Question 1

Approximately what percent of individuals have sufficient funds to handle a pure risk?

Accepted Answer

A)  10%. 
B)  15%. 
C)  25%. 
D)  35%. 
A)  10%. 
B)  15%. 
C)  25%. 
D)  35%.

Question 2

Which of the following allows only a small amount of unearned income to be taxed at a child's marginal tax bracket?

Accepted Answer

A)  Kiddie tax. 
B)  UGMA. 
C)  UTMA. 
D)  Custodial IRA. 
A)  Kiddie tax. 
B)  UGMA. 
C)  UTMA. 
D)  Custodial IRA.

Question 3

Which of the following refers to the early withdrawal penalty on a Roth IRA?

Accepted Answer

A)  5%. 
B)  10%. 
C)  15%. 
D)  There is no early withdrawal penalty. 
A)  5%. 
B)  10%. 
C)  15%. 
D)  There is no early withdrawal penalty.

Question 4

Which of the following refers to your perception of the riskiness associated with a behavior or decision?

Accepted Answer

A)  Business risk. 
B)  Objective risk. 
C)  Subjective risk. 
D)  Liquidity risk. 
A)  Business risk. 
B)  Objective risk. 
C)  Subjective risk. 
D)  Liquidity risk.

Question 5

Fatima made an early withdrawal from her Roth IRA of $5,000 in principal and $800 in earnings. What would be the amount of penalty she would pay on this early withdrawal?

Accepted Answer

A)  $40. 
B)  $50. 
C)  $70. 
D)  $80. 
A)  $40. 
B)  $50. 
C)  $70. 
D)  $80.

Question 6

How can minors own titled assets?

Accepted Answer

A)  Indirectly through a custodial account. 
B)  In their own name. 
C)  By adding a friend to the title. 
D)  Minors can't own titled assets. 
A)  Indirectly through a custodial account. 
B)  In their own name. 
C)  By adding a friend to the title. 
D)  Minors can't own titled assets.

Question 7

Which of the following is not insured by the FDIC?

Accepted Answer

A)  Retirement account. 
B)  Savings account. 
C)  Money market savings account. 
D)  Certificate of deposit. 
A)  Retirement account. 
B)  Savings account. 
C)  Money market savings account. 
D)  Certificate of deposit.

Question 8

Which of the following refers to assets that you purchase to reach long-term goals?

Accepted Answer

A)  Investments. 
B)  Savings. 
C)  Emergency fund. 
D)  Liquidity. 
A)  Investments. 
B)  Savings. 
C)  Emergency fund. 
D)  Liquidity.

Question 9

Which of the following combines the benefits offered by savings and checking accounts?

Accepted Answer

A)  Retirement account. 
B)  Savings account. 
C)  Money market savings account. 
D)  Certificate of deposit. 
A)  Retirement account. 
B)  Savings account. 
C)  Money market savings account. 
D)  Certificate of deposit.

Question 10

After purchasing a savings bond, how long is it before you can cash in the bond?

Accepted Answer

A)  1 year. 
B)  6 months. 
C)  2 years. 
D)  5 years. 
A)  1 year. 
B)  6 months. 
C)  2 years. 
D)  5 years.

Question 11

Which of the following illustrates making a trade-off between risk and return?

Accepted Answer

A)  Investment pyramid. 
B)  Business risk. 
C)  Emergency fund. 
D)  Liquidity risk. 
A)  Investment pyramid. 
B)  Business risk. 
C)  Emergency fund. 
D)  Liquidity risk.

Question 12

Which of the following refers to the combined maximum amount in 2018 that you can contribute to a Roth IRA and a traditional IRA?

Accepted Answer

A)  $2,500. 
B)  $5,500. 
C)  $7,500. 
D)  $10,000. 
A)  $2,500. 
B)  $5,500. 
C)  $7,500. 
D)  $10,000.

Question 13

Dedicated savings accounts pay interest rates similar to

Accepted Answer

A)  retirement accounts. 
B)  savings accounts. 
C)  money market savings accounts. 
D)  certificates of deposit. 
A)  retirement accounts. 
B)  savings accounts. 
C)  money market savings accounts. 
D)  certificates of deposit.

Question 14

Which of the following refers to a traditional IRA?

Accepted Answer

A)  All future withdrawals are fully taxable. 
B)  Subject to early withdrawal penalties. 
C)  Should not be used as an emergency fund. 
D)  All of these answer choices are correct. 
A)  All future withdrawals are fully taxable. 
B)  Subject to early withdrawal penalties. 
C)  Should not be used as an emergency fund. 
D)  All of these answer choices are correct.

Question 15

Before ________ you could purchase a U.S. savings bond from participating banks or credit unions.

Accepted Answer

A)  2010 
B)  2012 
C)  2015 
D)  2017 
A)  2010 
B)  2012 
C)  2015 
D)  2017

Question 16

Which of the following needs to be very liquid, that is, immediately accessible for use in case of an unexpected expense or lost income?

Accepted Answer

A)  Investments. 
B)  Options. 
C)  Emergency fund. 
D)  Returns. 
A)  Investments. 
B)  Options. 
C)  Emergency fund. 
D)  Returns.

Question 17

Charlamagne has a goal of purchasing a condo at the beach within the next 10 years. He currently has $5,000 to put toward the down payment on the condo and does not anticipate using the funds for any other purpose. He would like to make a one-time deposit that can increase in value over the next 10 years. If Charlamagne already has his emergency fund in place, the best option for the $5,000 to grow and help him meet his goal would be to acquire a

Accepted Answer

A)  savings account. 
B)  checking account. 
C)  certificate of deposit. 
D)  money market account. 
A)  savings account. 
B)  checking account. 
C)  certificate of deposit. 
D)  money market account.

Question 18

To protect yourself from financial fraud you should never

Accepted Answer

A)  ask for written documentation before sending money. 
B)  buy something from a familiar business or individual online. 
C)  pay a processing fee to receive a prize. 
D)  use a credit card to make purchases. 
A)  ask for written documentation before sending money. 
B)  buy something from a familiar business or individual online. 
C)  pay a processing fee to receive a prize. 
D)  use a credit card to make purchases.

Question 19

Juan Carlos cashed in a savings bond that had earned $400 in interest. His tax bracket is 12%, and his state charges 6% on investment income. How much tax will Juan Carlos pay on the interest from the bond?

Accepted Answer

A)  $48. 
B)  $36. 
C)  $24. 
D)  $0. 
A)  $48. 
B)  $36. 
C)  $24. 
D)  $0.

Question 20

Xavier owned a Series EE savings bond for 4 years and has decided to cash it tomorrow. The current value of the bond is $3,500, and the annual interest rate is 2.2%. How much interest will Xavier lose as a penalty for cashing in the bond?

Accepted Answer

A)  $16.40. 
B)  $19.25. 
C)  $21.30. 
D)  $23.75. 
A)  $16.40. 
B)  $19.25. 
C)  $21.30. 
D)  $23.75.

Approximately what percent of individuals have sufficient funds to handle a pure risk?

Which of the following allows only a small amount of unearned income to be taxed at a child's marginal tax bracket?

Which of the following refers to the early withdrawal penalty on a Roth IRA?

Which of the following refers to your perception of the riskiness associated with a behavior or decision?

Fatima made an early withdrawal from her Roth IRA of $5,000 in principal and $800 in earnings. What would be the amount of penalty she would pay on this early withdrawal?

How can minors own titled assets?

Which of the following is not insured by the FDIC?

Which of the following refers to assets that you purchase to reach long-term goals?

Which of the following combines the benefits offered by savings and checking accounts?

After purchasing a savings bond, how long is it before you can cash in the bond?

Which of the following illustrates making a trade-off between risk and return?

Which of the following refers to the combined maximum amount in 2018 that you can contribute to a Roth IRA and a traditional IRA?

Dedicated savings accounts pay interest rates similar to

Which of the following refers to a traditional IRA?

Before ________ you could purchase a U.S. savings bond from participating banks or credit unions.

Which of the following needs to be very liquid, that is, immediately accessible for use in case of an unexpected expense or lost income?

To protect yourself from financial fraud you should never

Juan Carlos cashed in a savings bond that had earned $400 in interest. His tax bracket is 12%, and his state charges 6% on investment income. How much tax will Juan Carlos pay on the interest from the bond?

Xavier owned a Series EE savings bond for 4 years and has decided to cash it tomorrow. The current value of the bond is $3,500, and the annual interest rate is 2.2%. How much interest will Xavier lose as a penalty for cashing in the bond?

Beginning Your Financial Journey: the Interior Finance Point of View

Tools for Your Financial Journey

Earnings and Income: the Building Blocks of Your Financial Journey

Personal Taxation

Checking Accounts, Credit Scores, and Credit Cards

Loans and Housing Decisions

Investments

Risk Management: the Role of Insurance

Planning for the Future: Retirement and Estate Planning

Filters

Exam 7: The Foundation of Savings

Approximately what percent of individuals have sufficient funds to handle a pure risk?

Which of the following allows only a small amount of unearned income to be taxed at a child's marginal tax bracket?

Which of the following refers to the early withdrawal penalty on a Roth IRA?

Which of the following refers to your perception of the riskiness associated with a behavior or decision?

Fatima made an early withdrawal from her Roth IRA of $5,000 in principal and $800 in earnings. What would be the amount of penalty she would pay on this early withdrawal?

How can minors own titled assets?

Which of the following is not insured by the FDIC?

Which of the following refers to assets that you purchase to reach long-term goals?

Which of the following combines the benefits offered by savings and checking accounts?

After purchasing a savings bond, how long is it before you can cash in the bond?

Which of the following illustrates making a trade-off between risk and return?

Which of the following refers to the combined maximum amount in 2018 that you can contribute to a Roth IRA and a traditional IRA?

Dedicated savings accounts pay interest rates similar to

Which of the following refers to a traditional IRA?

Before ________ you could purchase a U.S. savings bond from participating banks or credit unions.

Which of the following needs to be very liquid, that is, immediately accessible for use in case of an unexpected expense or lost income?

To protect yourself from financial fraud you should never

Juan Carlos cashed in a savings bond that had earned $400 in interest. His tax bracket is 12%, and his state charges 6% on investment income. How much tax will Juan Carlos pay on the interest from the bond?

Xavier owned a Series EE savings bond for 4 years and has decided to cash it tomorrow. The current value of the bond is $3,500, and the annual interest rate is 2.2%. How much interest will Xavier lose as a penalty for cashing in the bond?

Beginning Your Financial Journey: the Interior Finance Point of View

Tools for Your Financial Journey

Earnings and Income: the Building Blocks of Your Financial Journey

Personal Taxation

Checking Accounts, Credit Scores, and Credit Cards

Loans and Housing Decisions

Investments

Risk Management: the Role of Insurance

Planning for the Future: Retirement and Estate Planning

Filters