Question 1

Real estate professionals agree that the key to getting the optimum return on the purchase of a home is

Accepted Answer

A)  construction quality. 
B)  location. 
C)  tax advantages. 
D)  design features. 
A)  construction quality. 
B)  location. 
C)  tax advantages. 
D)  design features.

Question 2

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

Accepted Answer

A)  two months 
B)  six months 
C)  one year 
D)  three years 
A)  two months 
B)  six months 
C)  one year 
D)  three years

Question 3

Excessive debt is as much a problem of young consumers as it is of other age groups.

Accepted Answer

A) True 
 B)False

Question 4

Investments in IRA accounts

Accepted Answer

A)  are limited to money market funds and government bonds. 
B)  can be in stocks, bonds, mutual funds, or even precious metals. 
C)  are matched by the employer. 
D)  are taxed at the lowest individual tax rate regardless of the actual tax bracket of the investor. 
A)  are limited to money market funds and government bonds. 
B)  can be in stocks, bonds, mutual funds, or even precious metals. 
C)  are matched by the employer. 
D)  are taxed at the lowest individual tax rate regardless of the actual tax bracket of the investor.

Question 5

Your personal budget is the same thing as your personal income statement.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The younger you are when you buy term life insurance, the lower the premiums tend to be.

Accepted Answer

A) True 
 B)False

Question 10

A person using a credit card to make a purchase may end up paying much more than if he or she had paid cash.

Accepted Answer

A) True 
 B)False

Question 11

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 12

________ insurance provides protection from losses of furniture, appliances, and clothes.

Accepted Answer

A)  Term 
B)  Health 
C)  Disability 
D)  Homeowner's 
A)  Term 
B)  Health 
C)  Disability 
D)  Homeowner's

Question 13

An individual retirement account (IRA) is a tax-deferred investment plan that encourages workers to save for retirement.

Accepted Answer

A) True 
 B)False

Question 14

Mateo and Maya 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

Accepted Answer

A)  protect against major disasters, which are known as "rainy days." 
B)  ensure that any children they have will be guaranteed the right to buy insurance at some future date. 
C)  save money by having one company provide a variety of different types of coverage. 
D)  take out one life insurance policy that covers both of them. 
A)  protect against major disasters, which are known as "rainy days." 
B)  ensure that any children they have will be guaranteed the right to buy insurance at some future date. 
C)  save money by having one company provide a variety of different types of coverage. 
D)  take out one life insurance policy that covers both of them.

Question 15

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 16

Young married couples that find themselves running out of money at the end of the month might be well advised to

Accepted Answer

A)  keep track of all of their expenses. 
B)  keep track of cash spent on major purchases. 
C)  prepare a balance sheet. 
D)  apply for additional credit cards. 
A)  keep track of all of their expenses. 
B)  keep track of cash spent on major purchases. 
C)  prepare a balance sheet. 
D)  apply for additional credit cards.

Question 17

Cynthia is trying to find a way to reduce her car insurance premium. She would be well advised to decrease her insurance policy's deductible.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Financial planners regularly suggest that you borrow money to pay for large purchases.

Accepted Answer

A) True 
 B)False

Question 20

Shulei graduated from college two years ago. She has already accumulated enough money in her savings account and money market to meet her basic needs, and now wants to begin investing a portion of each paycheck to earn a high rate of return over the long run. Shulei's best choice as a young woman would be to put money into a bank savings account regularly.

Accepted Answer

A) True 
 B)False

Exam 24: Appendix: Managing Personal Finances

Real estate professionals agree that the key to getting the optimum return on the purchase of a home is

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

Excessive debt is as much a problem of young consumers as it is of other age groups.

Investments in IRA accounts

Your personal budget is the same thing as your personal income statement.

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

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

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

The younger you are when you buy term life insurance, the lower the premiums tend to be.

A person using a credit card to make a purchase may end up paying much more than if he or she had paid cash.

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.

________ insurance provides protection from losses of furniture, appliances, and clothes.

An individual retirement account (IRA) is a tax-deferred investment plan that encourages workers to save for retirement.

Mateo and Maya 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

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

Young married couples that find themselves running out of money at the end of the month might be well advised to

Cynthia is trying to find a way to reduce her car insurance premium. She would be well advised to decrease her insurance policy's deductible.

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

Financial planners regularly suggest that you borrow money to pay for large purchases.

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

Appendix: Working Within the Legal Environment

Appendix: Using Technology to Manage Information

Appendix: Managing Risk

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