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Exam 23: Bonus C: Managing Your Personal Finances

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Question 101

True/False

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

A) True
B) False

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Question 102

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Roberto has just opened a 401(k)retirement plan.The money he invests in this plan will reduce Roberto's present taxable income.

A) True
B) False

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Question 103

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Compare the basic features of the traditional IRA and Roth IRA.

Ima Safer,who recently graduated from college and got a full time job,has prepared her first personal budget and found a pleasant surprise.After taking into account her expected monthly income and all of her ordinary expenses,including the monthly payment on her credit card,she should have some money left over.If Ima is like most young people who are just starting out,the best thing for her to do with the extra money would be to:

Financial planning begins with:

Buying a _______ 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.

Mortgage interest payments and property taxes are:

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.

The three factors 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.

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

Joseph and Mack are good friends who have similar jobs that pay them well.Both have established budgets that allow them to invest several hundred dollars each month.Mack has a strategy of putting most of his money in bank CDs and a savings account.Joseph has opted for a strategy of investing in the stock market.According to the evidence of the past 50 years,it is likely that over the long-run:

The goal of accumulating capital is to allow an individual to:

The key to generating enough capital for investment for many individuals is to:

According to contrarians,the big decline in the stock market during the early 2000s was:

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

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.

Shuichi graduated from college two years ago.He has already accumulated enough money in his savings account and money market to meet basic contingencies,and now wants to begin investing a portion of each paycheck to earn a high rate of return over the long run.His best choice as a young recent graduate would be to put money into a bank savings account regularly.

If you find yourself regularly running out of cash,your only real option is to focus your attention on finding ways to increase your income.

The new simple IRA plans allow employees of ________ companies to contribute larger amounts than the traditional IRA.

Your big screen HDTV would be listed as an asset on your personal balance sheet.However,the loan you took out to buy the TV would be listed as a personal liability.