Question 1

Which of the following is a form of whole life insurance that provides a death benefit that varies with the performance of the investments of the insurance company?

Accepted Answer

A)  flexible whole life insurance
B)  variable life insurance
C)  adjustable benefit insurance
D)  multiyear level-premium insuranceE) B) and C)
F) C) and D)

Question 2

One danger of a credit card is that consumers often buy items they wouldn't normally buy if they had to pay cash.

Accepted Answer

A) True 
 B)False

Question 3

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Accepted Answer

A) True 
 B)False

Question 4

The death benefits of a variable life insurance policy vary depending upon the performance of the investment.

Accepted Answer

A) True 
 B)False

Question 5

For someone with a family that includes young children,the first step in estate planning should be to:

Accepted Answer

A)  establish a will.
B)  set up a trust fund for each child.
C)  select a guardian for the children.
D)  give each child his or her own savings account.E) All of the above
F) A) and D)

Question 6

Bob has decided to contribute $2,800 to a Roth IR A.He is currently in the 25% tax bracket.How will his contribution affect his income tax for the current year?

Accepted Answer

A)  It will reduce the amount of taxes he owes in the current tax year by $700.
B)  It will increase the amount of taxes he owes in the current year by $700.
C)  It will reduce the amount of taxes he owes in the current year by $2,100.
D)  It will have no effect on the amount of taxes he owes this year.E) A) and C)
F) All of the above

Question 7

Credit-card debt represents an asset on a consumer's balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The best financial planners are actually insurance salespeople.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Throughout history an investment in ________ has yielded an excellent return,regardless of the state of the economy or political changes.

Accepted Answer

A)  antiques
B)  a good education
C)  government bonds
D)  savings accountsE) All of the above
F) B) and C)

Question 12

Once they've accumulated enough money,buying a low-priced home is often a good investment for young adults.

Accepted Answer

A) True 
 B)False

Question 13

Over the long-run,investing in __________ has proven to be a good strategy for obtaining a high rate of return.

Accepted Answer

A)  U.S.government bonds
B)  certificates of deposits
C)  corporate bonds
D)  stocksE) A) and C)
F) B) and D)

Question 14

Ricardo desires to reduce his current taxable income and save for retirement.He should consider a traditional IR
A.

Accepted Answer

A) True 
 B)False

Question 15

Fixed annuities have become much more popular than variable annuities.

Accepted Answer

A) True 
 B)False

Question 16

A traditional IRA allows 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 17

In order to get in the habit of saving,personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash,savings accounts,CDs and other liquid assets.

Accepted Answer

A) True 
 B)False

Question 18

Withdrawals from a traditional IRA prior to the age of 59½ are:

Accepted Answer

A)  tax deferred until you reach 65 years of age.
B)  tax-free.
C)  normally subject to a penalty and taxes on the income that is withdrawn from the IRA.
D)  subject to a possible denial after review by the Internal Revenue Service.E) None of the above
F) A) and B)

Question 19

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

Question 20

A _______ is a document that names a guardian for your children,states how you want your assets distributed,and names an executor to handle your estate when you die.

Accepted Answer

A)  trust arrangement
B)  durable power of attorney
C)  proxy sheet
D)  willE) A) and C)
F) None of the above

Exam 25: Managing Personal Finances

One danger of a credit card is that consumers often buy items they wouldn't normally buy if they had to pay cash.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Ricardo desires to reduce his current taxable income and save for retirement.He should consider a traditional IR A.

Correct AnswerverifiedShow Answer

Once they've accumulated enough money,buying a low-priced home is often a good investment for young adults.

Correct AnswerverifiedShow Answer

Which of the following is a form of whole life insurance that provides a death benefit that varies with the performance of the investments of the insurance company?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The best financial planners are actually insurance salespeople.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Credit-card debt represents an asset on a consumer's balance sheet.

Correct AnswerverifiedShow Answer

For someone with a family that includes young children,the first step in estate planning should be to:

Correct AnswerverifiedShow Answer

Withdrawals from a traditional IRA prior to the age of 59½ are:

Correct AnswerverifiedShow Answer

In order to get in the habit of saving,personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash,savings accounts,CDs and other liquid assets.

Correct AnswerverifiedShow Answer

A _______ is a document that names a guardian for your children,states how you want your assets distributed,and names an executor to handle your estate when you die.

Correct AnswerverifiedShow Answer

Over the long-run,investing in __________ has proven to be a good strategy for obtaining a high rate of return.

Correct AnswerverifiedShow Answer

The death benefits of a variable life insurance policy vary depending upon the performance of the investment.

Correct AnswerverifiedShow Answer

Fixed annuities have become much more popular than variable annuities.

Correct AnswerverifiedShow Answer

Bob has decided to contribute $2,800 to a Roth IR A.He is currently in the 25% tax bracket.How will his contribution affect his income tax for the current year?

Correct AnswerverifiedShow Answer

The number of workers paying into Social Security per retired individual receiving benefits is decreasing.

Correct AnswerverifiedShow Answer

Throughout history an investment in ________ has yielded an excellent return,regardless of the state of the economy or political changes.

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

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