Question 1

Most financial experts believe that the stock market is likely to grow more slowly in the future than it did in the last 50 years.

Accepted Answer

A) True 
 B)False

Question 2

A Roth IRA allows workers who qualify to get an up-front deduction for any money they invest in the plan.

Accepted Answer

A) True 
 B)False

Question 3

Given a 25% tax bracket, the after-tax cost of a house mortgage interest payment of $1,000 would be:

Accepted Answer

A)  $ 250. 
B)  $ 750. 
C)  $1,000. 
D)  $1,250. 
A)  $ 250. 
B)  $ 750. 
C)  $1,000. 
D)  $1,250.

Question 4

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)  international 
A)  nonprofit 
B)  small 
C)  big 
D)  international

Question 5

What are the advantages of investing in a home?

Accepted Answer

One of the better investments persons ca

Question 6

Henry and Mila are newlyweds and received some very expensive wedding gifts, including some beautiful silverware and jewelry. Their homeowner's policy

Accepted Answer

A)  automatically covers these items. 
B)  does not automatically cover such items and they must take out a separate policy specifically for those types of items. 
C)  does not automatically cover these items, but a rider can be used to add this coverage. 
D)  automatically covers these items from theft, but not from damage due to fire, explosion, or vandalism. 
A)  automatically covers these items. 
B)  does not automatically cover such items and they must take out a separate policy specifically for those types of items. 
C)  does not automatically cover these items, but a rider can be used to add this coverage. 
D)  automatically covers these items from theft, but not from damage due to fire, explosion, or vandalism.

Question 7

Your chances of becoming disabled at an early age are ________ than your chance of dying from an accident.

Accepted Answer

A)  the same 
B)  much less 
C)  much greater 
D)  slightly less 
A)  the same 
B)  much less 
C)  much greater 
D)  slightly less

Question 8

The first step in getting control of your finances is to prepare a budget.

Accepted Answer

A) True 
 B)False

Question 9

A financial planner would encourage you to borrow money

Accepted Answer

A)  only to buy assets that are likely to generate income or increase in value. 
B)  to pay your day-to-day expenses and then to invest your income. 
C)  only when facing bankruptcy. 
D)  in order to reduce your debt level. 
A)  only to buy assets that are likely to generate income or increase in value. 
B)  to pay your day-to-day expenses and then to invest your income. 
C)  only when facing bankruptcy. 
D)  in order to reduce your debt level.

Question 10

The tax shelter offered by home ownership increases the overall cost of owning your home.

Accepted Answer

A) True 
 B)False

Question 11

An advantage of both traditional and Roth IRAs is that both the income invested and the earnings from these investments are never taxed.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Personal financial planners recommend renting a home, rather than incurring the cost of buying a home.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an indication that the government recognizes Social Security money will not provide you with ample funds for retirement?

Accepted Answer

A)  The government has provided cost-of-living adjustments to Social Security recipients. 
B)  The government has invested the contributions in high-yielding investment securities. 
C)  The government has established incentives for workers to save their own money for retirement. 
D)  The government has passed legislation to require Social Security to maintain a balanced budget. 
A)  The government has provided cost-of-living adjustments to Social Security recipients. 
B)  The government has invested the contributions in high-yielding investment securities. 
C)  The government has established incentives for workers to save their own money for retirement. 
D)  The government has passed legislation to require Social Security to maintain a balanced budget.

Question 15

A(n) ________ is a personal financial plan that allows you to take control of future spending.

Accepted Answer

A)  expense tracker 
B)  revenue sheet 
C)  budget 
D)  debt manager 
A)  expense tracker 
B)  revenue sheet 
C)  budget 
D)  debt manager

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

Once you have evaluated your current financial situation and know your sources of income and expenses, you have reached the point where you can establish a personal budget.

Accepted Answer

A) True 
 B)False

Question 18

With respect to personal financial planning, the first thing to do with any extra money you have is to start a savings plan.

Accepted Answer

A) True 
 B)False

Question 19

A common purpose of a rider added to a homeowner's policy is to

Accepted Answer

A)  provide coverage for items that the standard policy does not cover. 
B)  limit the insurance company's liability for certain types of losses. 
C)  waive the provision that requires the owners to get a health exam. 
D)  allow the policy holder to obtain health, disability, and auto insurance under their homeowner's plan. 
A)  provide coverage for items that the standard policy does not cover. 
B)  limit the insurance company's liability for certain types of losses. 
C)  waive the provision that requires the owners to get a health exam. 
D)  allow the policy holder to obtain health, disability, and auto insurance under their homeowner's plan.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 24: Managing Personal Finances

Most financial experts believe that the stock market is likely to grow more slowly in the future than it did in the last 50 years.

A Roth IRA allows workers who qualify to get an up-front deduction for any money they invest in the plan.

Given a 25% tax bracket, the after-tax cost of a house mortgage interest payment of $1,000 would be:

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

What are the advantages of investing in a home?

Henry and Mila are newlyweds and received some very expensive wedding gifts, including some beautiful silverware and jewelry. Their homeowner's policy

Your chances of becoming disabled at an early age are ________ than your chance of dying from an accident.

The first step in getting control of your finances is to prepare a budget.

A financial planner would encourage you to borrow money

The tax shelter offered by home ownership increases the overall cost of owning your home.

An advantage of both traditional and Roth IRAs is that both the income invested and the earnings from these investments are never taxed.

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

Personal financial planners recommend renting a home, rather than incurring the cost of buying a home.

Which of the following is an indication that the government recognizes Social Security money will not provide you with ample funds for retirement?

A(n) ________ is a personal financial plan that allows you to take control of future spending.

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.

Once you have evaluated your current financial situation and know your sources of income and expenses, you have reached the point where you can establish a personal budget.

With respect to personal financial planning, the first thing to do with any extra money you have is to start a savings plan.

A common purpose of a rider added to a homeowner's policy is to

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

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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