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Exam 24: Appendix: Managing Personal Finances

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Question 121

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A person in the 25 percent tax bracket who invests $1,000 in a traditional IRA immediately postpones $250 in taxes.

A) True
B) False

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Question 122

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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.

A) True
B) False

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Question 123

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The only way to accumulate enough money to do all of the things you want to do late in life is to

The best way to save money is to

A(n) ________ can be added to a homeowner's insurance policy that provides for coverage at a reasonable cost for items that the policy otherwise would not cover.

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

The federal government discourages home ownership through high tax rates.

For workers who qualify, the earnings from income invested in a traditional IRA are

Ryan is in need of advice regarding investments, taxes, and insurance for himself and his family. He would be well advised to seek the advice of an insurance salesperson.

Trends in the number of workers contributing to the Social Security system and the number of workers drawing benefits from the system suggest that future generations will

Many insurance providers offer ________ policies that give a discount to families who buy several types of insurance coverage from them.

Luke wants to get better control of his personal finances. He should begin by setting up a personal balance sheet and a personal income statement.

Accumulating money through savings allows you to participate in the growth of a capitalist society.

Before getting married, a couple should discuss and agree upon a financial strategy.

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

Purchasing ________ insurance is a relatively low cost way of protecting yourself from lost income due to an accident or prolonged illness.

Regardless of potential changes, you can count on Social Security to provide you with a comfortable retirement.

As their situation began to improve, the financial adviser began discussing investment strategies with Penny and Ira. He suggested that they might want to invest in the stock market. He surprised them by saying that they should try to buy stocks during a major downturn in the market-just when most people were trying to sell. This statement suggests that the financial advisor agreed with the

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

The benefit of opening an IRA while you're young is the compounding of the money invested tax-free over your working lifetime.