Question 1

Though stock prices do sometimes go down,investing in the stock market has generally provided very attractive returns over the long run.

Accepted Answer

A) True 
 B)False

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

Question 3

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) C) and D)
F) A) and D)

Question 4

When purchasing with a credit card,it's important to remember that ________ if you do not pay the balance in full within a stated time period.

Accepted Answer

A)  the credit limit is reduced
B)  no returns are allowed
C)  interest is charged on the remaining balance
D)  discounts are availableE) A) and B)
F) B) and C)

Question 5

In preparing an income statement for yourself,the wages from your job would be shown as:

Accepted Answer

A)  your revenue.
B)  an expense.
C)  an asset.
D)  your owner's equity.E) All of the above
F) C) and D)

Question 6

Carrie is trying to find a way to reduce her car insurance premium.She would be well advised to decrease her insurance policy's deductible.

Accepted Answer

A) True 
 B)False  False

Question 7

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 8

________ insurance provides protection from losses of furniture,appliances,and clothes.

Accepted Answer

A)  Term
B)  Health
C)  Disability
D)  Homeowner'sE) None of the above
F) A) and C) D

Question 9

A common purpose of a rider added to a homeowner's policy is to:

Accepted Answer

A)  provide coverage for items that the standard policy does not cover.
B)  limit the insurance company's liability for certain types of losses.
C)  waive the provision that requires the owners to get a health exam.
D)  allow the policy holder to obtain health,disability,and auto insurance under their homeowner's plan.E) B) and D)
F) B) and C)

Question 10

Hernando and Margarita have decided to take out an umbrella policy from an insurance company.The main reason they would probably want to do this would be to:

Accepted Answer

A)  protect against major disasters,which are known as "rainy days."
B)  ensure that any children they have will be guaranteed the right to buy insurance at some future date.
C)  save money by having one company provide a variety of different types of coverage.
D)  take out one life insurance policy that covers both of them.E) All of the above
F) B) and D) C

Question 11

More than half of all debtors seeking help at the National Consumer Counseling Service were between the ages of 18 and 32.

Accepted Answer

A) True 
 B)False

Question 12

One of the keys to financial success is never to apply for a credit card.

Accepted Answer

A) True 
 B)False

Question 13

Once you have set up a budget and handled your ordinary expenses,the first thing to do with any extra money you have is to:

Accepted Answer

A)  start a savings plan.
B)  pay off your debts.
C)  start your own business.
D)  spend it on the things you would like but that aren't included in your budget.E) B) and C)
F) B) and D)

Question 14

Historically,the best place to invest has been in U.S.government savings bonds.

Accepted Answer

A) True 
 B)False

Question 15

The average lifetime income of someone with an undergraduate degree is about $1.6 million higher than for someone with only a high school diploma.

Accepted Answer

A) True 
 B)False

Question 16

On your personal balance sheet,your assets should include anything of value that you own.

Accepted Answer

A) True 
 B)False

Question 17

With respect to personal financial planning,the first thing to do with any extra money you have is to start a savings plan.

Accepted Answer

A) True 
 B)False

Question 18

If you are in the 25 percent tax bracket and your home mortgage interest is $1000 per month,then your after-tax mortgage interest cost is $750 per month.

Accepted Answer

A) True 
 B)False

Question 19

Your personal balance sheet will reflect the same fundamental accounting equation as the balance sheet for a business: assets = liabilities + owners' equity.

Accepted Answer

A) True 
 B)False

Question 20

Personal financial planners recommend renting a home,rather than incurring the cost of buying a home.

Accepted Answer

A) True 
 B)False

Exam 23: Bonus C: Managing Your Personal Finances

Though stock prices do sometimes go down,investing in the stock market has generally provided very attractive returns over the long run.

Correct AnswerverifiedShow Answer

The path to success in a capitalist system is to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When purchasing with a credit card,it's important to remember that ________ if you do not pay the balance in full within a stated time period.

Correct AnswerverifiedShow Answer

In preparing an income statement for yourself,the wages from your job would be shown as:

Correct AnswerverifiedShow Answer

Carrie is trying to find a way to reduce her car insurance premium.She would be well advised to decrease her insurance policy's deductible.

Correct AnswerverifiedFalse

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

________ insurance provides protection from losses of furniture,appliances,and clothes.

Correct AnswerverifiedD

A common purpose of a rider added to a homeowner's policy is to:

Correct AnswerverifiedShow Answer

Hernando and Margarita have decided to take out an umbrella policy from an insurance company.The main reason they would probably want to do this would be to:

Correct AnswerverifiedC

More than half of all debtors seeking help at the National Consumer Counseling Service were between the ages of 18 and 32.

Correct AnswerverifiedShow Answer

One of the keys to financial success is never to apply for a credit card.

Correct AnswerverifiedShow Answer

Once you have set up a budget and handled your ordinary expenses,the first thing to do with any extra money you have is to:

Correct AnswerverifiedShow Answer

Historically,the best place to invest has been in U.S.government savings bonds.

Correct AnswerverifiedShow Answer

The average lifetime income of someone with an undergraduate degree is about $1.6 million higher than for someone with only a high school diploma.

Correct AnswerverifiedShow Answer

On your personal balance sheet,your assets should include anything of value that you own.

Correct AnswerverifiedShow Answer

With respect to personal financial planning,the first thing to do with any extra money you have is to start a savings plan.

Correct AnswerverifiedShow Answer

If you are in the 25 percent tax bracket and your home mortgage interest is $1000 per month,then your after-tax mortgage interest cost is $750 per month.

Correct AnswerverifiedShow Answer

Your personal balance sheet will reflect the same fundamental accounting equation as the balance sheet for a business: assets = liabilities + owners' equity.

Correct AnswerverifiedShow Answer

Personal financial planners recommend renting a home,rather than incurring the cost of buying a home.

Correct AnswerverifiedShow Answer

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False

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D

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C

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