Question 1

Which of the following is an advantage of home ownership?

Accepted Answer

A)   Home ownership is a good way to control the costs of utilities, maintenance, and insurance.
B)   Mortgage interest and real estate taxes are tax deductible.
C)   Money invested in a house is a highly liquid investment.
D)   Home ownership provides a guaranteed rate of return that is more stable than the return earned by investing in the stock market.

Question 2

IRA funds are not available for withdrawal until you are 59½ years old.

Accepted Answer

A) True 
 B)False

Question 3

An advantage of both traditional and Roth IRAs is that both the income invested and the earnings from these investments are never taxed.

Accepted Answer

A) True 
 B)False

Question 4

The earnings of a traditional individual retirement account (IRA)  are

Accepted Answer

A)   taxed at the time they are earned.
B)   not taxed.
C)   taxed when the funds are withdrawn.
D)   subject to the double taxation of all dividends.

Question 5

Identify and discuss the six steps that individuals can take to gain control of their personal finances.

Accepted Answer

Step 1. Take inventory of your financial...

Question 6

From a financial viewpoint, it is best to buy a

Accepted Answer

A)   large home in a good neighborhood.
B)   very large home in a neighborhood where homes are relatively inexpensive.
C)   medium-sized home in a neighborhood where homes are the least expensive.
D)   small home in an excellent neighborhood.

Question 7

From an investment viewpoint, it is a good idea to buy a large home in an area of town where homes are less expensive.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a benefit of buying a home rather than renting?

Accepted Answer

A)   Real estate taxes and utilities will be fixed.
B)   It reduces the need to carry insurance.
C)   Paying for a home is a good way to force yourself to save.
D)   The entire purchase price of the home can be deducted from taxable income, but this deduction must be spread over at least 15 years.

Question 9

The total cost of purchasing a sound system or HDTV with cash is ________ the cost when using credit cards to finance the same assets.

Accepted Answer

A)   the same as
B)   greater than
C)   less than
D)   less stable than

Question 10

Unlike whole life policies, a universal life insurance policy typically invests part of the premium in very aggressive, high-risk assets.

Accepted Answer

A) True 
 B)False

Question 11

If you have minor children, the first step in estate planning is to select their guardian.

Accepted Answer

A) True 
 B)False

Question 12

Mortgage interest payments and property taxes are

Accepted Answer

A)   tax deductible for homeowners.
B)   expenses that make home ownership less attractive than renting.
C)   both likely to increase each year at a faster rate than your income.
D)   both likely to decline the longer you own the home.

Question 13

During a recent drop in the stock market, Damon took the opportunity to buy a wide variety of stocks even though many of his friends and relatives were selling. His investment strategy appears to be consistent with contrarian views.

Accepted Answer

A) True 
 B)False

Question 14

Disability insurance provides a relatively low-cost way of protecting against lost income due to an accident or illness that prevents you from working for an extended period of time.

Accepted Answer

A) True 
 B)False

Question 15

Henry and Mila are newlyweds and received some very expensive wedding gifts, including some beautiful silverware and jewelry. Their homeowner's policy

Accepted Answer

A)   automatically covers these items.
B)   does not automatically cover such items and they must take out a separate policy specifically for those types of items.
C)   does not automatically cover these items, but a rider can be used to add this coverage.
D)   automatically covers these items from theft, but not from damage due to fire, explosion, or vandalism.

Question 16

Quinn 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 debt.

Question 17

People who have health insurance seldom need disability insurance.

Accepted Answer

A) True 
 B)False

Question 18

In the future, the Social Security system is likely to

Accepted Answer

A)   raise taxes and reduce benefits.
B)   increase cost-of-living adjustments.
C)   establish a younger retirement age.
D)   adequately provide for all the retirement income the typical retiree needs to live comfortably.

Question 19

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Accepted Answer

A) True 
 B)False

Question 20

By using the financial planner's advice, Penny and Ira were able to find ways to cut back on their spending and began to live more modestly. They began to have a few hundred dollars left over each month after handling their normal expenses. Which of the following is the first thing they should do with their extra money?

Accepted Answer

A)   buy one nice household item that they will both enjoy as a reward for their thriftiness
B)   pay off their debts, starting with the ones that have the highest finance costs
C)   start a savings account at a local bank
D)   buy bonds in a major corporation

Exam 24: Appendix: Managing Personal Finances

Unlike whole life policies, a universal life insurance policy typically invests part of the premium in very aggressive, high-risk assets.

Correct Answer
verified

The total cost of purchasing a sound system or HDTV with cash is ________ the cost when using credit cards to finance the same assets.

Correct Answer
verified

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

Correct Answer
verified

Identify and discuss the six steps that individuals can take to gain control of their personal finances.

Correct Answer
verified
Step 1. Take inventory of your financial...
View Answer

From an investment viewpoint, it is a good idea to buy a large home in an area of town where homes are less expensive.

Correct Answer
verified

Disability insurance provides a relatively low-cost way of protecting against lost income due to an accident or illness that prevents you from working for an extended period of time.

Correct Answer
verified

People who have health insurance seldom need disability insurance.

Correct Answer
verified

IRA funds are not available for withdrawal until you are 59½ years old.

Correct Answer
verified

Correct Answer
verified

Mortgage interest payments and property taxes are

Correct Answer
verified

If you have minor children, the first step in estate planning is to select their guardian.

Correct Answer
verified

The earnings of a traditional individual retirement account (IRA) are

Correct Answer
verified

In the future, the Social Security system is likely to

Correct Answer
verified

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Correct Answer
verified

Henry and Mila are newlyweds and received some very expensive wedding gifts, including some beautiful silverware and jewelry. Their homeowner's policy

Correct Answer
verified

Which of the following is an advantage of home ownership?

Correct Answer
verified

Which of the following is a benefit of buying a home rather than renting?

Correct Answer
verified

An advantage of both traditional and Roth IRAs is that both the income invested and the earnings from these investments are never taxed.

Correct Answer
verified

During a recent drop in the stock market, Damon took the opportunity to buy a wide variety of stocks even though many of his friends and relatives were selling. His investment strategy appears to be consistent with contrarian views.

Correct Answer
verified

From a financial viewpoint, it is best to buy a

Correct Answer
verified

Exam 24: Appendix: Managing Personal Finances

Unlike whole life policies, a universal life insurance policy typically invests part of the premium in very aggressive, high-risk assets.

Correct AnswerverifiedShow Answer

The total cost of purchasing a sound system or HDTV with cash is ________ the cost when using credit cards to finance the same assets.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Identify and discuss the six steps that individuals can take to gain control of their personal finances.

Correct AnswerverifiedStep 1. Take inventory of your financial...View AnswerShow Answer

From an investment viewpoint, it is a good idea to buy a large home in an area of town where homes are less expensive.

Correct AnswerverifiedShow Answer

Disability insurance provides a relatively low-cost way of protecting against lost income due to an accident or illness that prevents you from working for an extended period of time.

Correct AnswerverifiedShow Answer

People who have health insurance seldom need disability insurance.

Correct AnswerverifiedShow Answer

IRA funds are not available for withdrawal until you are 59½ years old.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Mortgage interest payments and property taxes are

Correct AnswerverifiedShow Answer

If you have minor children, the first step in estate planning is to select their guardian.

Correct AnswerverifiedShow Answer

The earnings of a traditional individual retirement account (IRA) are

Correct AnswerverifiedShow Answer

In the future, the Social Security system is likely to

Correct AnswerverifiedShow Answer

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Correct AnswerverifiedShow Answer

Henry and Mila are newlyweds and received some very expensive wedding gifts, including some beautiful silverware and jewelry. Their homeowner's policy

Correct AnswerverifiedShow Answer

Which of the following is an advantage of home ownership?

Correct AnswerverifiedShow Answer

Which of the following is a benefit of buying a home rather than renting?

Correct AnswerverifiedShow Answer

An advantage of both traditional and Roth IRAs is that both the income invested and the earnings from these investments are never taxed.

Correct AnswerverifiedShow Answer

During a recent drop in the stock market, Damon took the opportunity to buy a wide variety of stocks even though many of his friends and relatives were selling. His investment strategy appears to be consistent with contrarian views.

Correct AnswerverifiedShow Answer

From a financial viewpoint, it is best to buy a

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Step 1. Take inventory of your financial...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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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