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Exam 24: Managing Personal Finances

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Question 101

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Carlton owns a small sports memorabilia shop. He can participate in a Keogh plan to save for his retirement.

A) True
B) False

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Question 102

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Term life insurance offers pure insurance with no savings feature.

A) True
B) False

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Question 103

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House payments tend to rise at a faster rate than do rent payments on a similar sized house.

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

An annuity is a contract to make regular payments to a person for life or for a fixed period.

About ________ of all U.S. households own stock in corporations.

Mike is young and newly married. He and his wife plan to have children in the near future, and Mike wants to get a significant amount of life insurance coverage at as low a cost as possible. He would be well advised to purchase a term insurance policy.

If you use a credit card to make purchases, you should make a strong effort to pay off the balance in full each month.

The three keys that have the greatest influence on how the value of your home increases over time are: (1) size (square feet), (2) age, and (3) design features.

The goal of accumulating capital is to allow an individual to

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.

Nancy has been following the stock market, and has noticed that it has been declining for the last several weeks. While many of her friends and family have sold stock, Nancy looks at this situation as a good opportunity to buy. Nancy's views are consistent with the ________ approach to investing in the stock market.

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

Thomas contributed $2,800 to a Roth IRA. He is currently in the 25% tax bracket. How will his contribution affect his income tax for the current year?

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

In order to accumulate enough wealth to get started toward achieving their goals, many people have to make significant sacrifices in their standard of living for several years.

Your computer and car should both be listed on the asset side of your personal balance sheet.

In the future, the Social Security system is likely to

Managing the finances of a household is similar to managing the finances of a small business.

Denny plans to start his business program this semester at a local university. Denny will likely find that