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Exam 25: Extension: Managing Personal Finances

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Question 51

Multiple Choice

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One strategy to lower the cost of automobile insurance is to purchase a policy with a:

A) low deductible.
B) high deductible.
C) liability coverage rider.
D) health coverage rider.

E) B) and C)
F) A) and B)

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Question 52

True/False

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

A) True
B) False

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Question 53

Multiple Choice

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During her sophomore year in college Melody received a letter indicating she was eligible for a credit card along with a free gift from Metro State Bank. Melody was really excited until she remembered that any cash she has usually "burns a hole" in her pocket. Melody would likely not be successful with a credit card because:

Hernando and Margarita have decided to take out an umbrella policy from an insurance company. The main reason they would probably want to do this would be to:

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

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

Multiyear level-premium insurance is a form of term insurance with fixed premiums for the life of the policy.

A benefit of using credit cards is that they:

MyIRA is a Roth IRA-type retirement savings plan for low and middle-income individuals.

Both the Roth and traditional IRA allow individuals to put as much money as they want into their retirement account.

Petulia has been following the stock market, and has noticed that it has generally been declining for the last several weeks. Many of her friends have sold stock, but Petulia looks at this situation as a good opportunity to buy. Petulia's views are consistent with the ___________ approach to investing in the stock market.

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

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

As a recent college graduate just starting out on his own, Greg needs health, disability, car, and auto insurance. He may be able to save money by obtaining an umbrella policy.

If you have minor children, the first step in estate planning is to select their guardian.

________ life insurance offers pure insurance protection for a given period of time.

Ricardo desires to reduce his current taxable income and save for retirement. He should consider a traditional IRA.

Which of the following is a benefit unique to buying a duplex, as opposed to the purchase of a single-family home?

Which of the following is an indication that the government has recognized that problems with Social Security funding make it highly unlikely that future Social Security benefits will be sufficient to provide retirees with enough income for a comfortable retirement?

Managing the finances of a household is similar to managing the finances of a small business.