Correct Answer
verified

It is usually better to use any money left after paying monthly bills to pay off debts that carry high interest rates rather than putting that money into a savings account.

Correct Answer
verified

A financial planner would encourage you to borrow money:

Correct Answer
verified

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Correct Answer
verified

An annuity is a contract to make regular payments to a person for life or for a fixed period.

Correct Answer
verified

The greatest return over a period of several years is likely to be earned by investing in a:

Correct Answer
verified

The maximum amount that can be invested in a traditional IRA:

Correct Answer
verified

Correct Answer
verified

Trends in the number of workers contributing to the Social Security system and the number of workers drawing benefits from the system suggest that future generations will:

Correct Answer
verified

Guaranteed replacement cost insurance coverage provides the insured with the depreciated cost of assets.

Correct Answer
verified

Most people find it relatively easy to live frugally.

Correct Answer
verified

Exam 23: Bonus C: Managing Your Personal Finances

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

Correct AnswerverifiedShow Answer

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

Correct AnswerverifiedShow Answer

A home is a good asset to have when applying for a loan.

Correct AnswerverifiedShow Answer

Managing the finances of a household is similar to managing the finances of a small business.

Correct AnswerverifiedShow Answer

John is considering starting his degree in business this semester at State University.John will likely find that:

Correct AnswerverifiedShow Answer

Accumulating money through savings allows you to participate in the growth of a capitalist society.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A Roth IRA offers employees an incentive to save for their retirement by:

Correct AnswerverifiedShow Answer

Excessive debt is as much a problem of young consumers as it is of other age groups.

Correct AnswerverifiedShow Answer

Which of the following is a benefit unique to buying a duplex,as opposed to the purchase of a single-family home?

Correct AnswerverifiedShow Answer

It is usually better to use any money left after paying monthly bills to pay off debts that carry high interest rates rather than putting that money into a savings account.

Correct AnswerverifiedShow Answer

A financial planner would encourage you to borrow money:

Correct AnswerverifiedShow Answer

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Correct AnswerverifiedShow Answer

An annuity is a contract to make regular payments to a person for life or for a fixed period.

Correct AnswerverifiedShow Answer

The greatest return over a period of several years is likely to be earned by investing in a:

Correct AnswerverifiedShow Answer

The maximum amount that can be invested in a traditional IRA:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Trends in the number of workers contributing to the Social Security system and the number of workers drawing benefits from the system suggest that future generations will:

Correct AnswerverifiedShow Answer

Guaranteed replacement cost insurance coverage provides the insured with the depreciated cost of assets.

Correct AnswerverifiedShow Answer

Most people find it relatively easy to live frugally.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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