Question 1

A person in the 25 percent tax bracket who invests $1,000 in a traditional IRA immediately postpones $250 in taxes.

Accepted Answer

A) True 
 B)False

Question 2

The best way to save money is to

Accepted Answer

A)  pay yourself first by taking out money for savings from each paycheck before deciding what to do with the remaining money. 
B)  start your own business designed to create business tax deductions. 
C)  prepare a balance sheet. 
D)  pay yourself last. 
A)  pay yourself first by taking out money for savings from each paycheck before deciding what to do with the remaining money. 
B)  start your own business designed to create business tax deductions. 
C)  prepare a balance sheet. 
D)  pay yourself last.

Question 3

Purchasing ________ insurance is a relatively low cost way of protecting yourself from lost income due to an accident or prolonged illness.

Accepted Answer

A)  flexible term 
B)  health 
C)  contingent annuity 
D)  disability 
A)  flexible term 
B)  health 
C)  contingent annuity 
D)  disability

Question 4

Before getting married, a couple should discuss and agree upon a financial strategy.

Accepted Answer

A) True 
 B)False

Question 5

Regardless of potential changes, you can count on Social Security to provide you with a comfortable retirement.

Accepted Answer

A) True 
 B)False

Question 6

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)  modifier 
A)  rider 
B)  opener 
C)  extender 
D)  modifier

Question 7

The only way to accumulate enough money to do all of the things you want to do late in life is to

Accepted Answer

A)  take an inventory of your financial assets. 
B)  make more than you spend. 
C)  avoid bankruptcy. 
D)  satisfy the demands of your creditors. 
A)  take an inventory of your financial assets. 
B)  make more than you spend. 
C)  avoid bankruptcy. 
D)  satisfy the demands of your creditors.

Question 8

Many insurance providers offer ________ policies that give a discount to families who buy several types of insurance coverage from them.

Accepted Answer

A)  umbrella 
B)  universal 
C)  multi-use 
D)  rider-enhanced 
A)  umbrella 
B)  universal 
C)  multi-use 
D)  rider-enhanced

Question 9

Luke 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 10

The federal government discourages home ownership through high tax rates.

Accepted Answer

A) True 
 B)False

Question 11

Trends in the number of workers contributing to the Social Security system and the number of workers drawing benefits from the system suggest that future generations will

Accepted Answer

A)  have more frequent cost-of-living adjustments. 
B)  see significant improvements in the level of benefits. 
C)  face a later retirement age in order to qualify for full Social Security benefits. 
D)  not be allowed to invest in private pension plans. 
A)  have more frequent cost-of-living adjustments. 
B)  see significant improvements in the level of benefits. 
C)  face a later retirement age in order to qualify for full Social Security benefits. 
D)  not be allowed to invest in private pension plans.

Question 12

Accumulating money through savings allows you to participate in the growth of a capitalist society.

Accepted Answer

A) True 
 B)False

Question 13

As their situation began to improve, the financial adviser began discussing investment strategies with Penny and Ira. He suggested that they might want to invest in the stock market. He surprised them by saying that they should try to buy stocks during a major downturn in the market-just when most people were trying to sell. This statement suggests that the financial advisor agreed with the

Accepted Answer

A)  ontrarian approach to investing. 
B)  concept of "buying short." 
C)  use of leverage in the stock market. 
D)  random walk theory of investment strategy. 
A)  ontrarian approach to investing. 
B)  concept of "buying short." 
C)  use of leverage in the stock market. 
D)  random walk theory of investment strategy.

Question 14

The benefit of opening an IRA while you're young is the compounding of the money invested tax-free over your working lifetime.

Accepted Answer

A) True 
 B)False

Question 15

The reason you would prepare a durable power of attorney is to make sure that someone was named to take over your finances if you become incapacitated.

Accepted Answer

A) True 
 B)False

Question 16

A Roth IRA allows workers who qualify to get an up-front deduction for any money they invest in the plan.

Accepted Answer

A) True 
 B)False

Question 17

Ryan is in need of advice regarding investments, taxes, and insurance for himself and his family. He would be well advised to seek the advice of an insurance salesperson.

Accepted Answer

A) True 
 B)False

Question 18

For workers who qualify, the earnings from income invested in a traditional IRA are

Accepted Answer

A)  not taxed until the funds are withdrawn. 
B)  never taxed. 
C)  taxed at the time they are earned, but at the lowest individual rate. 
D)  taxed both at the time the money is earned and at the time the earnings are withdrawn. 
A)  not taxed until the funds are withdrawn. 
B)  never taxed. 
C)  taxed at the time they are earned, but at the lowest individual rate. 
D)  taxed both at the time the money is earned and at the time the earnings are withdrawn.

Question 19

Many employers offer health insurance coverage for their full-time employees.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 24: Appendix: Managing Personal Finances

A person in the 25 percent tax bracket who invests $1,000 in a traditional IRA immediately postpones $250 in taxes.

The best way to save money is to

Purchasing ________ insurance is a relatively low cost way of protecting yourself from lost income due to an accident or prolonged illness.

Before getting married, a couple should discuss and agree upon a financial strategy.

Regardless of potential changes, you can count on Social Security to provide you with a comfortable retirement.

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.

The only way to accumulate enough money to do all of the things you want to do late in life is to

Many insurance providers offer ________ policies that give a discount to families who buy several types of insurance coverage from them.

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

The federal government discourages home ownership through high tax rates.

Trends in the number of workers contributing to the Social Security system and the number of workers drawing benefits from the system suggest that future generations will

Accumulating money through savings allows you to participate in the growth of a capitalist society.

The benefit of opening an IRA while you're young is the compounding of the money invested tax-free over your working lifetime.

The reason you would prepare a durable power of attorney is to make sure that someone was named to take over your finances if you become incapacitated.

A Roth IRA allows workers who qualify to get an up-front deduction for any money they invest in the plan.

Ryan is in need of advice regarding investments, taxes, and insurance for himself and his family. He would be well advised to seek the advice of an insurance salesperson.

For workers who qualify, the earnings from income invested in a traditional IRA are

Many employers offer health insurance coverage for their full-time employees.

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

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

Filters