Deck 21: Personal Finance

Question 1

An arrangement that pays for a hospital stay is ________ insurance.

A) car
B) health
C) disability
D) life
E) homeowner's

Answer 1

B

Question 2

Making a spending plan is an example of which step in financial planning?

A) create a budget
B) execute the plan
C) set financial goals
D) take a financial inventory
E) know where your money goes

Answer 2

A

Question 3

What one owns minus what one owes is ________.

A) assets
B) liabilities
C) gross worth
D) net worth
E) credit card balance

Answer 3

D

Question 4

An arrangement that replaces the income of a person who dies is ________ insurance.

A) disability
B) health
C) life
D) death
E) homeowner's

Question 5

All of the following are deductions from taxable income EXCEPT ________.

A) financial payments to a tax-deferred retirement plan
B) financial payments to charity
C) financial payments for personal clothing
D) financial payments for interest on mortgages
E) financial payments for medical expenses

Question 6

Planning to buy a house in ten years is an example of financial planning step 2: set financial goals.

Question 7

Special retirement AFTER-TAX savings accounts created by the government are ________.

A) IRAs
B) pension plans
C) 403(b) plans
D) Roth IRAs
E) 401(k) plans

Question 8

Paying off all credit card debt is an example of which step of financial planning?

A) take a financial inventory
B) know where your money goes
C) execute the plan
D) monitor and assess your plan
E) create a budget

Question 9

You were in the bookstore and,at the last minute,decided to buy a pack of gum.The gum is MOST LIKELY an example of a(n)________ expense.

A) variable
B) invisible
C) fixed
D) periodic
E) budgeted

Question 10

Special retirement pretax savings accounts created by the government are ________.

A) Roth IRAs
B) pension plans
C) IRAs
D) NDAs
E) 401(k) plans

Question 11

What is the first step in developing a financial plan?

A) set financial goals
B) know where your money goes
C) take a financial inventory
D) create a budget
E) execute the plan

Question 12

________ expenses are items such as taxes or donations that are paid,but not on a monthly basis.

A) Invisible
B) Fixed
C) Periodic
D) Unexpected
E) Invariable

Question 13

Monthly student loan payments are an example of a(n)________ expense.

A) variable
B) unexpected
C) invisible
D) fixed
E) periodic

Question 14

At 3 percent interest,it will take ________ years to double an amount of money invested.

A) 24
B) 36
C) 72
D) 12
E) 48

Question 15

The value of a new car depreciates ________ percent almost as soon as it is driven off the dealer's lot.

A) 100
B) 60 to 70
C) 40 to 50
D) 20 to 30
E) 0 to 10

Question 16

When an individual or a family manages the ways in which monies are budgeted,saved,invested,preserved for future life events,and protected against risks,it is called ________.

A) personal management
B) corporate finance
C) corporate management
D) personal finance
E) fiscal irresponsibility

Question 17

An arrangement that pays to replace your possessions if they are stolen is ________ insurance.

A) health
B) homeowner's
C) life
D) disability
E) malpractice

Question 18

Money management is critical for corporations,but not for individuals.

Question 19

To use a credit card wisely,pay off the balance in full every ________.

A) year
B) month
C) quarter
D) ten years
E) two years

Question 20

You earned $20,000 in taxable income.The tax rate on the first $10,000 is 10%.The tax rate on income between $10,001 and $20,000,inclusive,is 20%.Your tax is ________.

A) $10,000
B) $1,000
C) $2,000
D) $3,000
E) $4,000

Question 21

It is not at all necessary to revisit a financial plan periodically.

Question 22

What is a credit score?

Question 23

What is compound interest?

Question 24

Pension plans are retirement plans established by your employer.

Question 25

Disability insurance protects your home and the contents inside.

Question 26

Give an example of an unexpected expense.

Question 27

One way to establish credit is to begin with a single store credit card or a single-purpose credit card,such as a gas card.

Question 28

Tax rates progressively increase as income increases.

Question 29

Showing future lenders that you have a good history with credit will help you when you apply for car loans or a mortgage.

Question 30

What is the difference between defined benefit plans and defined contribution plans?

Question 31

If you are insuring an older car,it always makes financial sense to carry the cost of collision and comprehensive coverage.

Question 32

How can online resources and software help with money management?

Question 33

If you are self-employed or your employer does not offer retirement benefits,you should set up your own retirement program.