Question 1

Claire has contributed to a Roth IRA for the last several years. She is now in her late sixties and has just retired. She plans to withdraw $3,000 this year from her Roth IRA. If she is in the 25 percent tax bracket, how much tax will she have to pay on her withdrawal?

Accepted Answer

A)   $ 750
B)   $1,000
C)   $2,250
D)   She will not owe any taxes on this withdrawal.

Question 2

The first step you would take to get control of your personal finances is to

Accepted Answer

A)   keep track of all your expenses.
B)   prepare a budget.
C)   take inventory of your assets.
D)   start a savings program.

Question 3

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Accepted Answer

A) True 
 B)False

Question 4

Funds deposited into an IRA cannot be withdrawn until you retire.

Accepted Answer

A) True 
 B)False

Question 5

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Accepted Answer

A) True 
 B)False

Question 6

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Accepted Answer

A) True 
 B)False

Question 7

What advice might a personal financial advisor offer a recent college graduate desiring to become financially secure?

Accepted Answer

The first step is to recognize that succ...

Question 8

Which of the following would be included as an asset in the preparation of a personal balance sheet?

Accepted Answer

A)   credit-card debt
B)   home mortgage
C)   your salary from a part-time job
D)   your computer

Question 9

More than half of all debtors seeking help at the National Foundation for Credit were between the ages of 18 and 32.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the best advice about the use of credit cards?

Accepted Answer

A)   Except for very small purchases, credit cards should always be used instead of cash.
B)   The best approach to credit cards is never even to apply for one.
C)   Credit cards are an important part of a personal financial system, but pay the balance in full during the period when no interest is charged.
D)   Credit cards are most useful when making large purchases (over $500) , because they allow you to spread out the payments to fit into your budget.

Question 11

Only large corporations with at least 500 employees can offer their employees a simple 401(k) retirement plan that allows for greater contribution maximums.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   contrarian
B)   revisionist
C)   arbitrarian
D)   negativist

Question 13

Budgets are

Accepted Answer

A)   useful for businesses, but too restrictive to be used by individuals or households.
B)   a financial plan of projected revenues and expenses.
C)   just another name for cash flow statements.
D)   only helpful to people who earn more than $50,000 per year.

Question 14

Investing in a home is generally considered a

Accepted Answer

A)   poor choice when compared to renting.
B)   wise investment.
C)   luxury that should be postponed as long as possible.
D)   good decision, but only if you've saved enough to pay in full with cash.

Question 15

In saving for retirement, Penny could take advantage of the unique tax shelter offered only to small-business owners in a

Accepted Answer

A)   401(k)  plan.
B)   simple IRA plan.
C)   Roth plan.
D)   Keogh plan.

Question 16

Patrick is in the habit of using his credit card for expenditures made on business trips. The most likely reason he does this is to

Accepted Answer

A)   lower his business expenses.
B)   take a deduction on the interest he pays on his credit card balance.
C)   pad his expense account.
D)   keep track of his purchases.

Question 17

Which of the following is true of credit cards?

Accepted Answer

A)   They are a cheaper way to finance your education.
B)   They are an efficient way to keep track of purchases.
C)   They are an effective way of controlling the amount of debt the consumer incurs.
D)   They are less convenient than carrying cash or writing a check.

Question 18

For someone with a family that includes young children, the first step in estate planning should be to

Accepted Answer

A)   establish a will.
B)   set up a trust fund for each child.
C)   select a guardian for the children.
D)   give each child his or her own savings account.

Question 19

The death benefits of a variable life insurance policy vary depending upon the performance of the investment.

Accepted Answer

A) True 
 B)False

Question 20

An individual retirement account (IRA) is a tax-deferred investment plan designed to encourage workers to save for retirement.

Accepted Answer

A) True 
 B)False

Exam 24: Appendix: Managing Personal Finances

Investing in a home is generally considered a

Correct Answer
verified

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Correct Answer
verified

Funds deposited into an IRA cannot be withdrawn until you retire.

Correct Answer
verified

More than half of all debtors seeking help at the National Foundation for Credit were between the ages of 18 and 32.

Correct Answer
verified

Correct Answer
verified

Only large corporations with at least 500 employees can offer their employees a simple 401(k) retirement plan that allows for greater contribution maximums.

Correct Answer
verified

For someone with a family that includes young children, the first step in estate planning should be to

Correct Answer
verified

The death benefits of a variable life insurance policy vary depending upon the performance of the investment.

Correct Answer
verified

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Correct Answer
verified

Which of the following is the best advice about the use of credit cards?

Correct Answer
verified

Patrick is in the habit of using his credit card for expenditures made on business trips. The most likely reason he does this is to

Correct Answer
verified

Claire has contributed to a Roth IRA for the last several years. She is now in her late sixties and has just retired. She plans to withdraw $3,000 this year from her Roth IRA. If she is in the 25 percent tax bracket, how much tax will she have to pay on her withdrawal?

Correct Answer
verified

Budgets are

Correct Answer
verified

What advice might a personal financial advisor offer a recent college graduate desiring to become financially secure?

Correct Answer
verified
The first step is to recognize that succ...
View Answer

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Correct Answer
verified

Which of the following is true of credit cards?

Correct Answer
verified

Which of the following would be included as an asset in the preparation of a personal balance sheet?

Correct Answer
verified

In saving for retirement, Penny could take advantage of the unique tax shelter offered only to small-business owners in a

Correct Answer
verified

An individual retirement account (IRA) is a tax-deferred investment plan designed to encourage workers to save for retirement.

Correct Answer
verified

The first step you would take to get control of your personal finances is to

Correct Answer
verified

Exam 24: Appendix: Managing Personal Finances

Investing in a home is generally considered a

Correct AnswerverifiedShow Answer

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Correct AnswerverifiedShow Answer

Funds deposited into an IRA cannot be withdrawn until you retire.

Correct AnswerverifiedShow Answer

More than half of all debtors seeking help at the National Foundation for Credit were between the ages of 18 and 32.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Only large corporations with at least 500 employees can offer their employees a simple 401(k) retirement plan that allows for greater contribution maximums.

Correct AnswerverifiedShow Answer

For someone with a family that includes young children, the first step in estate planning should be to

Correct AnswerverifiedShow Answer

The death benefits of a variable life insurance policy vary depending upon the performance of the investment.

Correct AnswerverifiedShow Answer

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Correct AnswerverifiedShow Answer

Which of the following is the best advice about the use of credit cards?

Correct AnswerverifiedShow Answer

Patrick is in the habit of using his credit card for expenditures made on business trips. The most likely reason he does this is to

Correct AnswerverifiedShow Answer

Claire has contributed to a Roth IRA for the last several years. She is now in her late sixties and has just retired. She plans to withdraw $3,000 this year from her Roth IRA. If she is in the 25 percent tax bracket, how much tax will she have to pay on her withdrawal?

Correct AnswerverifiedShow Answer

Budgets are

Correct AnswerverifiedShow Answer

What advice might a personal financial advisor offer a recent college graduate desiring to become financially secure?

Correct AnswerverifiedThe first step is to recognize that succ...View AnswerShow Answer

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Correct AnswerverifiedShow Answer

Which of the following is true of credit cards?

Correct AnswerverifiedShow Answer

Which of the following would be included as an asset in the preparation of a personal balance sheet?

Correct AnswerverifiedShow Answer

In saving for retirement, Penny could take advantage of the unique tax shelter offered only to small-business owners in a

Correct AnswerverifiedShow Answer

An individual retirement account (IRA) is a tax-deferred investment plan designed to encourage workers to save for retirement.

Correct AnswerverifiedShow Answer

The first step you would take to get control of your personal finances is to

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The first step is to recognize that succ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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