Question 1

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 lessE) C) and D)
F) A) and B)

Question 2

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

Question 3

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 managerE) None of the above
F) All of the above

Question 4

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

Question 5

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.E) A) and D)
F) A) and C)

Question 6

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 7

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.E) None of the above
F) All of the above

Question 8

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.E) B) and D)
F) All of the above

Question 9

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 10

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 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

What are the advantages of investing in a home?

Accepted Answer

One of the better investments persons ca...

Question 16

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 17

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.E) B) and C)
F) A) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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)   internationalE) A) and B)
F) B) and D)

Exam 24: Managing Personal Finances

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are the advantages of investing in a home?

Correct AnswerverifiedOne of the better investments persons ca...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A financial planner would encourage you to borrow money

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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One of the better investments persons ca...
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