Deck 13: Managing Money

Question 1

Once you have drafted a monthly budget, you should avoid changing it.

Answer 1

False

Question 2

To avoid identity theft, you should:

A) pay for everything with credit cards
B) not include your birth date on online profiles
C) enter credit card numbers only on public computers
D) always use simple, easy-to-remember passwords online

Answer 2

B

Question 3

Wealth is a solid foundation for positive self-belief.

Answer 3

False

Question 4

Credit ____________________ maintain records of consumers' use of credit.

Question 5

What is the first step in budgeting?

A) examining your values and goals
B) opening a checking account
C) accounting for your income and expenses
D) applying for a loan

Question 6

The financial pyramid model is equally applicable to everyone.

Question 7

When you use a(n) ____________________ card, the money is automatically subtracted from your checking or savings account.

Question 8

Bonds:

A) are less risky than stocks
B) have less profit potential than stocks
C) usually pay interest before they mature
D) all of these choices

Question 9

Rent, mortgage payments, car payments, and insurance payments are examples of ____________________ expenses.

Question 10

What forms the base of the financial pyramid?

A) your basic living expenses
B) your values and goals
C) your savings, credit, and insurance
D) home ownership

Question 11

What do most people use to pay routine bills?

A) an IRA
B) a checking account
C) a certificate of deposit
D) a money market account

Question 12

The cost of credit varies widely, depending on the source.

Question 13

The amount of money a policyholder must pay before an insurance company begins paying on a claim is:

A) the liability
B) the comprehensive
C) the fee for service
D) the deductible

Question 14

The interest rate charged on credit is:

A) the annual percentage rate (APR)
B) the finance charge
C) the credit limit
D) none of these choices

Question 15

To begin budgeting, you should track your income and expenses for a couple of months.

Question 16

The amount of your paycheck after deductions for taxes, insurance, and retirement contributions is your:

A) gross income
B) net income
C) variable expenses
D) none of these choices

Question 17

It is a good idea to set aside two to six months' income in a(n) ____________________ fund to help cover unplanned expenses and unexpected loss of income.

Question 18

Certificates of deposit:

A) tie up your money
B) have variable interest rates
C) are used to save for retirement
D) all of these choices

Question 19

A(n) ____________________ is a plan based on your short-, intermediate-, and long-term financial goals.

Question 20

Which of the following is not one of the four A's of budgeting?

A) accounting for income and expenses
B) analyzing your situation
C) amortizing your obligations
D) adjusting your budget