Question 1

Mortgage interest payments and property taxes are

Accepted Answer

A)  tax deductible for homeowners. 
B)  expenses that make home ownership less attractive than renting. 
C)  both likely to increase each year at a faster rate than your income. 
D)  both likely to decline the longer you own the home. 
A)  tax deductible for homeowners. 
B)  expenses that make home ownership less attractive than renting. 
C)  both likely to increase each year at a faster rate than your income. 
D)  both likely to decline the longer you own the home.

Question 2

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

Accepted Answer

A)  net income 
B)  net worth 
C)  tax base 
D)  cash equivalent value 
A)  net income 
B)  net worth 
C)  tax base 
D)  cash equivalent value

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The tax-sheltered program to encourage self-employed people to accumulate retirement funds is called a(n)

Accepted Answer

A)  401(k) plan. 
B)  IRA plan. 
C)  COLA plan. 
D)  Keogh plan. 
A)  401(k) plan. 
B)  IRA plan. 
C)  COLA plan. 
D)  Keogh plan.

Question 5

During the first few years of a home mortgage, almost all the payments go for interest on the loan. This high interest is a reason it is better for young people to rent rather than buy.

Accepted Answer

A) True 
 B)False

Question 6

A retirement plan where employers often match part of an employee's contribution is known as a

Accepted Answer

A)  simple IRA. 
B)  Roth IRA. 
C)  Keogh plan. 
D)  401(k) plan. 
A)  simple IRA. 
B)  Roth IRA. 
C)  Keogh plan. 
D)  401(k) plan.

Question 7

A(n) ________ is the person named in a will to assemble and value the assets of the deceased, handle tax matters, and distribute the assets.

Accepted Answer

A)  executor 
B)  guardian 
C)  arbiter 
D)  intermediator 
A)  executor 
B)  guardian 
C)  arbiter 
D)  intermediator

Question 8

Dmitry emigrated to the United States from a formerly communist country. He is looking to you for advice on how to succeed in a capitalist system. He would be well advised to

Accepted Answer

A)  find a job and live frugally in order to save money to invest. 
B)  rely heavily on government assistance programs to maintain a relatively comfortable life style. 
C)  get a credit card, even if it has a very low credit limit, and use it to establish a good credit rating. 
D)  follow the buy now, pay later rule of personal finance. 
A)  find a job and live frugally in order to save money to invest. 
B)  rely heavily on government assistance programs to maintain a relatively comfortable life style. 
C)  get a credit card, even if it has a very low credit limit, and use it to establish a good credit rating. 
D)  follow the buy now, pay later rule of personal finance.

Question 9

In order to accumulate capital, young adults are likely to have to

Accepted Answer

A)  accept a lifestyle that sacrifices some amenities. 
B)  live beyond their means. 
C)  rely on credit cards for basic purchases in order to conserve on cash. 
D)  borrow funds from a bank. 
A)  accept a lifestyle that sacrifices some amenities. 
B)  live beyond their means. 
C)  rely on credit cards for basic purchases in order to conserve on cash. 
D)  borrow funds from a bank.

Question 10

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

The people who assist families in developing a comprehensive program that covers investments, taxes, insurance, and retirement plans are called

Accepted Answer

A)  insurance salespeople. 
B)  financial planners. 
C)  portfolio managers. 
D)  stockbrokers. 
A)  insurance salespeople. 
B)  financial planners. 
C)  portfolio managers. 
D)  stockbrokers.

Question 13

Identify and discuss the six steps that individuals can take to gain control of their personal finances.

Accepted Answer

Step 1. Take inventory of your financial

Question 14

Describe the major steps involved in estate planning.

Accepted Answer

For people with young children, the firs

Question 15

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

Accepted Answer

A)  interest rate on the mortgage. 
B)  style and design features built into the home. 
C)  location of the home. 
D)  size of the home. 
A)  interest rate on the mortgage. 
B)  style and design features built into the home. 
C)  location of the home. 
D)  size of the home.

Question 16

According to contrarians, the big decline in the stock market during the Great Recession was

Accepted Answer

A)  a great opportunity to invest in stocks. 
B)  proof that the stock market was not as sound an investment as most people thought. 
C)  a sign that more government regulation was needed to prevent big losses. 
D)  proof that the future of capitalism should rely more on small, unincorporated businesses rather than big corporations. 
A)  a great opportunity to invest in stocks. 
B)  proof that the stock market was not as sound an investment as most people thought. 
C)  a sign that more government regulation was needed to prevent big losses. 
D)  proof that the future of capitalism should rely more on small, unincorporated businesses rather than big corporations.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

During her sophomore year in college Carrie received an email from First Bank telling her she was eligible for a credit card along with a free gift. Carrie was excited until she remembered that any cash she has usually "burns a hole" in her pocket, and she spends it quickly. Carrie would likely not be successful with a credit card because

Accepted Answer

A)  she has difficulty in getting access to credit. 
B)  she would use it to make impulse purchases that she could not afford. 
C)  she would not spend up to the limit immediately. 
D)  her dad would not agree to cosign for her. 
A)  she has difficulty in getting access to credit. 
B)  she would use it to make impulse purchases that she could not afford. 
C)  she would not spend up to the limit immediately. 
D)  her dad would not agree to cosign for her.

Question 19

One of the keys to financial success is never to apply for a credit card.

Accepted Answer

A) True 
 B)False

Question 20

Once you have set up a budget and handled your ordinary expenses, the first thing to do with any extra money you have is to

Accepted Answer

A)  start a savings plan. 
B)  pay off your debts. 
C)  start your own business. 
D)  spend it on the things you would like but that aren't included in your budget. 
A)  start a savings plan. 
B)  pay off your debts. 
C)  start your own business. 
D)  spend it on the things you would like but that aren't included in your budget.

Exam 24: Managing Personal Finances

Mortgage interest payments and property taxes are

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

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

The tax-sheltered program to encourage self-employed people to accumulate retirement funds is called a(n)

During the first few years of a home mortgage, almost all the payments go for interest on the loan. This high interest is a reason it is better for young people to rent rather than buy.

A retirement plan where employers often match part of an employee's contribution is known as a

A(n) ________ is the person named in a will to assemble and value the assets of the deceased, handle tax matters, and distribute the assets.

Dmitry emigrated to the United States from a formerly communist country. He is looking to you for advice on how to succeed in a capitalist system. He would be well advised to

In order to accumulate capital, young adults are likely to have to

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

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.

The people who assist families in developing a comprehensive program that covers investments, taxes, insurance, and retirement plans are called

Identify and discuss the six steps that individuals can take to gain control of their personal finances.

Describe the major steps involved in estate planning.

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

According to contrarians, the big decline in the stock market during the Great Recession was

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

One of the keys to financial success is never to apply for a credit card.

Once you have set up a budget and handled your ordinary expenses, the first thing to do with any extra money you have is to

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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