Question 1

An individual retirement account (IRA)is a tax-deferred investment plan designed to encourage workers to save for retirement.

Accepted Answer

A) True 
 B)False

Question 2

Bob has decided to contribute $2,800 to a Roth IRA.He is currently in the 25% tax bracket.How will his contribution affect his income tax for the current year?

Accepted Answer

A)  It will reduce the amount of taxes he owes in the current tax year by $700. 
B)  It will increase the amount of taxes he owes in the current year by $700. 
C)  It will reduce the amount of taxes he owes in the current year by $2,100. 
D)  It will have no effect on the amount of taxes he owes this year. 
A)  It will reduce the amount of taxes he owes in the current tax year by $700. 
B)  It will increase the amount of taxes he owes in the current year by $700. 
C)  It will reduce the amount of taxes he owes in the current year by $2,100. 
D)  It will have no effect on the amount of taxes he owes this year.

Question 3

The first step you would take to get control of your personal finances is to:

Accepted Answer

A)  keep track of all your expenses. 
B)  prepare a budget. 
C)  take inventory of your assets. 
D)  start a savings program. 
A)  keep track of all your expenses. 
B)  prepare a budget. 
C)  take inventory of your assets. 
D)  start a savings program.

Question 4

More than half of all debtors seeking help at the National Consumer Counseling Service were between the ages of 18 and 32.

Accepted Answer

A) True 
 B)False

Question 5

For individuals,budgets are usually more trouble than they are worth.

Accepted Answer

A) True 
 B)False

Question 6

Most financial experts will tell you to save about 1 month of earnings for contingency purposes.

Accepted Answer

A) True 
 B)False

Question 7

Unlike whole life policies,a universal life insurance policy typically invests part of the premium in very aggressive,high-risk assets.

Accepted Answer

A) True 
 B)False

Question 8

Mortgage interest payments and property taxes are:

Accepted Answer

A)  tax deductible for homeowners. 
B)  expenses that make home ownership less attractive than renting. 
C)  both likely to increase each year at a faster rate than your income. 
D)  both likely to decline the longer you own the home. 
A)  tax deductible for homeowners. 
B)  expenses that make home ownership less attractive than renting. 
C)  both likely to increase each year at a faster rate than your income. 
D)  both likely to decline the longer you own the home.

Question 9

On your personal balance sheet,your assets should include anything of value that you own.

Accepted Answer

A) True 
 B)False

Question 10

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Accepted Answer

A)  credit cards are no longer accepted in many places as a valid source of credit. 
B)  credit cards require that at least 25% of the balance be paid each month. 
C)  there will be a finance charge even if Hannah pays her entire credit card balance in full and on time. 
D)  the convenience of credit cards can lead to excessive debts. 
A)  credit cards are no longer accepted in many places as a valid source of credit. 
B)  credit cards require that at least 25% of the balance be paid each month. 
C)  there will be a finance charge even if Hannah pays her entire credit card balance in full and on time. 
D)  the convenience of credit cards can lead to excessive debts.

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an advantage of home ownership?

Accepted Answer

A)  Home ownership is a good way to control the costs of utilities,maintenance,and insurance. 
B)  Mortgage interest and real estate taxes are tax deductible. 
C)  Money invested in a house is a highly liquid investment. 
D)  Home ownership provides a guaranteed rate of return that is more stable than the return earned by investing in the stock market. 
A)  Home ownership is a good way to control the costs of utilities,maintenance,and insurance. 
B)  Mortgage interest and real estate taxes are tax deductible. 
C)  Money invested in a house is a highly liquid investment. 
D)  Home ownership provides a guaranteed rate of return that is more stable than the return earned by investing in the stock market.

Question 14

Most families only need to buy enough life insurance to replace about three years of income.

Accepted Answer

A) True 
 B)False

Question 15

IRA funds are not available for withdrawal until you are 59 ½ years old.

Accepted Answer

A) True 
 B)False

Question 16

In order to qualify as a tax shelter,IRA saving plans must be invested in mutual funds.

Accepted Answer

A) True 
 B)False

Question 17

The federal government discourages home ownership through high tax rates.

Accepted Answer

A) True 
 B)False

Question 18

Most people find it relatively easy to live frugally.

Accepted Answer

A) True 
 B)False

Question 19

One disadvantage of having credit cards for personal use is that:

Accepted Answer

A)  they offer no protection if they are stolen. 
B)  they are less convenient than other forms of credit. 
C)  many companies have a policy that prevents employees from having both personal credit cards and credit cards for business use. 
D)  they can make it easy to pile up a large amount of debt quickly. 
A)  they offer no protection if they are stolen. 
B)  they are less convenient than other forms of credit. 
C)  many companies have a policy that prevents employees from having both personal credit cards and credit cards for business use. 
D)  they can make it easy to pile up a large amount of debt quickly.

Question 20

A contrarian would advise you to buy stock when stock prices are falling and most other people are selling.

Accepted Answer

A) True 
 B)False

Exam 22: Appendix B: Managing Risk

An individual retirement account (IRA)is a tax-deferred investment plan designed to encourage workers to save for retirement.

Bob has decided to contribute $2,800 to a Roth IRA.He is currently in the 25% tax bracket.How will his contribution affect his income tax for the current year?

The first step you would take to get control of your personal finances is to:

More than half of all debtors seeking help at the National Consumer Counseling Service were between the ages of 18 and 32.

For individuals,budgets are usually more trouble than they are worth.

Most financial experts will tell you to save about 1 month of earnings for contingency purposes.

Unlike whole life policies,a universal life insurance policy typically invests part of the premium in very aggressive,high-risk assets.

Mortgage interest payments and property taxes are:

On your personal balance sheet,your assets should include anything of value that you own.

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

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

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

Which of the following is an advantage of home ownership?

Most families only need to buy enough life insurance to replace about three years of income.

IRA funds are not available for withdrawal until you are 59 ½ years old.

In order to qualify as a tax shelter,IRA saving plans must be invested in mutual funds.

The federal government discourages home ownership through high tax rates.

Most people find it relatively easy to live frugally.

One disadvantage of having credit cards for personal use is that:

A contrarian would advise you to buy stock when stock prices are falling and most other people are selling.

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

Filters