Deck 5: Mini Personal Finance

Question 1

Even if the initial credit card offer is a zero or very low percentage interest rate, that interest rate will MOST LIKELY ________ when the promotional period ends.

A)stay the same
B)increase each year
C)increase
D)decrease

Answer 1

C

Question 2

One way to establish credit is to begin with a single store credit card or a single-purpose credit card, such as a gas card.

Answer 2

True

Question 3

Disability insurance protects your home and the contents inside.

Answer 3

False

Question 4

________ expenses are items such as taxes or donations that are paid, but not on a monthly basis.

A)Invisible
B)Fixed
C)Periodic
D)Unexpected

Question 5

Money management is critical for corporations, but not for individuals.

Question 6

Making a spending plan is an example of which step in financial planning?

A)create a budget
B)execute the plan
C)set financial goals
D)take a financial inventory

Question 7

If you are insuring an older car, it always makes financial sense to carry the cost of collision and comprehensive coverage.

Question 8

If you are self-employed or your employer does not offer retirement benefits, you should set up your own retirement program.

Question 9

You were in the bookstore and, at the last minute, decided to buy a pack of gum. The gum is MOST LIKELY an example of a(n)________ expense.

A)variable
B)invisible
C)fixed
D)periodic

Question 10

When an individual or a family manages the ways in which monies are budgeted, saved, invested, preserved for future life events, and protected against risks, it is called ________.

A)personal management
B)corporate finance
C)corporate management
D)personal finance

Question 11

What is the first step in developing a financial plan?

A)set financial goals
B)know where your money goes
C)take a financial inventory
D)create a budget

Question 12

What one owns minus what one owes is ________.

A)assets
B)liabilities
C)gross worth
D)net worth

Question 13

Monthly student loan payments are an example of a(n)________ expense.

A)variable
B)unexpected
C)invisible
D)fixed

Question 14

To use a credit card wisely, pay off the balance in full every ________.

A)year
B)month
C)quarter
D)ten years

Question 15

Pension plans are retirement plans established by your employer.

Question 16

Planning to buy a house in ten years is an example of financial planning step 2: set financial goals.

Question 17

Paying off all credit card debt is an example of which step of financial planning?

A)take a financial inventory
B)know where your money goes
C)execute the plan
D)monitor and assess your plan

Question 18

Showing future lenders that you have a good history with credit will help you when you apply for car loans or a mortgage.

Question 19

Tax rates progressively increase as income increases.

Question 20

It is not at all necessary to revisit a financial plan periodically.

Question 21

All of the following are deductions from taxable income EXCEPT ________.

A)financial payments to a tax-deferred retirement plan
B)financial payments to charity
C)financial payments for personal clothing
D)financial payments for interest on mortgages

Question 22

How can online resources and software help with money management?

Question 23

What is a credit score?

Question 24

What is the difference between defined benefit plans and defined contribution plans?

Question 25

At 3 percent interest, it will take ________ years to double an amount of money invested.

A)24
B)36
C)72
D)12

Question 26

Special retirement pretax savings accounts created by the government are ________.

A)Roth IRAs
B)pension plans
C)IRAs
D)NDAs

Question 27

An arrangement that pays to replace your possessions if they are stolen is ________ insurance.

A)health
B)homeowner's
C)life
D)disability

Question 28

You earned $20,000 in taxable income. The tax rate on the first $10,000 is 10%. The tax rate on income between $10,001 and $20,000, inclusive, is 20%. Your tax is ________.

A)$10,000
B)$1,000
C)$2,000
D)$3,000

Question 29

Give an example of an unexpected expense.

Question 30

What is compound interest?

Question 31

An arrangement that replaces the income of a person who dies is ________ insurance.

A)disability
B)health
C)life
D)death

Question 32

An arrangement that pays for a hospital stay is ________ insurance.

A)car
B)health
C)disability
D)life

Question 33

The value of a new car depreciates ________ percent almost as soon as it is driven off the dealer's lot.

A)100
B)20 to 30
C)40 to 60
D)0 to 10

Question 34

Special retirement AFTER-TAX savings accounts created by the government are ________.

A)IRAs
B)pension plans
C)403(b)plans
D)Roth IRAs