Question 1

In order to get in the habit of saving,personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash,savings accounts,CDs and other liquid assets.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

Given a 25% tax bracket,the after-tax cost of a house mortgage interest payment of $1,000 would be:

Accepted Answer

A)  $250.
B)  $750.
C)  $1,000.
D)  $1,250.E) A) and D)
F) A) and C)

Question 4

IRAs,401(k),and Keogh plans all include incentives to encourage saving for retirement.

Accepted Answer

A) True 
 B)False

Question 5

The money a worker invests in a 401(k)retirement account reduces that worker's present taxable income.

Accepted Answer

A) True 
 B)False

Question 6

According to Newsweek magazine,a young couple with a new baby should have life insurance coverage equal to:

Accepted Answer

A)  $500,000.
B)  three times their annual income.
C)  five times their annual income.
D)  seven times their annual income plus $100,000 to cover the cost of college.E) A) and B)
F) A) and D)

Question 7

Jack is thinking about preparing a durable power of attorney.This indicates that he wants to:

Accepted Answer

A)  ensure that a single lawyer will be able to handle all of his legal needs.
B)  declare that his current will is invalid.
C)  eliminate the taxes on his estate when he dies.
D)  appoint someone to take over his finances if he should become incapacitateD.A durable power of attorney is a document that gives an individual you name the power to take care of your finances if you become incapacitated.E) A) and C)
F) A) and B)

Question 8

One danger of a credit card is that consumers often buy items they wouldn't normally buy if they had to pay cash.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Accepted Answer

A)  $200
B)  $500
C)  $750
D)  $1,000E) B) and C)
F) A) and C)

Question 10

A benefit of using credit cards is that they:

Accepted Answer

A)  have lower interest rates than other forms of credit.
B)  provide a record that makes it possible to keep track of purchases easily.
C)  help consumers be more disciplined when it comes to spending decisions.
D)  allow the consumer to spread out payments and reduce overall costs.E) All of the above
F) C) and D)

Question 11

Henri wants to get better control of his personal finances.He should begin by setting up a personal balance sheet and a personal income statement.

Accepted Answer

A) True 
 B)False

Question 12

What are the advantages of investing in a home?

Accepted Answer

One of the better investments persons ca...

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A comparison of variable life insurance to a standard whole life plan would reveal that:

Accepted Answer

A)  they are essentially identical.
B)  variable life offers only pure insurance but does so at a very low cost,while a standard whole life plan costs more but offers both insurance and a savings plan.
C)  both a standard whole life and variable life insurance offer both life insurance and savings,but variable life invests the savings more aggressively than whole life.
D)  variable life is only available to people who want at least $1 million in coverage-and are willing to pay for it.E) A) and D)
F) C) and D)

Question 15

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Accepted Answer

A)  Term
B)  Health
C)  Renters
D)  Homeowner'sE) A) and C)
F) All of the above

Question 16

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.E) C) and D)
F) A) and D)

Question 17

One strategy to lower the cost of automobile insurance is to purchase a policy with a:

Accepted Answer

A)  low deductible.
B)  high deductible.
C)  liability coverage rider.
D)  health coverage rider.E) None of the above
F) C) and D)

Question 18

A(n) ________ can be added to a homeowner's insurance policy that provides for coverage at a reasonable cost for items that the policy otherwise would not cover.

Accepted Answer

A)  rider
B)  opener
C)  extender
D)  modifierE) A) and D)
F) B) and C)

Question 19

Which of the following is an indication that the government has recognized that problems with Social Security funding make it highly unlikely that future Social Security benefits will be sufficient to provide retirees with enough income for a comfortable retirement?

Accepted Answer

A)  The government has provided cost-of-living adjustments to Social Security recipients.
B)  The government has invested the contributions in high-yielding investment securities.
C)  The government has established incentives for workers to save their own money for retirement.
D)  The government has passed legislation to require Social Security to maintain a balanced budget.E) B) and C)
F) A) and D)

Question 20

Most families only need to buy enough life insurance to replace about three years of income.

Accepted Answer

A) True 
 B)False

Exam 23: Bonus C: Managing Your Personal Finances

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

Correct AnswerverifiedShow Answer

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Correct AnswerverifiedShow Answer

What are the advantages of investing in a home?

Correct AnswerverifiedOne of the better investments persons ca...View AnswerShow Answer

Which of the following is an advantage of home ownership?

Correct AnswerverifiedShow Answer

Most families only need to buy enough life insurance to replace about three years of income.

Correct AnswerverifiedShow Answer

One danger of a credit card is that consumers often buy items they wouldn't normally buy if they had to pay cash.

Correct AnswerverifiedShow Answer

A(n) ________ can be added to a homeowner's insurance policy that provides for coverage at a reasonable cost for items that the policy otherwise would not cover.

Correct AnswerverifiedShow Answer

Given a 25% tax bracket,the after-tax cost of a house mortgage interest payment of $1,000 would be:

Correct AnswerverifiedShow Answer

IRAs,401(k),and Keogh plans all include incentives to encourage saving for retirement.

Correct AnswerverifiedShow Answer

A benefit of using credit cards is that they:

Correct AnswerverifiedShow Answer

One strategy to lower the cost of automobile insurance is to purchase a policy with a:

Correct AnswerverifiedShow Answer

Henri wants to get better control of his personal finances.He should begin by setting up a personal balance sheet and a personal income statement.

Correct AnswerverifiedShow Answer

In order to get in the habit of saving,personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash,savings accounts,CDs and other liquid assets.

Correct AnswerverifiedShow Answer

Which of the following is an indication that the government has recognized that problems with Social Security funding make it highly unlikely that future Social Security benefits will be sufficient to provide retirees with enough income for a comfortable retirement?

Correct AnswerverifiedShow Answer

The money a worker invests in a 401(k)retirement account reduces that worker's present taxable income.

Correct AnswerverifiedShow Answer

A comparison of variable life insurance to a standard whole life plan would reveal that:

Correct AnswerverifiedShow Answer

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Correct AnswerverifiedShow Answer

According to Newsweek magazine,a young couple with a new baby should have life insurance coverage equal to:

Correct AnswerverifiedShow Answer

Jack is thinking about preparing a durable power of attorney.This indicates that he wants to:

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
One of the better investments persons ca...
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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified