Question 1

Keogh plans are intended to help small business owners save for retirement.

Accepted Answer

A) True 
 B)False

Question 2

Serena is attending her local community college with the goal of getting a good job someday. She knows that financial planning begins first with making money.

Accepted Answer

A) True 
 B)False

Question 3

Earnings from traditional IRA investments are taxable at the time they are earned.

Accepted Answer

A) True 
 B)False

Question 4

The earnings on a traditional IRA are

Accepted Answer

A)  never taxed, in order to encourage people to invest for their retirement. 
B)  tax-free until the Social Security system is improved. 
C)  taxed as income when they are withdrawn after retirement. 
D)  available to the investor without a penalty. 
A)  never taxed, in order to encourage people to invest for their retirement. 
B)  tax-free until the Social Security system is improved. 
C)  taxed as income when they are withdrawn after retirement. 
D)  available to the investor without a penalty.

Question 5

The value of education is often exaggerated when searching for a good job.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The money a worker invests in a 401(k) retirement account reduces that worker's present taxable income.

Accepted Answer

A) True 
 B)False

Question 8

Many insurance providers offer ________ policies that give a discount to families who buy several types of insurance coverage from them.

Accepted Answer

A)  umbrella 
B)  universal 
C)  multi-use 
D)  rider-enhanced 
A)  umbrella 
B)  universal 
C)  multi-use 
D)  rider-enhanced

Question 9

One disadvantage of term life insurance is that

Accepted Answer

A)  when renewed it usually is at a higher premium. 
B)  the risk of lost income from the death of the insured is shifted to the insurance company. 
C)  it is pure insurance protection for a given time period. 
D)  it is generally not available to young people. 
A)  when renewed it usually is at a higher premium. 
B)  the risk of lost income from the death of the insured is shifted to the insurance company. 
C)  it is pure insurance protection for a given time period. 
D)  it is generally not available to young people.

Question 10

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 11

Ryan is in need of advice regarding investments, taxes, and insurance for himself and his family. He would be well advised to seek the advice of an insurance salesperson.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following accounting statements would assist an individual in taking inventory of personal assets and liabilities?

Accepted Answer

A)  income statement 
B)  balance sheet 
C)  budget 
D)  statement of cash flows 
A)  income statement 
B)  balance sheet 
C)  budget 
D)  statement of cash flows

Question 13

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 14

Disability insurance provides a relatively low-cost way of protecting against lost income due to an accident or illness that prevents you from working for an extended period of time.

Accepted Answer

A) True 
 B)False

Question 15

Compare the basic features of the traditional IRA and Roth IRA.

Accepted Answer

Both the traditional and Roth IRAs offer

Question 16

Budgets are

Accepted Answer

A)  useful for businesses, but too restrictive to be used by individuals or households. 
B)  a financial plan of projected revenues and expenses. 
C)  just another name for cash flow statements. 
D)  only helpful to people who earn more than $50,000 per year. 
A)  useful for businesses, but too restrictive to be used by individuals or households. 
B)  a financial plan of projected revenues and expenses. 
C)  just another name for cash flow statements. 
D)  only helpful to people who earn more than $50,000 per year.

Question 17

In order to get in the habit of saving, personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash, savings accounts, CDs, and other liquid assets.

Accepted Answer

A) True 
 B)False

Question 18

Luke wants to get better control of his personal finances. He should begin by setting up a personal balance sheet and a personal income statement.

Accepted Answer

A) True 
 B)False

Question 19

If you are relatively healthy, there is no real reason to buy disability insurance.

Accepted Answer

A) True 
 B)False

Question 20

Nate and Audrey are married and have careers in business. If one of the two were to die, there would be a sudden drop in income. To provide protection from this risk the couple should purchase

Accepted Answer

A)  disability insurance. 
B)  life insurance. 
C)  health insurance. 
D)  car insurance. 
A)  disability insurance. 
B)  life insurance. 
C)  health insurance. 
D)  car insurance.

Exam 24: Managing Personal Finances

Keogh plans are intended to help small business owners save for retirement.

Serena is attending her local community college with the goal of getting a good job someday. She knows that financial planning begins first with making money.

Earnings from traditional IRA investments are taxable at the time they are earned.

The earnings on a traditional IRA are

The value of education is often exaggerated when searching for a good job.

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

The money a worker invests in a 401(k) retirement account reduces that worker's present taxable income.

Many insurance providers offer ________ policies that give a discount to families who buy several types of insurance coverage from them.

One disadvantage of term life insurance is that

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.

Ryan is in need of advice regarding investments, taxes, and insurance for himself and his family. He would be well advised to seek the advice of an insurance salesperson.

Which of the following accounting statements would assist an individual in taking inventory of personal assets and liabilities?

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

Disability insurance provides a relatively low-cost way of protecting against lost income due to an accident or illness that prevents you from working for an extended period of time.

Compare the basic features of the traditional IRA and Roth IRA.

Budgets are

In order to get in the habit of saving, personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash, savings accounts, CDs, and other liquid assets.

Luke wants to get better control of his personal finances. He should begin by setting up a personal balance sheet and a personal income statement.

If you are relatively healthy, there is no real reason to buy disability insurance.

Nate and Audrey are married and have careers in business. If one of the two were to die, there would be a sudden drop in income. To provide protection from this risk the couple should purchase

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Working Within the Legal Environment

Using Technology to Manage Information

Managing Risk

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