Question 1

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 yearsE) A) and C)
F) A) and D)

Question 2

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) A) and B)
F) A) and C)

Question 3

The reason you would prepare a durable power of attorney is to make sure that someone was named to take over your finances if you become incapacitated.

Accepted Answer

A) True 
 B)False

Question 4

Most financial experts will tell you to save about 1 month of earnings for contingency purposes.

Accepted Answer

A) True 
 B)False

Question 5

Harriett has just made out a will.The will names her brother Harold as the executor.This means that Harold will have the authority to take over Harriett's finances if she becomes incapacitated.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be included as an asset in the preparation of a personal balance sheet?

Accepted Answer

A)  credit-card debt
B)  home mortgage
C)  your salary from a part time job
D)  your computerE) None of the above
F) C) and D)

Question 7

From an investment viewpoint,it is a good idea to buy a large home in an area of town where homes are less expensive.

Accepted Answer

A) True 
 B)False

Question 8

Shuichi graduated from college two years ago.He has already accumulated enough money in his savings account and money market to meet basic contingencies,and now wants to begin investing a portion of each paycheck to earn a high rate of return over the long run.His best choice as a young recent graduate would be to put money into a bank savings account regularly.

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

Hernando and Margarita 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.E) All of the above
F) C) and D)

Question 11

Stan and Heidi are married and both 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.E) A) and B)
F) B) and D)

Question 12

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 13

The average lifetime income of someone with an undergraduate degree is about $1.6 million higher than for someone with only a high school diplom
A.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Accepted Answer

A)  $ 200
B)  $ 500
C)  $ 750
D)  $1,000E) B) and C)
F) A) and D)

Question 15

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Accepted Answer

A) True 
 B)False

Question 16

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Accepted Answer

A)  Term
B)  Health
C)  Renters
D)  Homeowner'sE) A) and B)
F) B) and D)

Question 17

Though stock prices do sometimes go down,investing in the stock market has generally provided very attractive returns over the long run.

Accepted Answer

A) True 
 B)False

Question 18

On your personal balance sheet,your assets should include anything of value that you own.

Accepted Answer

A) True 
 B)False

Question 19

An) _______ 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 managerE) B) and D)
F) B) and C)

Question 20

The value of education is often exaggerated when searching for a good job.

Accepted Answer

A) True 
 B)False

Exam 25: Managing Personal Finances

Correct Answer
verified

Which of the following would be included as an asset in the preparation of a personal balance sheet?

Correct Answer
verified

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Correct Answer
verified

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Correct Answer
verified

Though stock prices do sometimes go down,investing in the stock market has generally provided very attractive returns over the long run.

Correct Answer
verified

An) _______ is a personal financial plan that allows you to take control of future spending.

Correct Answer
verified

The reason you would prepare a durable power of attorney is to make sure that someone was named to take over your finances if you become incapacitated.

Correct Answer
verified

Hernando and Margarita 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:

Correct Answer
verified

The average lifetime income of someone with an undergraduate degree is about $1.6 million higher than for someone with only a high school diplom A.

Correct Answer
verified

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 Answer
verified

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Correct Answer
verified

Most financial experts will tell you to save about 1 month of earnings for contingency purposes.

Correct Answer
verified

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

Correct Answer
verified

Mortgage interest payments and property taxes are:

Correct Answer
verified

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.

Correct Answer
verified

From an investment viewpoint,it is a good idea to buy a large home in an area of town where homes are less expensive.

Correct Answer
verified

The value of education is often exaggerated when searching for a good job.

Correct Answer
verified

Stan and Heidi are married and both 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:

Correct Answer
verified

Harriett has just made out a will.The will names her brother Harold as the executor.This means that Harold will have the authority to take over Harriett's finances if she becomes incapacitated.

Correct Answer
verified

On your personal balance sheet,your assets should include anything of value that you own.

Correct Answer
verified

Exam 25: Managing Personal Finances

Correct AnswerverifiedShow Answer

Which of the following would be included as an asset in the preparation of a personal balance sheet?

Correct AnswerverifiedShow Answer

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Correct AnswerverifiedShow Answer

Which of the following deductible levels would result in the lowest premium for automobile insurance?

Correct AnswerverifiedShow Answer

Though stock prices do sometimes go down,investing in the stock market has generally provided very attractive returns over the long run.

Correct AnswerverifiedShow Answer

An) _______ is a personal financial plan that allows you to take control of future spending.

Correct AnswerverifiedShow Answer

The reason you would prepare a durable power of attorney is to make sure that someone was named to take over your finances if you become incapacitated.

Correct AnswerverifiedShow Answer

Hernando and Margarita 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:

Correct AnswerverifiedShow Answer

The average lifetime income of someone with an undergraduate degree is about $1.6 million higher than for someone with only a high school diplom A.

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

________ insurance provides protection from the cost of medical care for illnesses and injuries.

Correct AnswerverifiedShow Answer

Most financial experts will tell you to save about 1 month of earnings for contingency purposes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Mortgage interest payments and property taxes are:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

From an investment viewpoint,it is a good idea to buy a large home in an area of town where homes are less expensive.

Correct AnswerverifiedShow Answer

The value of education is often exaggerated when searching for a good job.

Correct AnswerverifiedShow Answer

Stan and Heidi are married and both 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:

Correct AnswerverifiedShow Answer

Harriett has just made out a will.The will names her brother Harold as the executor.This means that Harold will have the authority to take over Harriett's finances if she becomes incapacitated.

Correct AnswerverifiedShow Answer

On your personal balance sheet,your assets should include anything of value that you own.

Correct AnswerverifiedShow Answer

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verified

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verified

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