Question 1

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) None of the above
F) A) and B)

Question 2

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 3

A homeowner's insurance policy that includes a provision for __________ would provide the homeowner with enough cash to replace the items lost.

Accepted Answer

A)  actual book value protection
B)  cash in lieu of coverage
C)  guaranteed replacement cost
D)  full collateral damage protectionE) A) and B)
F) None of the above

Question 4

If you are relatively healthy,there is no real reason to buy health insurance.

Accepted Answer

A) True 
 B)False

Question 5

The younger you are when you buy term life insurance,the lower the premiums tend to be.

Accepted Answer

A) True 
 B)False

Question 6

Earnings of Keogh plans are not taxed until the funds are withdrawn from the retirement account.

Accepted Answer

A) True 
 B)False

Question 7

Borrowing money for ordinary expenses is a necessary part of life.

Accepted Answer

A) True 
 B)False

Question 8

Due to the high cost of the insurance premiums,many people have found that it makes financial sense to carry medical insurance only if their employer provides it.

Accepted Answer

A) True 
 B)False

Question 9

The earnings of a traditional individual retirement account (IRA) are:

Accepted Answer

A)  taxed at the time they are earned.
B)  not taxed.
C)  taxed when the funds are withdrawn.
D)  subject to the double taxation of all dividends.E) C) and D)
F) All of the above

Question 10

The chances of becoming disabled at an early age are much higher than your chances of dying from an accident.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The U.S.government provides several types of financial incentives to encourage people to attend college.

Accepted Answer

A) True 
 B)False

Question 13

Approximately what percent of the population is successful in saving enough money for retirement to live comfortably?

Accepted Answer

A)  10 %
B)  25 %
C)  50 %
D)  80 %E) C) and D)
F) B) and D)

Question 14

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 C)
F) B) and D)

Question 15

Which of the following is true of credit cards?

Accepted Answer

A)  They are a cheaper way to finance your education.
B)  They are an efficient way to keep track of purchases.
C)  They are an effective way of controlling the amount of debt the consumer incurs.
D)  They are less convenient than carrying cash or writing a check.E) A) and B)
F) A) and C)

Question 16

On average,a person with a college education earns _________ over the course of his or her career.

Accepted Answer

A)  about $300,000 more than a high school graduate
B)  barely enough to justify the additional cost of going to college
C)  more in dividends and interest income than in salaries
D)  about $1.6 million more than a high school graduateE) A) and D)
F) B) and D)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The earnings on a traditional IRA are:

Accepted Answer

A)  never taxed,in order to encourage people to invest for their retirement.
B)  tax free until the Social Security system is improved.
C)  taxed as income when they are withdrawn after retirement.
D)  available to the investor without a penalty.E) A) and B)
F) C) and D)

Question 19

Financial planners encourage individuals to borrow only to cover immediate expenses.

Accepted Answer

A) True 
 B)False

Question 20

One disadvantage of term life insurance is that:

Accepted Answer

A)  when renewed it usually is at a higher premium.
B)  the risk of lost income from the death of the insured is shifted to the insurance company.
C)  it is pure insurance protection for a given time period.
D)  it is generally not available to young people.E) B) and D)
F) A) and C)

Exam 23: Bonus C: Managing Your Personal Finances

The younger you are when you buy term life insurance,the lower the premiums tend to be.

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

The U.S.government provides several types of financial incentives to encourage people to attend college.

Correct AnswerverifiedShow Answer

On average,a person with a college education earns _________ over the course of his or her career.

Correct AnswerverifiedShow Answer

Approximately what percent of the population is successful in saving enough money for retirement to live comfortably?

Correct AnswerverifiedShow Answer

Earnings of Keogh plans are not taxed until the funds are withdrawn from the retirement account.

Correct AnswerverifiedShow Answer

Real estate taxes and mortgage interest payments are both:

Correct AnswerverifiedShow Answer

Borrowing money for ordinary expenses is a necessary part of life.

Correct AnswerverifiedShow Answer

One disadvantage of term life insurance is that:

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

If you are relatively healthy,there is no real reason to buy health insurance.

Correct AnswerverifiedShow Answer

The earnings of a traditional individual retirement account (IRA) are:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The chances of becoming disabled at an early age are much higher than your chances of dying from an accident.

Correct AnswerverifiedShow Answer

Which of the following is true of credit cards?

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

Financial planners encourage individuals to borrow only to cover immediate expenses.

Correct AnswerverifiedShow Answer

A homeowner's insurance policy that includes a provision for __________ would provide the homeowner with enough cash to replace the items lost.

Correct AnswerverifiedShow Answer

The earnings on a traditional IRA are:

Correct AnswerverifiedShow Answer

Due to the high cost of the insurance premiums,many people have found that it makes financial sense to carry medical insurance only if their employer provides it.

Correct AnswerverifiedShow Answer

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