Question 1

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) A) and C)

Question 2

Guaranteed replacement cost insurance coverage provides the insured with the depreciated cost of assets.

Accepted Answer

A) True 
 B)False

Question 3

Recent college graduates, Jason and Elizabeth, are newlyweds. Although they acquired a significant amount of debt during college, both recently got good-paying jobs and appear to have promising careers. Given their situation, down the road Jason and Elizabeth

Accepted Answer

A)   are almost certain to be able to retire comfortably when the time comes, given the high level of income they are likely to earn.
B)   could be able to retire comfortably, but doing so will take planning and discipline on their part.
C)   have little chance of enjoying a comfortable retirement because the college debts will take years to repay and become a major burden.
D)   will probably find that Social Security will provide an adequate retirement, but that they may need to supplement this with a modest pension if they really want to enjoy the fine life in their golden years.E) B) and C)
F) All of the above

Question 4

Most homeowner's insurance policies do not cover certain types of expensive items unless you purchase a rider for the additional coverage.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the best advice about the use of credit cards?

Accepted Answer

A)   Except for very small purchases, credit cards should always be used instead of cash.
B)   The best approach to credit cards is never even to apply for one.
C)   Credit cards are an important part of a personal financial system, but pay the balance in full during the period when no interest is charged.
D)   Credit cards are most useful when making large purchases (over $500) , because they allow you to spread out the payments to fit into your budget.E) B) and C)
F) A) and B)

Question 6

The best way to save money is to

Accepted Answer

A)   pay yourself first by taking out money for savings from each paycheck before deciding what to do with the remaining money.
B)   start your own business designed to create business tax deductions.
C)   prepare a balance sheet.
D)   pay yourself last.E) A) and B)
F) A) and C)

Question 7

For individuals, budgets are usually more trouble than they are worth.

Accepted Answer

A) True 
 B)False

Question 8

Dylan and Wyatt 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. Dylan has a strategy of putting most of his money in bank CDs and a savings account. Wyatt 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

Accepted Answer

A)   Dylan and Wyatt will experience very similar rates of return.
B)   Dylan will experience a significantly higher return than Wyatt.
C)   Wyatt will experience a significantly higher return on his investments than Dylan, but will also experience more ups and downs over the years.
D)   Dylan will experience a slightly higher return, but Wyatt's return will be more stable and predictable.E) B) and D)
F) C) and D)

Question 9

Even though they are in debt, most of today's college graduates are capital-rich.

Accepted Answer

A) True 
 B)False

Question 10

If you have minor children, the first step in estate planning is to select their guardian.

Accepted Answer

A) True 
 B)False

Question 11

Joe wants life insurance to provide benefits for his family if he were to die. He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age. His best strategy to achieve insurance and savings with one premium is term insurance.

Accepted Answer

A) True 
 B)False

Question 12

An individual retirement account (IRA) is a tax-deferred investment plan designed to encourage workers to save for retirement.

Accepted Answer

A) True 
 B)False

Question 13

Variable annuities offer investment choices identical to mutual funds.

Accepted Answer

A) True 
 B)False

Question 14

Purchasing ________ insurance is a relatively low cost way of protecting yourself from lost income due to an accident or prolonged illness.

Accepted Answer

A)   flexible term
B)   health
C)   contingent annuity
D)   disabilityE) A) and B)
F) A) and C)

Question 15

About half of the U.S. population accumulates enough money to afford a comfortable retirement.

Accepted Answer

A) True 
 B)False

Exam 24: Managing Personal Finances

The best way to save money is to

Correct Answer
verified

Purchasing ________ insurance is a relatively low cost way of protecting yourself from lost income due to an accident or prolonged illness.

Correct Answer
verified

Most homeowner's insurance policies do not cover certain types of expensive items unless you purchase a rider for the additional coverage.

Correct Answer
verified

Even though they are in debt, most of today's college graduates are capital-rich.

Correct Answer
verified

Guaranteed replacement cost insurance coverage provides the insured with the depreciated cost of assets.

Correct Answer
verified

Which of the following is the best advice about the use of credit cards?

Correct Answer
verified

If you have minor children, the first step in estate planning is to select their guardian.

Correct Answer
verified

Joe wants life insurance to provide benefits for his family if he were to die. He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age. His best strategy to achieve insurance and savings with one premium is term insurance.

Correct Answer
verified

About half of the U.S. population accumulates enough money to afford a comfortable retirement.

Correct Answer
verified

Correct Answer
verified

Recent college graduates, Jason and Elizabeth, are newlyweds. Although they acquired a significant amount of debt during college, both recently got good-paying jobs and appear to have promising careers. Given their situation, down the road Jason and Elizabeth

Correct Answer
verified

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 Answer
verified

Variable annuities offer investment choices identical to mutual funds.

Correct Answer
verified

For individuals, budgets are usually more trouble than they are worth.

Correct Answer
verified

An individual retirement account (IRA) is a tax-deferred investment plan designed to encourage workers to save for retirement.

Correct Answer
verified

Exam 24: Managing Personal Finances

The best way to save money is to

Correct AnswerverifiedShow Answer

Purchasing ________ insurance is a relatively low cost way of protecting yourself from lost income due to an accident or prolonged illness.

Correct AnswerverifiedShow Answer

Most homeowner's insurance policies do not cover certain types of expensive items unless you purchase a rider for the additional coverage.

Correct AnswerverifiedShow Answer

Even though they are in debt, most of today's college graduates are capital-rich.

Correct AnswerverifiedShow Answer

Guaranteed replacement cost insurance coverage provides the insured with the depreciated cost of assets.

Correct AnswerverifiedShow Answer

Which of the following is the best advice about the use of credit cards?

Correct AnswerverifiedShow Answer

If you have minor children, the first step in estate planning is to select their guardian.

Correct AnswerverifiedShow Answer

Joe wants life insurance to provide benefits for his family if he were to die. He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age. His best strategy to achieve insurance and savings with one premium is term insurance.

Correct AnswerverifiedShow Answer

About half of the U.S. population accumulates enough money to afford a comfortable retirement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Recent college graduates, Jason and Elizabeth, are newlyweds. Although they acquired a significant amount of debt during college, both recently got good-paying jobs and appear to have promising careers. Given their situation, down the road Jason and Elizabeth

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

Variable annuities offer investment choices identical to mutual funds.

Correct AnswerverifiedShow Answer

For individuals, budgets are usually more trouble than they are worth.

Correct AnswerverifiedShow Answer

An individual retirement account (IRA) is a tax-deferred investment plan designed to encourage workers to save for retirement.

Correct AnswerverifiedShow Answer

Correct Answer
verified

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