Question 1

Monica expects to be in a much higher tax bracket when she retires than she is now, so she wants to invest in a retirement account in which her withdrawals will be tax-free. One way for her to achieve this is through a traditional IRA.

Accepted Answer

A) True 
 B)False

Question 2

How does term insurance differ from whole life insurance? Describe the newer types of life insurance that have been offered in recent years.

Accepted Answer

Term life insurance offers pure insuranc...

Question 3

Preparing and living with a personal budget is:

Accepted Answer

A)   not necessary if your have sufficient income.
B)   similar to activities needed to handle the finances of a small business.
C)   often more trouble than the benefits justify.
D)   an excellent technique to prepare for a career in accounting.E) All of the above
F) A) and B)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Joseph and Mack are good friends who have similar jobs that pay them well. Both have established budgets that allow them to invest several hundred dollars each month. Mack has a strategy of putting most of his money in bank CDs and a savings account. Joseph has opted for a strategy of investing in the stock market. According to the evidence of the past 50 years, it is likely that over the long run:

Accepted Answer

A)   Mack and Joseph will experience very similar rates of return.
B)   Mack will experience a significantly higher return than Joseph.
C)   Joseph will experience a significantly higher return on his investments than Mack, but will also experience more ups and downs over the years.
D)   Mack will experience a slightly higher return, but Joseph's return will be more stable and predictable.E) B) and C)
F) None of the above

Question 6

James is in the 30% tax bracket. What is the after-tax cost of a $3,000 contribution to his traditional IRA account?

Accepted Answer

A)   $900
B)   $1,440
C)   $2,100
D)   zeroE) None of the above
F) A) and D)

Question 7

The number of workers paying into Social Security for each retiree receiving Social Security benefits is:

Accepted Answer

A)   fixed by law.
B)   increasing.
C)   decreasing.
D)   not fixed by law, but has remained relatively constant for several decades.E) B) and C)
F) A) and D)

Question 8

A traditional IRA affords workers who qualify the opportunity to deduct from their reported income the money they put into a qualified retirement account.

Accepted Answer

A) True 
 B)False

Question 9

Recent demographic trends suggest that the financial condition of the Social Security program soon will begin to improve.

Accepted Answer

A) True 
 B)False

Question 10

If possible, it is almost always better to buy a single home rather than a duplex.

Accepted Answer

A) True 
 B)False

Question 11

A comparison of variable life insurance to a standard whole life plan would reveal that:

Accepted Answer

A)   they are essentially identical.
B)   variable life offers only pure insurance but does so at a very low cost, while a standard whole life plan costs more but offers both insurance and a savings plan.
C)   both a standard whole life and variable life insurance offer both life insurance and savings, but variable life invests the savings more aggressively than whole life.
D)   variable life is only available to people who want at least $1 million in coverage-and are willing to pay for it.E) All of the above
F) B) and D)

Question 12

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) B) and C)
F) B) and D)

Question 13

A(n)  __________ is the person named in a will to assemble and value the assets of the deceased, handle tax matters, and distribute the assets.

Accepted Answer

A)   executor
B)   guardian
C)   arbiter
D)   intermediatorE) A) and B)
F) None of the above

Question 14

A Roth IRA offers employees an incentive to save for their retirement by:

Accepted Answer

A)   deferring taxes on income contributed to the IRA.
B)   eliminating taxes on the withdrawals from the IRA.
C)   eliminating taxes on the income contributed to the IRA.
D)   allowing employers to match the employee's contribution to the IRA.E) A) and B)
F) C) and D)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Hannah is excited about getting her first credit card. However, she should be aware of the fact that:

Accepted Answer

A)   credit cards are no longer accepted in many places as a valid source of credit.
B)   credit cards require that at least 25% of the balance be paid each month.
C)   there will be a finance charge even if Hannah pays her entire credit card balance in full and on time.
D)   the convenience of credit cards can lead to excessive debts.E) A) and B)
F) A) and C)

Question 17

The person who is named in your will to assemble the assets in your estate, handle taxes, and distribute the assets is called your proxy.

Accepted Answer

A) True 
 B)False

Question 18

IRA funds are not available for withdrawal until you are 59 ½ years old.

Accepted Answer

A) True 
 B)False

Question 19

Real estate taxes and mortgage interest payments are both:

Accepted Answer

A)   expenses of home ownership on which the government levies a tax.
B)   tax deductible for renters.
C)   tax deductible for homeowners.
D)   taxable income for renters and homeowners.E) All of the above
F) C) and D)

Exam 25: Extension: Managing Personal Finances

A traditional IRA affords workers who qualify the opportunity to deduct from their reported income the money they put into a qualified retirement account.

Correct Answer
verified

Correct Answer
verified

Real estate taxes and mortgage interest payments are both:

Correct Answer
verified

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

Correct Answer
verified

Recent demographic trends suggest that the financial condition of the Social Security program soon will begin to improve.

Correct Answer
verified

Preparing and living with a personal budget is:

Correct Answer
verified

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

Correct Answer
verified

The number of workers paying into Social Security for each retiree receiving Social Security benefits is:

Correct Answer
verified

The person who is named in your will to assemble the assets in your estate, handle taxes, and distribute the assets is called your proxy.

Correct Answer
verified

Monica expects to be in a much higher tax bracket when she retires than she is now, so she wants to invest in a retirement account in which her withdrawals will be tax-free. One way for her to achieve this is through a traditional IRA.

Correct Answer
verified

How does term insurance differ from whole life insurance? Describe the newer types of life insurance that have been offered in recent years.

Correct Answer
verified
Term life insurance offers pure insuranc...
View Answer

A(n) __________ is the person named in a will to assemble and value the assets of the deceased, handle tax matters, and distribute the assets.

Correct Answer
verified

James is in the 30% tax bracket. What is the after-tax cost of a $3,000 contribution to his traditional IRA account?

Correct Answer
verified

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

Correct Answer
verified

A comparison of variable life insurance to a standard whole life plan would reveal that:

Correct Answer
verified

IRA funds are not available for withdrawal until you are 59 ½ years old.

Correct Answer
verified

If possible, it is almost always better to buy a single home rather than a duplex.

Correct Answer
verified

Hannah is excited about getting her first credit card. However, she should be aware of the fact that:

Correct Answer
verified

A Roth IRA offers employees an incentive to save for their retirement by:

Correct Answer
verified

Exam 25: Extension: Managing Personal Finances

A traditional IRA affords workers who qualify the opportunity to deduct from their reported income the money they put into a qualified retirement account.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Real estate taxes and mortgage interest payments are both:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Recent demographic trends suggest that the financial condition of the Social Security program soon will begin to improve.

Correct AnswerverifiedShow Answer

Preparing and living with a personal budget is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The number of workers paying into Social Security for each retiree receiving Social Security benefits is:

Correct AnswerverifiedShow Answer

The person who is named in your will to assemble the assets in your estate, handle taxes, and distribute the assets is called your proxy.

Correct AnswerverifiedShow Answer

Monica expects to be in a much higher tax bracket when she retires than she is now, so she wants to invest in a retirement account in which her withdrawals will be tax-free. One way for her to achieve this is through a traditional IRA.

Correct AnswerverifiedShow Answer

How does term insurance differ from whole life insurance? Describe the newer types of life insurance that have been offered in recent years.

Correct AnswerverifiedTerm life insurance offers pure insuranc...View AnswerShow Answer

A(n) __________ is the person named in a will to assemble and value the assets of the deceased, handle tax matters, and distribute the assets.

Correct AnswerverifiedShow Answer

James is in the 30% tax bracket. What is the after-tax cost of a $3,000 contribution to his traditional IRA account?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A comparison of variable life insurance to a standard whole life plan would reveal that:

Correct AnswerverifiedShow Answer

IRA funds are not available for withdrawal until you are 59 ½ years old.

Correct AnswerverifiedShow Answer

If possible, it is almost always better to buy a single home rather than a duplex.

Correct AnswerverifiedShow Answer

Hannah is excited about getting her first credit card. However, she should be aware of the fact that:

Correct AnswerverifiedShow Answer

A Roth IRA offers employees an incentive to save for their retirement by:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Term life insurance offers pure insuranc...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified