Question 1

Almost ________ U.S. adults has accumulated enough money by retirement age to live comfortably.

Accepted Answer

A)  1 in 10 
B)  1 in 4 
C)  1 in 2 
D)  8 in 10 
A)  1 in 10 
B)  1 in 4 
C)  1 in 2 
D)  8 in 10

Question 2

Christian quit his job to open his own online consulting business. He now realizes that he no longer has the benefit of a corporate retirement system. He should consider investing in a(n)

Accepted Answer

A)  simple 401(k) plan. 
B)  simple IRA plan. 
C)  automated trust account. 
D)  Keogh plan. 
A)  simple 401(k) plan. 
B)  simple IRA plan. 
C)  automated trust account. 
D)  Keogh plan.

Question 3

If your personal liabilities exceed your assets, you are on the road to financial security.

Accepted Answer

A) True 
 B)False

Question 4

A Roth IRA offers employees an incentive to save for their retirement by

Accepted Answer

A)  deferring taxes on income contributed to the IRA. 
B)  eliminating taxes on the withdrawals from the IRA. 
C)  eliminating taxes on the income contributed to the IRA. 
D)  allowing employers to match the employee's contribution to the IRA. 
A)  deferring taxes on income contributed to the IRA. 
B)  eliminating taxes on the withdrawals from the IRA. 
C)  eliminating taxes on the income contributed to the IRA. 
D)  allowing employers to match the employee's contribution to the IRA.

Question 5

The person who is named in your will to assemble the assets in your estate, handle taxes, and distribute the assets is called your proxy.

Accepted Answer

A) True 
 B)False

Question 6

Throughout history an investment in ________ has yielded an excellent return, regardless of the state of the economy or political changes.

Accepted Answer

A)  antiques 
B)  a good education 
C)  government bonds 
D)  savings accounts 
A)  antiques 
B)  a good education 
C)  government bonds 
D)  savings accounts

Question 7

Though stock prices do sometimes go down, investing in the stock market has generally provided very attractive returns over the long run.

Accepted Answer

A) True 
 B)False

Question 8

Most homeowner's insurance policies do not cover certain types of expensive items unless you purchase a rider for the additional coverage.

Accepted Answer

A) True 
 B)False

Question 9

If you find yourself regularly running out of cash, your only real option is to focus your attention on finding ways to increase your income.

Accepted Answer

A) True 
 B)False

Question 10

If possible, it is almost always better to buy a single home rather than an attached home.

Accepted Answer

A) True 
 B)False

Question 11

Credit-card debt represents an asset on a consumer's balance sheet.

Accepted Answer

A) True 
 B)False

Question 12

If you are in the 25 percent tax bracket and your home mortgage interest is $1,000 per month, then your after-tax mortgage interest cost is $750 per month.

Accepted Answer

A) True 
 B)False

Question 13

Denny plans to start his business program this semester at a local university. Denny will likely find that

Accepted Answer

A)  his time would be better spent pursuing a career after high school. 
B)  he will have more fun and excitement than his friends that don't attend college. 
C)  his choice of a business major will virtually guarantee him a comfortable retirement income if he sticks with it. 
D)  his investment in his education will be important in his future. 
A)  his time would be better spent pursuing a career after high school. 
B)  he will have more fun and excitement than his friends that don't attend college. 
C)  his choice of a business major will virtually guarantee him a comfortable retirement income if he sticks with it. 
D)  his investment in his education will be important in his future.

Question 14

Your big-screen HDTV would be listed as an asset on your personal balance sheet. However, the loan you took out to buy the TV would be listed as a personal liability.

Accepted Answer

A) True 
 B)False

Question 15

The factor likely to have the greatest impact on how fast the value of a home appreciates over time is the

Accepted Answer

A)  interest rate on the mortgage. 
B)  style and design features built into the home. 
C)  location of the home. 
D)  size of the home. 
A)  interest rate on the mortgage. 
B)  style and design features built into the home. 
C)  location of the home. 
D)  size of the home.

Question 16

Joe wants life insurance to provide benefits for his family if he were to die. He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age. His best strategy to achieve insurance and savings with one premium is term insurance.

Accepted Answer

A) True 
 B)False

Question 17

When you prepare your personal balance sheet, remember that your ________ is equal to your total assets minus any liabilities you have.

Accepted Answer

A)  net income 
B)  net worth 
C)  tax base 
D)  cash equivalent value 
A)  net income 
B)  net worth 
C)  tax base 
D)  cash equivalent value

Question 18

Connor is worried that his health may soon deteriorate to the point where he will no longer be able to take care of his own finances. One way he could ease his mind would be to

Accepted Answer

A)  name an executor to his will. 
B)  prepare a durable power of attorney. 
C)  transfer title to all of his real estate and financial assets to a relative he trusts. 
D)  invest all of his financial assets into a Keogh plan. 
A)  name an executor to his will. 
B)  prepare a durable power of attorney. 
C)  transfer title to all of his real estate and financial assets to a relative he trusts. 
D)  invest all of his financial assets into a Keogh plan.

Question 19

The tax-deferred investment plan that allows employees to save part of their income for retirement is called a(n)

Accepted Answer

A)  60/40 plan. 
B)  individual retirement account (IR
A) . 
C)  704(i) plan. 
D)  Keogh plan. 
A)  60/40 plan. 
B)  individual retirement account (IR
A) . 
C)  704(i) plan. 
D)  Keogh plan.

Question 20

Once Ira and Penny achieved a more solid financial foundation, they began to consider the purchase of a home. From a financial standpoint, a sound strategy for them to consider would be to

Accepted Answer

A)  buy a large house in a modest neighborhood. 
B)  buy a house in one of the best areas of town, even if they can afford only a relatively small house. 
C)  buy a house that will minimize their total real estate taxes. 
D)  make sure that their house payments are less than the rent they were paying on their old apartment. 
A)  buy a large house in a modest neighborhood. 
B)  buy a house in one of the best areas of town, even if they can afford only a relatively small house. 
C)  buy a house that will minimize their total real estate taxes. 
D)  make sure that their house payments are less than the rent they were paying on their old apartment.

Exam 24: Appendix: Managing Personal Finances

Almost ________ U.S. adults has accumulated enough money by retirement age to live comfortably.

Christian quit his job to open his own online consulting business. He now realizes that he no longer has the benefit of a corporate retirement system. He should consider investing in a(n)

If your personal liabilities exceed your assets, you are on the road to financial security.

A Roth IRA offers employees an incentive to save for their retirement by

The person who is named in your will to assemble the assets in your estate, handle taxes, and distribute the assets is called your proxy.

Throughout history an investment in ________ has yielded an excellent return, regardless of the state of the economy or political changes.

Though stock prices do sometimes go down, investing in the stock market has generally provided very attractive returns over the long run.

Most homeowner's insurance policies do not cover certain types of expensive items unless you purchase a rider for the additional coverage.

If you find yourself regularly running out of cash, your only real option is to focus your attention on finding ways to increase your income.

If possible, it is almost always better to buy a single home rather than an attached home.

Credit-card debt represents an asset on a consumer's balance sheet.

If you are in the 25 percent tax bracket and your home mortgage interest is $1,000 per month, then your after-tax mortgage interest cost is $750 per month.

Denny plans to start his business program this semester at a local university. Denny will likely find that

Your big-screen HDTV would be listed as an asset on your personal balance sheet. However, the loan you took out to buy the TV would be listed as a personal liability.

The factor likely to have the greatest impact on how fast the value of a home appreciates over time is the

Joe wants life insurance to provide benefits for his family if he were to die. He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age. His best strategy to achieve insurance and savings with one premium is term insurance.

When you prepare your personal balance sheet, remember that your ________ is equal to your total assets minus any liabilities you have.

Connor is worried that his health may soon deteriorate to the point where he will no longer be able to take care of his own finances. One way he could ease his mind would be to

The tax-deferred investment plan that allows employees to save part of their income for retirement is called a(n)

Once Ira and Penny achieved a more solid financial foundation, they began to consider the purchase of a home. From a financial standpoint, a sound strategy for them to consider would be 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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