Question 1

Buying ________ is often an attractive strategy for young couples, since they can live in one unit and rent the other half to supplement their income, while taking tax deductions on interest and real estate taxes.

Accepted Answer

A)   a semiprivate housing unit
B)   a ranch apartment
C)   a biplex
D)   attached homesE) A) and B)
F) B) and C)

Question 2

The path to success in a capitalist system is to

Accepted Answer

A)   spend more on capital goods than you do on consumer goods.
B)   have access to debt markets.
C)   have money to invest.
D)   work hard with the goal of moving up in the management of your employer.E) A) and B)
F) All of the above C

Question 3

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

Accepted Answer

A)   take an inventory of your financial assets.
B)   make more than you spend.
C)   avoid bankruptcy.
D)   satisfy the demands of your creditors.E) C) and D)
F) A) and B)

Question 4

A person using a credit card to make a purchase may end up paying much more than if he or she had paid cash.

Accepted Answer

A) True 
 B)False

Question 5

Employees of small businesses can contribute to a Keogh plan.

Accepted Answer

A) True 
 B)False

Question 6

A simple IRA, which allows workers to contribute larger amounts than a regular IRA, is available to employees who work for firms with fewer than 100 employees.

Accepted Answer

A) True 
 B)False

Question 7

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Accepted Answer

A) True 
 B)False  False

Question 8

Buying an attached home and living in one side, while renting the other side, generally turns out to be more trouble than it is worth, since you have to satisfy not only your own needs, but also the needs of the renters.

Accepted Answer

A) True 
 B)False

Question 9

When young people decide to buy a house, the best approach is to buy a house in an inexpensive part of town so they can get a larger house for less money.

Accepted Answer

A) True 
 B)False

Question 10

Listing all of your personal assets is the first step in preparing your own income statement.

Accepted Answer

A) True 
 B)False

Question 11

Employers often match part of the contribution of their employees into a 401(k) retirement plan.

Accepted Answer

A) True 
 B)False

Question 12

Financial planning begins with

Accepted Answer

A)   spending money wisely.
B)   earning money.
C)   insuring your assets against an unexpected loss.
D)   saving money.E) A) and B)
F) A) and C)

Question 13

It is likely that young adults today will benefit from the recent trend in the Social Security system to increase benefits and expand the cost-of-living adjustments.

Accepted Answer

A) True 
 B)False

Question 14

IRA funds are not available for withdrawal until you are 59½ years old.

Accepted Answer

A) True 
 B)False

Question 15

Most financial experts will tell you to save about one month's earnings for contingency purposes.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)   not taxed until the funds are withdrawn.
B)   never taxed.
C)   taxed at the time they are earned, but at the lowest individual rate.
D)   taxed both at the time the money is earned and at the time the earnings are withdrawn.E) B) and C)
F) A) and C)

Question 17

The total cost of purchasing a sound system or HDTV with cash is ________ the cost when using credit cards to finance the same assets.

Accepted Answer

A)   the same as
B)   greater than
C)   less than
D)   less stable thanE) C) and D)
F) A) and B)

Question 18

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

Accepted Answer

A) True 
 B)False  False

Question 19

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Accepted Answer

A) True 
 B)False

Question 20

The increase in the number of retirement plans approved by the federal government likely indicates that

Accepted Answer

A)   the government budget is approaching a surplus.
B)   most people have faith in the troubled Social Security system.
C)   Social Security cannot be counted on to provide an individual with ample funds for retirement.
D)   as a nation our values have shifted so that we now enjoy the value of saving more and consuming less.E) None of the above
F) All of the above

Exam 24: Managing Personal Finances

Buying ________ is often an attractive strategy for young couples, since they can live in one unit and rent the other half to supplement their income, while taking tax deductions on interest and real estate taxes.

Correct AnswerverifiedShow Answer

The path to success in a capitalist system is to

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

A person using a credit card to make a purchase may end up paying much more than if he or she had paid cash.

Correct AnswerverifiedShow Answer

Employees of small businesses can contribute to a Keogh plan.

Correct AnswerverifiedShow Answer

A simple IRA, which allows workers to contribute larger amounts than a regular IRA, is available to employees who work for firms with fewer than 100 employees.

Correct AnswerverifiedShow Answer

The best strategy to follow in using credit cards is to pay only the minimum amount required each month.

Correct AnswerverifiedFalse

Buying an attached home and living in one side, while renting the other side, generally turns out to be more trouble than it is worth, since you have to satisfy not only your own needs, but also the needs of the renters.

Correct AnswerverifiedShow Answer

When young people decide to buy a house, the best approach is to buy a house in an inexpensive part of town so they can get a larger house for less money.

Correct AnswerverifiedShow Answer

Listing all of your personal assets is the first step in preparing your own income statement.

Correct AnswerverifiedShow Answer

Employers often match part of the contribution of their employees into a 401(k) retirement plan.

Correct AnswerverifiedShow Answer

Financial planning begins with

Correct AnswerverifiedShow Answer

It is likely that young adults today will benefit from the recent trend in the Social Security system to increase benefits and expand the cost-of-living adjustments.

Correct AnswerverifiedShow Answer

IRA funds are not available for withdrawal until you are 59½ years old.

Correct AnswerverifiedShow Answer

Most financial experts will tell you to save about one month's earnings for contingency purposes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The total cost of purchasing a sound system or HDTV with cash is ________ the cost when using credit cards to finance the same assets.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedFalse

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Correct AnswerverifiedShow Answer

The increase in the number of retirement plans approved by the federal government likely indicates that

Correct AnswerverifiedShow Answer

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False

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False

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