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Exam 24: Appendix: Managing Personal Finances

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Question 91

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If your personal liabilities exceed your assets, you are on the road to financial security.

A) True
B) False

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Question 92

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Connor is worried that his health may soon deteriorate to the point where he will no longer be able to take care of his own finances. One way he could ease his mind would be to

A) name an executor to his will.
B) prepare a durable power of attorney.
C) transfer title to all of his real estate and financial assets to a relative he trusts.
D) invest all of his financial assets into a Keogh plan.

E) C) and D)
F) B) and D)

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Question 93

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If possible, it is almost always better to buy a single home rather than an attached home.

Almost ________ U.S. adults has accumulated enough money by retirement age to live comfortably.

Once Ira and Penny achieved a more solid financial foundation, they began to consider the purchase of a home. From a financial standpoint, a sound strategy for them to consider would be to

Though stock prices do sometimes go down, investing in the stock market has generally provided very attractive returns over the long run.

A Roth IRA offers employees an incentive to save for their retirement by

The person who is named in your will to assemble the assets in your estate, handle taxes, and distribute the assets is called your proxy.

Credit-card debt represents an asset on a consumer's balance sheet.

Christian quit his job to open his own online consulting business. He now realizes that he no longer has the benefit of a corporate retirement system. He should consider investing in a(n)

The tax-deferred investment plan that allows employees to save part of their income for retirement is called a(n)

Most homeowner's insurance policies do not cover certain types of expensive items unless you purchase a rider for the additional coverage.

Throughout history an investment in ________ has yielded an excellent return, regardless of the state of the economy or political changes.

If you are in the 25 percent tax bracket and your home mortgage interest is $1,000 per month, then your after-tax mortgage interest cost is $750 per month.

The factor likely to have the greatest impact on how fast the value of a home appreciates over time is the

Joe wants life insurance to provide benefits for his family if he were to die. He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age. His best strategy to achieve insurance and savings with one premium is term insurance.

Denny plans to start his business program this semester at a local university. Denny will likely find that

Your big-screen HDTV would be listed as an asset on your personal balance sheet. However, the loan you took out to buy the TV would be listed as a personal liability.

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.

When you prepare your personal balance sheet, remember that your ________ is equal to your total assets minus any liabilities you have.