Question 1

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?​

Accepted Answer

Taking advantage of your employer's "match" is a way to receive free money to deposit into a tax-sheltered retirement plan. Many employers offer a matching contribution when you contribute a certain amount, up to a certain percentage of your income. This is essentially free money that can help boost your retirement savings.

Question 2

What statement is not accurate regarding participation in an HSA?​

Accepted Answer

Employers are not prohibited from making contributions to their employees' HSA. In fact, many employers offer contributions as part of their benefits package.

Question 3

The most recognized professional designation held by financial planner is the​

Accepted Answer

The most recognized professional designation held by financial planners is the Certified Financial Planner (CFP). This designation is granted by the Certified Financial Planner Board of Standards and requires extensive education, experience, and passing a rigorous exam.

Question 4

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?​

Accepted Answer

The yearly tax savings can be calculated as:
($450 x 12 months) x 28% = $1,512. Therefore, the answer is choice letter C.

Question 5

Occasionally,the economy will dip into a trough before it has reached a new peak after a previous trough.This phenomena is called a​

Accepted Answer

A double dip recession occurs when an economy briefly recovers from a recession but then experiences another downturn before it fully recovers to the previous peak. It is characterized by a dip in economic activity, followed by a short-lived recovery, then another dip. It is also known as a W-shaped recovery, as the graph of economic activity resembles the letter W.

Question 6

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a​

Accepted Answer

The fiduciary standard requires the financial planner to place the client's interests ahead of their own, even if it means recommending a product or service that generates less compensation for the planner. This standard ensures that the planner acts ethically and provides unbiased advice, which is in the client's best interest.

Question 7

Paying expenses with pretax dollars​

Accepted Answer

The answer of Paying expenses with pretax dollars​
...

Question 8

Which form of compensation is not considered an employee benefit?​

Accepted Answer

Commissions are not considered an employee benefit as they are a form of variable pay directly tied to an employee's performance or sales. Paid holidays, health insurance, and retirement plans are considered employee benefits.

Question 9

A method by which one can compare cash flows across time,either as what a future cash flow is worth today (present value)or what an investment made today will be worth in the future (future value)is called​

Accepted Answer

The method described is called "time-value of money". It involves calculating the present value of a future cash flow or the future value of an investment made today, taking into account the effects of interest and inflation over time. This concept is important in finance, as it allows investors and analysts to compare the profitability of different investments or evaluate the costs and benefits of different financial decisions. Compounding and simple interest are related to the calculation of interest payments over time, but do not capture the full scope of the time-value of money concept. Marginal analysis is a different concept altogether, related to the evaluation of small incremental changes in production or consumption.

Question 10

The present value of an annuity is the ____ worth of a stream of payments to be received in the future.

Accepted Answer

The present value of an annuity refers to the current worth of future payments. Therefore, the best choice is D, which represents "current."

Question 11

A worker covered by a health care plan might have to pay the first $1000 of any health expenses during a year.This requirement is called the​

Accepted Answer

The requirement for a worker to pay the first $1000 of any health expenses during a year is called a deductible.

Question 12

During a recession,people and business are likely to engage in ____________;meaning that their use of credit will decrease.

Accepted Answer

During a recession, people and businesses tend to reduce their use of credit and focus on paying off their existing debts. This process is known as deleveraging.

Question 13

Which of the following plans,often provided to workers by their employer,allows the employee to choose among a listing both tax-sheltered and non-tax-sheltered benefits?​

Accepted Answer

A cafeteria plan, also known as a flexible benefit plan, allows employees to choose from a selection of benefits, which may include tax-sheltered options like health insurance, retirement savings plans, and flexible spending accounts, as well as non-tax-sheltered benefits like life insurance and disability coverage. These plans are often provided by employers as a way to offer more benefits options to employees and to give them more control over their benefits.

Question 14

A flexible spending account (FSA)is​

Accepted Answer

A flexible spending account (FSA) is a plan offered by some employers that allows employees to set aside a portion of their pre-tax salary to pay for qualified medical or dependent care expenses. This means that the employee's taxable income is reduced, and they can use the pre-tax money to pay for eligible expenses. FSAs are not available through all employers and are not funded by the employer. Any unused funds in the FSA at the end of the year may be forfeited, but they are not considered taxable income to the employee.

Question 15

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called​

Accepted Answer

Stagflation is a condition of slow economic growth, high unemployment, and rising prices. It is considered a difficult situation for policymakers as the traditional remedies for inflation, such as raising interest rates, may further slow down growth and exacerbate unemployment. Deleveraging refers to the process of reducing debt levels, implosion refers to a sudden collapse, and inversion refers to a phenomenon in which short-term interest rates are higher than long-term interest rates.

Question 16

Employer-sponsored retirement plans include all of the following except​

Accepted Answer

IRA is not an employer-sponsored retirement plan. It is an individual retirement account that can be opened and managed by any individual, regardless of whether or not they are employed. The other options listed (401(k), 403(b), and 457) are all employer-sponsored retirement plans.

Question 17

If you receive tax-sheltered income,it means that​

Accepted Answer

Tax-sheltered income means that the taxes on the income will be deferred until a later date. This could include contributions to retirement accounts like 401(k)s or traditional IRAs, where taxes are not paid on the contributions until the money is withdrawn in retirement.

Question 18

Which of the following statement(s)is (are)correct?​

Accepted Answer

Fee-only planners do not sell financial products, such as stocks or insurance. Commission-only financial planners/brokers are paid solely by the commissions they receive on the financial products they sell to their clients. Although fee-only planners may benefit from steering a client to a specific financial product, they are not compensated through commission and their advice is not influenced by commission-based sales goals. From the point of view of the client, there is a significant difference between a fee-only planner and a commission-only planner as the latter may prioritize their own financial gain over the client's best interests.

Question 19

Which of the following is not an advantage of participating in your employer's retirement plan?​

Accepted Answer

Participating in an employer's retirement plan reduces your take-home pay as contributions are deducted from your gross income before taxes are taken out. This is not an advantage but rather a trade-off for the benefits of tax-deductible contributions, employer matching contributions, and tax-deferred growth.

Question 20

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed​

Accepted Answer

In an employer-sponsored retirement plan such as a 401(k) or IRA, interest, dividends, and capital gains are not taxed until funds are withdrawn from the plan. This is known as tax-deferred growth, and it allows the funds in the account to grow without being reduced by taxes each year. Once funds are withdrawn, they are taxed as ordinary income.

Quiz 1: Understanding Personal Finance

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?

What statement is not accurate regarding participation in an HSA?

The most recognized professional designation held by financial planner is the

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?

Occasionally,the economy will dip into a trough before it has reached a new peak after a previous trough.This phenomena is called a

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a

Paying expenses with pretax dollars

Which form of compensation is not considered an employee benefit?

A method by which one can compare cash flows across time,either as what a future cash flow is worth today (present value) or what an investment made today will be worth in the future (future value) is called

The present value of an annuity is the ____ worth of a stream of payments to be received in the future.

A worker covered by a health care plan might have to pay the first $1000 of any health expenses during a year.This requirement is called the

During a recession,people and business are likely to engage in ____________;meaning that their use of credit will decrease.

Which of the following plans,often provided to workers by their employer,allows the employee to choose among a listing both tax-sheltered and non-tax-sheltered benefits?

A flexible spending account (FSA) is

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called

Employer-sponsored retirement plans include all of the following except

If you receive tax-sheltered income,it means that

Which of the following statement(s) is (are) correct?

Which of the following is not an advantage of participating in your employer's retirement plan?

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed

Quiz 1: Understanding Personal Finance

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?​

What statement is not accurate regarding participation in an HSA?​

The most recognized professional designation held by financial planner is the​

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?​

Occasionally,the economy will dip into a trough before it has reached a new peak after a previous trough.This phenomena is called a​

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a​

Paying expenses with pretax dollars​

Which form of compensation is not considered an employee benefit?​

A method by which one can compare cash flows across time,either as what a future cash flow is worth today (present value) or what an investment made today will be worth in the future (future value) is called​

The present value of an annuity is the ____ worth of a stream of payments to be received in the future.

A worker covered by a health care plan might have to pay the first $1000 of any health expenses during a year.This requirement is called the​

During a recession,people and business are likely to engage in ____________;meaning that their use of credit will decrease.

Which of the following plans,often provided to workers by their employer,allows the employee to choose among a listing both tax-sheltered and non-tax-sheltered benefits?​

A flexible spending account (FSA) is​

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called​

Employer-sponsored retirement plans include all of the following except​

If you receive tax-sheltered income,it means that​

Which of the following statement(s) is (are) correct?​

Which of the following is not an advantage of participating in your employer's retirement plan?​

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed​

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?

What statement is not accurate regarding participation in an HSA?

The most recognized professional designation held by financial planner is the

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?

Occasionally,the economy will dip into a trough before it has reached a new peak after a previous trough.This phenomena is called a

A financial planner who makes recommendations solely based on the best interest of the client regardless of the impact on the planner is said to adhere to a

Paying expenses with pretax dollars

Which form of compensation is not considered an employee benefit?

A method by which one can compare cash flows across time,either as what a future cash flow is worth today (present value) or what an investment made today will be worth in the future (future value) is called

A worker covered by a health care plan might have to pay the first $1000 of any health expenses during a year.This requirement is called the

Which of the following plans,often provided to workers by their employer,allows the employee to choose among a listing both tax-sheltered and non-tax-sheltered benefits?

A flexible spending account (FSA) is

A condition of stagnant economic growth and high unemployment accompanied by rising prices is called

Employer-sponsored retirement plans include all of the following except

If you receive tax-sheltered income,it means that

Which of the following statement(s) is (are) correct?

Which of the following is not an advantage of participating in your employer's retirement plan?

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed