Question 1

About _______ of all U.S. households own stock in corporations.

Accepted Answer

A)   16 percent
B)   30 percent
C)   half
D)   three-fourthsE) B) and D)
F) C) and D)

Question 2

Many employers offer health insurance coverage for their full-time employees.

Accepted Answer

A) True 
 B)False

Question 3

A _______ is a document that names a guardian for your children, states how you want your assets distributed, and names an executor to handle your estate when you die.

Accepted Answer

A)   trust arrangement
B)   durable power of attorney
C)   proxy sheet
D)   willE) A) and C)
F) All of the above

Question 4

One disadvantage of having credit cards for personal use is that:

Accepted Answer

A)   they offer no protection if they are stolen.
B)   they are less convenient than other forms of credit.
C)   many companies have a policy that prevents employees from having both personal credit cards and credit cards for business use.
D)   they can make it easy to pile up a large amount of debt quickly.E) All of the above
F) A) and C)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Most people find it relatively easy to live frugally.

Accepted Answer

A) True 
 B)False

Question 7

For a young person, one of the worst places to invest money for the long-term is:

Accepted Answer

A)   a duplex.
B)   a bank savings account.
C)   a home.
D)   the stock market.E) None of the above
F) B) and D)

Question 8

Employees of small businesses can contribute to a Keogh plan.

Accepted Answer

A) True 
 B)False

Question 9

One way to motivate yourself to start saving is to visualize your goals and think about how much money it will take to achieve them.

Accepted Answer

A) True 
 B)False

Question 10

Bernie owns a sports card-trading business. He can participate in a Keogh plan to save for his retirement.

Accepted Answer

A) True 
 B)False

Question 11

One danger of a credit card is that consumers often buy items they wouldn't normally buy if they had to pay cash.

Accepted Answer

A) True 
 B)False

Question 12

Carrie 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 13

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.E) None of the above
F) C) and D)

Question 14

The path to success in a capitalist system is to:

Accepted Answer

A)   spend more on capital goods than you do on consumer goods.
B)   have access to debt markets.
C)   have money to invest.
D)   work hard with the goal of moving up in the management of your employer.E) B) and D)
F) B) and C)

Question 15

Jack is thinking about preparing a durable power of attorney. This indicates that he wants to:

Accepted Answer

A)   ensure that a single lawyer will be able to handle all of his legal needs.
B)   declare that his current will is invalid.
C)   eliminate the taxes on his estate when he dies.
D)   appoint someone to take over his finances if he should become incapacitated.E) C) and D)
F) A) and B)

Question 16

You should never borrow to cover regular expenses, but it makes perfectly good sense to use credit to cover unexpected expenses such as car or home repairs.

Accepted Answer

A) True 
 B)False

Question 17

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.E) B) and C)
F) None of the above

Question 18

Unlike whole life policies, a universal life insurance policy typically invests part of the premium in very aggressive, high-risk assets.

Accepted Answer

A) True 
 B)False

Question 19

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Accepted Answer

A) True 
 B)False

Question 20

Your big-screen HDTV would be listed as an asset on your personal balance sheet. However, the loan you took out to buy the TV would be listed as a personal liability.

Accepted Answer

A) True 
 B)False

Exam 25: Extension: Managing Personal Finances

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

Correct AnswerverifiedShow Answer

Investments in IRA accounts:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One disadvantage of having credit cards for personal use is that:

Correct AnswerverifiedShow Answer

Most people find it relatively easy to live frugally.

Correct AnswerverifiedShow Answer

Jack is thinking about preparing a durable power of attorney. This indicates that he wants to:

Correct AnswerverifiedShow Answer

Employees of small businesses can contribute to a Keogh plan.

Correct AnswerverifiedShow Answer

One danger of a credit card is that consumers often buy items they wouldn't normally buy if they had to pay cash.

Correct AnswerverifiedShow Answer

One way to motivate yourself to start saving is to visualize your goals and think about how much money it will take to achieve them.

Correct AnswerverifiedShow Answer

Many employers offer health insurance coverage for their full-time employees.

Correct AnswerverifiedShow Answer

You should never borrow to cover regular expenses, but it makes perfectly good sense to use credit to cover unexpected expenses such as car or home repairs.

Correct AnswerverifiedShow Answer

About _______ of all U.S. households own stock in corporations.

Correct AnswerverifiedShow Answer

For a young person, one of the worst places to invest money for the long-term is:

Correct AnswerverifiedShow Answer

Bernie owns a sports card-trading business. He can participate in a Keogh plan to save for his retirement.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A _______ is a document that names a guardian for your children, states how you want your assets distributed, and names an executor to handle your estate when you die.

Correct AnswerverifiedShow Answer

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Correct AnswerverifiedShow Answer

Your big-screen HDTV would be listed as an asset on your personal balance sheet. However, the loan you took out to buy the TV would be listed as a personal liability.

Correct AnswerverifiedShow Answer

Unlike whole life policies, a universal life insurance policy typically invests part of the premium in very aggressive, high-risk assets.

Correct AnswerverifiedShow Answer

The path to success in a capitalist system is to:

Correct AnswerverifiedShow Answer

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