Question 1

Obsolete knowledge is that which we believe may have been valid at one time.

Accepted Answer

A) True 
 B)False

Question 2

Employer-sponsored retirement plans include all of the following except

Accepted Answer

A) 401(k). 
B) 403(b). 
C) 457. 
D) IRA. 
A) 401(k). 
B) 403(b). 
C) 457. 
D) IRA.

Question 3

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called

Accepted Answer

A) stagflation. 
B) deleveraging. 
C) implosion. 
D) inversion. 
A) stagflation. 
B) deleveraging. 
C) implosion. 
D) inversion.

Question 4

During expansion,which of the following is high?

Accepted Answer

A) Unemployment 
B) Inflation 
C) Interest rates 
D) Retail sales 
A) Unemployment 
B) Inflation 
C) Interest rates 
D) Retail sales

Question 5

Smart investors recognize that the degree of inflation risk is higher for long-term lending than for short-term lending.

Accepted Answer

A) True 
 B)False

Question 6

Dan just received a $2,000 end-of-year bonus from his employer.If he pays a 25 percent marginal tax rate for federal income taxes,his state income tax is 5 percent,and the Social Security tax rate is 7.65 percent,approximately how much of the $2,000 bonus will Dan have left to spend on holiday gifts?

Accepted Answer

A) $2,000 
B) $1,400 
C) $1,247 
D) $753 
A) $2,000 
B) $1,400 
C) $1,247 
D) $753

Question 7

If over the past few years,the price of houses has been increasing at an annual rate of 4 percent nationally.How many years will it take for costs to double at this rate?

Accepted Answer

A) 7 
B) 9 
C) 15 
D) 18 
A) 7 
B) 9 
C) 15 
D) 18

Question 8

Simple interest is always assumed in time value of money calculations.

Accepted Answer

A) True 
 B)False

Question 9

When one forgoes buying a new television set because he or she spends the money on college books,the television set is the opportunity cost of buying the books.

Accepted Answer

A) True 
 B)False

Question 10

When forecasting long-term inflation rates for financial planning purposes,it is better to err on the high side rather than on the low side.

Accepted Answer

A) True 
 B)False

Question 11

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a

Accepted Answer

A) fiduciary standard. 
B) fee-only standard. 
C) commision-only standard. 
D) suitability standard. 
A) fiduciary standard. 
B) fee-only standard. 
C) commision-only standard. 
D) suitability standard.

Question 12

According to economic theory,people will seek additional utility as long as marginal utility exceeds marginal cost.

Accepted Answer

A) True 
 B)False

Question 13

Health savings accounts (HSAs) are intended for people who elect a high-deductible health care plan

Accepted Answer

A) True 
 B)False

Question 14

All things considered,a saver who earns 6 percent interest on a savings account when the rate of inflation is 6 percent is losing real purchasing power.

Accepted Answer

A) True 
 B)False

Question 15

The U.S.economy is capitalism.

Accepted Answer

A) True 
 B)False

Question 16

Financially successful people often pay U.S.federal income taxes at the 25 percent,or higher,marginal tax rate.

Accepted Answer

A) True 
 B)False

Question 17

Jeremiah and Sara's family income increased from $60,000 to $63,000 in the past year.Inflation was 2 percent over the same time period.Which of the following is true regarding Jeremiah and Sara's income?

Accepted Answer

A) Their nominal income increased 4.8 percent. 
B) Their nominal income increased 5 percent. 
C) Their real income decreased 2 percent. 
D) Their real income decreased 5 percent. 
A) Their nominal income increased 4.8 percent. 
B) Their nominal income increased 5 percent. 
C) Their real income decreased 2 percent. 
D) Their real income decreased 5 percent.

Question 18

Financial success is marked by having high wealth.

Accepted Answer

A) True 
 B)False

Question 19

Brice is going to purchase a hi-def,flat-screen TV.He has decided on everything except the screen size.The unit with the 42-inch screen costs $600 while the unit with the 47-inch screen costs $750.In making this decision,which concept should Brice use?

Accepted Answer

A) Marginal utility 
B) Time value of money 
C) Total utility 
D) Marginal tax rates 
A) Marginal utility 
B) Time value of money 
C) Total utility 
D) Marginal tax rates

Question 20

A flexible spending account (FSA) is

Accepted Answer

A) a vehicle that allows employee-paid expenses for medical or dependent care to be paid with pretax dollars. 
B) available through all employers. 
C) funded by an employer. 
D) taxable income received by the employee if not used by the end of the year. 
A) a vehicle that allows employee-paid expenses for medical or dependent care to be paid with pretax dollars. 
B) available through all employers. 
C) funded by an employer. 
D) taxable income received by the employee if not used by the end of the year.

Obsolete knowledge is that which we believe may have been valid at one time.

Employer-sponsored retirement plans include all of the following except

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called

During expansion,which of the following is high?

Smart investors recognize that the degree of inflation risk is higher for long-term lending than for short-term lending.

If over the past few years,the price of houses has been increasing at an annual rate of 4 percent nationally.How many years will it take for costs to double at this rate?

Simple interest is always assumed in time value of money calculations.

When one forgoes buying a new television set because he or she spends the money on college books,the television set is the opportunity cost of buying the books.

When forecasting long-term inflation rates for financial planning purposes,it is better to err on the high side rather than on the low side.

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a

According to economic theory,people will seek additional utility as long as marginal utility exceeds marginal cost.

Health savings accounts (HSAs) are intended for people who elect a high-deductible health care plan

All things considered,a saver who earns 6 percent interest on a savings account when the rate of inflation is 6 percent is losing real purchasing power.

The U.S.economy is capitalism.

Financially successful people often pay U.S.federal income taxes at the 25 percent,or higher,marginal tax rate.

Jeremiah and Sara's family income increased from $60,000 to $63,000 in the past year.Inflation was 2 percent over the same time period.Which of the following is true regarding Jeremiah and Sara's income?

Financial success is marked by having high wealth.

Brice is going to purchase a hi-def,flat-screen TV.He has decided on everything except the screen size.The unit with the 42-inch screen costs $600 while the unit with the 47-inch screen costs $750.In making this decision,which concept should Brice use?

A flexible spending account (FSA) is

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters

Exam 1: Understanding Personal Finance

Obsolete knowledge is that which we believe may have been valid at one time.

Employer-sponsored retirement plans include all of the following except

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called

During expansion,which of the following is high?

Smart investors recognize that the degree of inflation risk is higher for long-term lending than for short-term lending.

If over the past few years,the price of houses has been increasing at an annual rate of 4 percent nationally.How many years will it take for costs to double at this rate?

Simple interest is always assumed in time value of money calculations.

When one forgoes buying a new television set because he or she spends the money on college books,the television set is the opportunity cost of buying the books.

When forecasting long-term inflation rates for financial planning purposes,it is better to err on the high side rather than on the low side.

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a

According to economic theory,people will seek additional utility as long as marginal utility exceeds marginal cost.

Health savings accounts (HSAs) are intended for people who elect a high-deductible health care plan

All things considered,a saver who earns 6 percent interest on a savings account when the rate of inflation is 6 percent is losing real purchasing power.

The U.S.economy is capitalism.

Financially successful people often pay U.S.federal income taxes at the 25 percent,or higher,marginal tax rate.

Jeremiah and Sara's family income increased from $60,000 to $63,000 in the past year.Inflation was 2 percent over the same time period.Which of the following is true regarding Jeremiah and Sara's income?

Financial success is marked by having high wealth.

Brice is going to purchase a hi-def,flat-screen TV.He has decided on everything except the screen size.The unit with the 42-inch screen costs $600 while the unit with the 47-inch screen costs $750.In making this decision,which concept should Brice use?

A flexible spending account (FSA) is

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters