Exam 18: Appendix :personal-Finance-Appendix

Which of the following statements is true of employees who choose the Roth version of employee payroll-deduction retirement plans?

After working for 52 years as an accountant in a government agency in the state of Virginia, Angela retires from her job. On retirement, she receives a sum of $63,000, which had been accumulated over the entire period of her service. In this case, the employee-contribution retirement plan that Angela benefits from is the _____.

Joseph has been contributing to the 457 retirement plan ever since he started working. In the context of employee-contribution retirement plans, Joseph most likely works as a:

Charles, who is working for Impulsive Motors for the last 34 years, wants to take voluntary retirement from the company. However, he does not want to leave without receiving the full benefits of the company's retirement plan and therefore stalls his retirement for another year. It is stated in the company policies that a person will only receive all the retirement benefits if he or she has worked in the company for at least 35 years. In this case, the period of 35 years is the _____.

In the context of investment, diversification increases the possibility of earning exceptionally high returns.

In the context of the Fair, Isaac and Company (FICO) score, a score between 600 and 699 indicates a(n) _____ creditworthiness.

Clara holds common stock in a telecommunications company. The board of directors of the company declares that each stockholder will receive 2 percent of the company's profits relative to the proportion of shares he or she holds. Thus, as a stockholder, Clara receives a sum of $4,800 out of the company's profits. In this scenario, the money that Clara has received is called _____.

In the context of investments, one widely accepted financial principle is that a tradeoff exists between:

Which of the following statements is true of the PayPal service Venmo?

Patricia, a senior employee working in a state museum, retires from her job. She, however, does not receive the full benefits of her retirement plan as she did not fulfill the requirement laid down by the government. The government policies state that an employee of any government organization has to work in the same organization for at least 30 years for him or her to receive the retirement benefits. In this case, Patricia has failed to receive the benefits because she did not complete the _____.

Investors experience a capital gain if the market price of their stock rises relative to the price they paid for it.

In the context of building wealth for retirement, identify a true statement about a traditional individual retirement account (IRA).

Pablo has purchased several items from a gadget store. As the storekeeper bills the items, Pablo realizes that he does not have enough money in his bank account to make the payment. In these circumstances, Pablo can use his _____, which would allow him to make the purchase now and clear the balance later.

In the context of investing, individual investors can directly participate in securities markets.

One advantage of mutual funds is that they do not charge fees to cover the cost of managing the fund.

Define a budget. Briefly explain the two classifications of expenditures.

In the context of the amount of credit that one can obtain, which of the following is currently the most commonly used credit scoring system?

In the context of financial securities, one of the disadvantages of certificates of deposit is that they are not insured by the Federal Deposit Insurance Corporation (FDIC).

Larkan & Tokodo is a financial institution that sells shares to investors. The funds resulting from the investments are pooled and then invested in large corporate stocks, corporate bonds, government securities, or other assets. Jeremy, a capitalist, invests in Larkan & Tokodo. In this case, Jeremy has invested in a _____.

Jose's mother, who is 83 years old, has been hospitalized for almost four months because of deteriorating health conditions. Thus, each month, a major portion of Jose's income is spent on paying the hospital and medical bills and expenses incurred during diagnostic tests. In this scenario, Jose's medical expenses are an example of: