Question 1

If you are relatively healthy, there is no real reason to buy disability insurance.

Accepted Answer

A) True 
 B)False

Question 2

About 35% of U.S. households do not have a retirement account.

Accepted Answer

A) True 
 B)False

Question 3

Term life insurance offers pure insurance with no savings feature.

Accepted Answer

A) True 
 B)False

Question 4

About ________ of all U.S. households own stock in corporations.

Accepted Answer

A)  16 percent 
B)  30 percent 
C)  half 
D)  three-fourths 
A)  16 percent 
B)  30 percent 
C)  half 
D)  three-fourths

Question 5

Dmitry emigrated to the United States from a formerly communist country. He is looking to you for advice on how to succeed in a capitalist system. He would be well advised to

Accepted Answer

A)  find a job and live frugally in order to save money to invest. 
B)  rely heavily on government assistance programs to maintain a relatively comfortable life style. 
C)  get a credit card, even if it has a very low credit limit, and use it to establish a good credit rating. 
D)  follow the buy now, pay later rule of personal finance. 
A)  find a job and live frugally in order to save money to invest. 
B)  rely heavily on government assistance programs to maintain a relatively comfortable life style. 
C)  get a credit card, even if it has a very low credit limit, and use it to establish a good credit rating. 
D)  follow the buy now, pay later rule of personal finance.

Question 6

Once they've accumulated enough money, buying a low-priced home is often a good investment for young adults.

Accepted Answer

A) True 
 B)False

Question 7

Preparing and living with a personal budget is

Accepted Answer

A)  not necessary if you have sufficient income. 
B)  similar to activities needed to handle the finances of a small business. 
C)  often more trouble than the benefits justify. 
D)  an excellent technique to prepare for a career in accounting. 
A)  not necessary if you have sufficient income. 
B)  similar to activities needed to handle the finances of a small business. 
C)  often more trouble than the benefits justify. 
D)  an excellent technique to prepare for a career in accounting.

Question 8

Your computer and car should both be listed on the asset side of your personal balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a form of whole life insurance that provides a death benefit that varies with the performance of the investments of the insurance company?

Accepted Answer

A)  flexible whole life insurance 
B)  variable life insurance 
C)  adjustable benefit insurance 
D)  multiyear level-premium insurance 
A)  flexible whole life insurance 
B)  variable life insurance 
C)  adjustable benefit insurance 
D)  multiyear level-premium insurance

Question 10

Withdrawals from a traditional IRA prior to the age of 59½ are

Accepted Answer

A)  tax deferred until you reach 65 years of age. 
B)  tax-free. 
C)  normally subject to a penalty and taxes on the income that is withdrawn from the IRA. 
D)  subject to a possible denial after review by the Internal Revenue Service. 
A)  tax deferred until you reach 65 years of age. 
B)  tax-free. 
C)  normally subject to a penalty and taxes on the income that is withdrawn from the IRA. 
D)  subject to a possible denial after review by the Internal Revenue Service.

Question 11

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. 
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.

Question 12

Fixed annuities have become much more popular than variable annuities.

Accepted Answer

A) True 
 B)False

Question 13

Everything else constant, the higher the deductible on your car insurance policy, the higher the premium for your car insurance.

Accepted Answer

A) True 
 B)False

Question 14

Interest paid on a home loan is deductible from taxable income.

Accepted Answer

A) True 
 B)False

Question 15

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. 
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.

Question 16

After marriage, one great financial strategy is to live on one income and to save the other.

Accepted Answer

A) True 
 B)False

Question 17

Although he has a good health insurance policy, Shaun is concerned that a serious accident or lengthy illness would still be devastating to his family because of the lost income and other expenses not covered by his policy. Shaun would probably be interested in obtaining

Accepted Answer

A)  disability insurance. 
B)  a premium waiver provision. 
C)  health extension coverage. 
D)  a rider on his homeowner's policy. 
A)  disability insurance. 
B)  a premium waiver provision. 
C)  health extension coverage. 
D)  a rider on his homeowner's policy.

Question 18

House payments tend to rise at a faster rate than do rent payments on a similar sized house.

Accepted Answer

A) True 
 B)False

Question 19

Personal financial planners often encourage their clients to write down every single penny they spend each day. The main purpose of this is to

Accepted Answer

A)  focus attention on the spending levels for each item. 
B)  eliminate the need for accountants. 
C)  do a better job of tax planning. 
D)  accumulate data needed to prepare a personal balance sheet. 
A)  focus attention on the spending levels for each item. 
B)  eliminate the need for accountants. 
C)  do a better job of tax planning. 
D)  accumulate data needed to prepare a personal balance sheet.

Question 20

The goal of accumulating capital is to allow an individual to

Accepted Answer

A)  buy the things that satisfy present wants and needs. 
B)  have funds available to invest. 
C)  buy now, pay later. 
D)  establish a good credit rating. 
A)  buy the things that satisfy present wants and needs. 
B)  have funds available to invest. 
C)  buy now, pay later. 
D)  establish a good credit rating.

Exam 24: Appendix: Managing Personal Finances

If you are relatively healthy, there is no real reason to buy disability insurance.

About 35% of U.S. households do not have a retirement account.

Term life insurance offers pure insurance with no savings feature.

About ________ of all U.S. households own stock in corporations.

Dmitry emigrated to the United States from a formerly communist country. He is looking to you for advice on how to succeed in a capitalist system. He would be well advised to

Once they've accumulated enough money, buying a low-priced home is often a good investment for young adults.

Preparing and living with a personal budget is

Your computer and car should both be listed on the asset side of your personal balance sheet.

Which of the following is a form of whole life insurance that provides a death benefit that varies with the performance of the investments of the insurance company?

Withdrawals from a traditional IRA prior to the age of 59½ are

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

Fixed annuities have become much more popular than variable annuities.

Everything else constant, the higher the deductible on your car insurance policy, the higher the premium for your car insurance.

Interest paid on a home loan is deductible from taxable income.

A benefit of using credit cards is that they

After marriage, one great financial strategy is to live on one income and to save the other.

Although he has a good health insurance policy, Shaun is concerned that a serious accident or lengthy illness would still be devastating to his family because of the lost income and other expenses not covered by his policy. Shaun would probably be interested in obtaining

House payments tend to rise at a faster rate than do rent payments on a similar sized house.

Personal financial planners often encourage their clients to write down every single penny they spend each day. The main purpose of this is to

The goal of accumulating capital is to allow an individual to

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Appendix: Working Within the Legal Environment

Appendix: Using Technology to Manage Information

Appendix: Managing Risk

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