Question 1

Funds invested in savings accounts and certificates of deposit (CDs) have traditionally outperformed stocks as a means of generating long-term financial gains.

Accepted Answer

A) True 
 B)False

Question 2

A contract that calls for regular payments to an individual for life or for a fixed period of time is called a(n)

Accepted Answer

A)   annuity.
B)   fixed dividend plan.
C)   mutual fund.
D)   level premium agreement.E) C) and D)
F) B) and C)

Question 3

Credit cards can be used to categorize and track your purchases.

Accepted Answer

A) True 
 B)False

Question 4

The number of workers paying into Social Security for each retiree receiving Social Security benefits is

Accepted Answer

A)   fixed by law.
B)   increasing.
C)   decreasing.
D)   not fixed by law, but has remained relatively constant for several decades.E) A) and D)
F) A) and C)

Question 5

The key to generating enough capital for investment for many individuals is to

Accepted Answer

A)   obtain as many credit cards as possible in order to maximize spending power.
B)   live frugally.
C)   borrow money from friends and family.
D)   buy only high-quality consumer goods.E) None of the above
F) A) and D)

Question 6

It is likely that young adults today will benefit from the recent trend in the Social Security system to increase benefits and expand the cost-of-living adjustments.

Accepted Answer

A) True 
 B)False

Question 7

Terrence is in the 30% tax bracket. What is the after-tax cost of a $3,000 contribution to his traditional IRA account?

Accepted Answer

A)   $900
B)   $1,440
C)   $2,100
D)   zeroE) A) and B)
F) C) and D)

Question 8

Tracking business and personal spending by categories is an important technique to control expenditures.

Accepted Answer

A) True 
 B)False

Question 9

A good way to save money is to spend all of your regular income, but have a strict rule to put any money from unexpected or unusual sources (such as overtime pay, bonuses, gifts, gambling payouts, or contest prizes) into a savings account.

Accepted Answer

A) True 
 B)False

Question 10

Investors who desire a very stable and predictable income from their investments (such as people who are nearing retirement) would be reluctant to invest heavily in the stock market.

Accepted Answer

A) True 
 B)False

Question 11

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Accepted Answer

A)   Term
B)   Health
C)   Renters
D)   Homeowner'sE) C) and D)
F) All of the above

Question 12

Social Security is the term used to describe the Old Age, Survivors, and Disability Insurance Program.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Accepted Answer

A)   $ 200
B)   $ 500
C)   $ 750
D)   $1,000E) C) and D)
F) B) and D)

Question 15

Many small-business owners invest in 401(k) plans for their retirement.

Accepted Answer

A) True 
 B)False

Question 16

It is usually better to use any money left after paying monthly bills to pay off debts that carry high interest rates rather than putting that money into a savings account.

Accepted Answer

A) True 
 B)False

Question 17

Variable annuities offer investment choices identical to mutual funds.

Accepted Answer

A) True 
 B)False

Question 18

The simple IRA plans allow employees of ________ companies to contribute larger amounts than the traditional IRA.

Accepted Answer

A)   nonprofit
B)   small
C)   big
D)   internationalE) A) and C)
F) A) and B)

Question 19

A major source of revenue on your personal income statement is your salary or wages from your job.

Accepted Answer

A) True 
 B)False

Question 20

The chances of becoming disabled at an early age are much higher than your chances of dying from an accident.

Accepted Answer

A) True 
 B)False

Exam 24: Appendix: Managing Personal Finances

The chances of becoming disabled at an early age are much higher than your chances of dying from an accident.

Correct AnswerverifiedShow Answer

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Correct AnswerverifiedShow Answer

A good way to save money is to spend all of your regular income, but have a strict rule to put any money from unexpected or unusual sources (such as overtime pay, bonuses, gifts, gambling payouts, or contest prizes) into a savings account.

Correct AnswerverifiedShow Answer

The key to generating enough capital for investment for many individuals is to

Correct AnswerverifiedShow Answer

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Correct AnswerverifiedShow Answer

The simple IRA plans allow employees of ________ companies to contribute larger amounts than the traditional IRA.

Correct AnswerverifiedShow Answer

It is usually better to use any money left after paying monthly bills to pay off debts that carry high interest rates rather than putting that money into a savings account.

Correct AnswerverifiedShow Answer

Social Security is the term used to describe the Old Age, Survivors, and Disability Insurance Program.

Correct AnswerverifiedShow Answer

A major source of revenue on your personal income statement is your salary or wages from your job.

Correct AnswerverifiedShow Answer

It is likely that young adults today will benefit from the recent trend in the Social Security system to increase benefits and expand the cost-of-living adjustments.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Many small-business owners invest in 401(k) plans for their retirement.

Correct AnswerverifiedShow Answer

Credit cards can be used to categorize and track your purchases.

Correct AnswerverifiedShow Answer

Funds invested in savings accounts and certificates of deposit (CDs) have traditionally outperformed stocks as a means of generating long-term financial gains.

Correct AnswerverifiedShow Answer

A contract that calls for regular payments to an individual for life or for a fixed period of time is called a(n)

Correct AnswerverifiedShow Answer

Tracking business and personal spending by categories is an important technique to control expenditures.

Correct AnswerverifiedShow Answer

Investors who desire a very stable and predictable income from their investments (such as people who are nearing retirement) would be reluctant to invest heavily in the stock market.

Correct AnswerverifiedShow Answer

The number of workers paying into Social Security for each retiree receiving Social Security benefits is

Correct AnswerverifiedShow Answer

Terrence is in the 30% tax bracket. What is the after-tax cost of a $3,000 contribution to his traditional IRA account?

Correct AnswerverifiedShow Answer

Variable annuities offer investment choices identical to mutual funds.

Correct AnswerverifiedShow Answer

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