Question 1

When young people decide to buy a house,the best approach is to buy a house in an inexpensive part of town so they can get a larger house for less money.

Accepted Answer

A) True 
 B)False

Question 2

The path to success in a capitalist system is to:

Accepted Answer

A)  spend more on capital goods than you do on consumer goods. 
B)  have access to debt markets. 
C)  have money to invest. 
D)  work hard with the goal of moving up in the management of your employer. 
A)  spend more on capital goods than you do on consumer goods. 
B)  have access to debt markets. 
C)  have money to invest. 
D)  work hard with the goal of moving up in the management of your employer.

Question 3

If you use a credit card to make purchases,you should make a strong effort to pay off the balance in full each month.

Accepted Answer

A) True 
 B)False

Question 4

Earnings from traditional IRA investments are taxable at the time they are earned.

Accepted Answer

A) True 
 B)False

Question 5

Your personal budget is the same thing as your personal income statement.

Accepted Answer

A) True 
 B)False

Question 6

During her sophomore year in college Melody received a letter indicating she was eligible for a credit card along with a free gift from Metro State Bank.Melody was really excited until she remembered that any cash she has usually "burns a hole" in her pocket.Melody would likely not be successful with a credit card because:

Accepted Answer

A)  she has difficulty in getting access to credit. 
B)  she would use it to make impulse purchases that she could not afford. 
C)  she would not spend up to the limit immediately. 
D)  her dad would not agree to cosign for her. 
A)  she has difficulty in getting access to credit. 
B)  she would use it to make impulse purchases that she could not afford. 
C)  she would not spend up to the limit immediately. 
D)  her dad would not agree to cosign for her.

Question 7

When you buy a home,the monthly payments for the home may remain relatively fixed,but your payments for taxes and utilities are likely to increase.

Accepted Answer

A) True 
 B)False

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

Which of the following is a benefit of buying a home rather than renting?

Accepted Answer

A)  Real estate taxes and utilities will be fixed. 
B)  It reduces the need to carry insurance. 
C)  Paying for a home is a good way to force yourself to save. 
D)  The entire purchase price of the home can be deducted from taxable income,but this deduction must be spread over at least 15 years. 
A)  Real estate taxes and utilities will be fixed. 
B)  It reduces the need to carry insurance. 
C)  Paying for a home is a good way to force yourself to save. 
D)  The entire purchase price of the home can be deducted from taxable income,but this deduction must be spread over at least 15 years.

Question 10

Employees of small businesses can contribute to a Keogh plan.

Accepted Answer

A) True 
 B)False

Question 11

Bob's credit card charges him 14% interest on his unpaid balance.His bank is offering him 5% interest on a savings account.The first thing Bob should do with any extra money he may have is to:

Accepted Answer

A)  invest in the stock market. 
B)  open a savings account. 
C)  pre-pay for necessities,like rent and utilities. 
D)  pay off the credit card balance. 
A)  invest in the stock market. 
B)  open a savings account. 
C)  pre-pay for necessities,like rent and utilities. 
D)  pay off the credit card balance.

Question 12

A retirement plan where employers often match part of an employee's contribution is known as a:

Accepted Answer

A)  simple IRA. 
B)  Roth IRA. 
C)  Keogh plan. 
D)  401(k)plan. 
A)  simple IRA. 
B)  Roth IRA. 
C)  Keogh plan. 
D)  401(k)plan.

Question 13

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 14

The first step in getting control of your finances is to prepare a budget.

Accepted Answer

A) True 
 B)False

Question 15

Wendy wants to obtain life insurance at the lowest possible cost,but is leery of term insurance because she has heard the premiums tend to go up every few years.One way for her to avoid this concern would be to purchase multiyear level-premium insurance.

Accepted Answer

A) True 
 B)False

Question 16

________ life insurance offers pure insurance protection for a given period of time.

Accepted Answer

A)  Term 
B)  Temporary 
C)  Managed premium 
D)  Equity-based 
A)  Term 
B)  Temporary 
C)  Managed premium 
D)  Equity-based

Question 17

Employers often match part of the contribution of their employees into a 401(k)retirement plan.

Accepted Answer

A) True 
 B)False

Question 18

What are the advantages of investing in a home?

Accepted Answer

One of the better investments persons ca

Question 19

Slobo is an immigrant to the United States from a formerly communist country.He is searching for advice to help him 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 20

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Accepted Answer

A) True 
 B)False

Exam 22: Appendix B: Managing Risk

When young people decide to buy a house,the best approach is to buy a house in an inexpensive part of town so they can get a larger house for less money.

The path to success in a capitalist system is to:

If you use a credit card to make purchases,you should make a strong effort to pay off the balance in full each month.

Earnings from traditional IRA investments are taxable at the time they are earned.

Your personal budget is the same thing as your personal income statement.

When you buy a home,the monthly payments for the home may remain relatively fixed,but your payments for taxes and utilities are likely to increase.

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

Which of the following is a benefit of buying a home rather than renting?

Employees of small businesses can contribute to a Keogh plan.

Bob's credit card charges him 14% interest on his unpaid balance.His bank is offering him 5% interest on a savings account.The first thing Bob should do with any extra money he may have is to:

A retirement plan where employers often match part of an employee's contribution is known as a:

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.

The first step in getting control of your finances is to prepare a budget.

Wendy wants to obtain life insurance at the lowest possible cost,but is leery of term insurance because she has heard the premiums tend to go up every few years.One way for her to avoid this concern would be to purchase multiyear level-premium insurance.

________ life insurance offers pure insurance protection for a given period of time.

Employers often match part of the contribution of their employees into a 401(k)retirement plan.

What are the advantages of investing in a home?

Slobo is an immigrant to the United States from a formerly communist country.He is searching for advice to help him succeed in a capitalist system.He would be well advised to:

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics 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

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

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 A: Using Technology to Manage Information

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