Deck 17: Financial Life Eventsfitting the Pieces Together

Question 1

What is the importance of understanding the financial life cycle?

A)It allows you to be proactive in financial planning to prepare for your changing needs.
B)It allows you to take advantage of the time-value-of-money.
C)It helps you in achieving your long-term financial goals.
D)All of the above are correct.
E)Only A and C are correct.

Answer 1

All of the above are correct.

Question 2

College graduates should be prepared to make many financial decisions during their first decade after graduation.

Answer 2

True

Question 3

If you have good financial goals then you really don't need a financial plan.

Answer 3

False

Question 4

At the end of each year for 25 years you deposit $365 in an account that earns 12% interest.If instead you had begun saving earlier,and had deposited $365 in the account each year for 50 years,how much more money would you have on deposit?

A)$13,607.10
B)$157,557.18
C)$718,449.48
D)$827,339.80

Question 5

It is never a good idea for both spouses to be actively involved in and aware of the family's finances.This can lead to arguments.

Question 6

List the 10 'ingredients' in order to succeed financially.

Question 7

The earlier you start saving for your retirement,the easier it will be to reach your financial goals.

Question 8

Why is it more difficult for women to plan for their retirement than it is for men?

A)On average,men die younger than women.
B)Women generally earn less income and pay less into Social Security than men do.
C)Women rely on defined-benefit plans more than men do.
D)All of the above are correct.
E)Only A and B are correct.

Question 9

You put $5,000 per year in an IRA earning 10% a year starting when you graduate and stop 15 years later.How much will you have for retirement,30 years after you stop depositing,if the account continues to earns 10% a year?

A)$158,862
B)$1,995 420
C)$2,772,054
D)$4,320,889

Question 10

Women are more likely to have a pension than men.

Question 11

Financial goals must be reexamined periodically and adjusted to accommodate changes in your life.

Question 12

As a percentage,there are more elderly men living below the poverty line today than there are elderly women living below the poverty line.

Question 13

Women live,on average,7 years longer than men.

Question 14

Suppose that immediately after graduation you invested $3,000 each year for 15 years and nothing thereafter.You earn 10% on this money.Which of the following is closest to the amount of money you would you have on deposit when you retired in 40 years (25 years after the deposits stopped)?

A)$47,812
B)$523,482
C)$834,295
D)$1,032,736

Question 15

Why is it more challenging for women to become financially security?

Question 16

Which of the following statistics concerning women are not true?

A)About 75% of the elderly people living in poverty are women.
B)Eighty percent of all widows who are now living in poverty were not living in poverty while their husbands were still alive.
C)Almost half of all single elderly women get most of their income from Social Security.
D)Only 22% of women 65 and older received pension benefits,versus 29% of men,and the median amount of the women's pension income was over twice that of men.

Question 17

According to "Step 1: Manage Your Life," what are the two things that,if not eliminated,might jeopardize your future?

Question 18

What is a smart thing for married women to do regarding their personal financial situation?

A)Make sure their plan recognizes that women live longer than men and that half of all marriages end in divorce.
B)Be involved in decisions regarding their husband's employee benefits and retirement plans.
C)See a financial planner about any specific concerns.
D)All of the above are correct.
E)Only A and C are correct.

Question 19

Why is it important for someone twenty five years old to start planning for retirement?

Question 20

Roxanne began saving for retirement at age 23 when she graduated college.She wants to have $2.3 million dollars in her retirement account when she reaches age 55.If she deposits $9,000 each year in an account earning an 11% Annual Rate of Return,will she achieve her goal in time?

A)Yes,she will have over $2.3 million dollars in the account.
B)No,she will have less than $2.3 million dollars in the account.

Question 21

Your spouse's credit score may have a positive or negative impact on your ability to acquire a mortgage together.

Question 22

Part of the getting started stage is to begin saving for your goals.What are the critical steps to doing so?

A)Make savings automatic.
B)Live within your means.
C)Catch your matches.
D)All of the above are correct.
E)Only A and C are correct.

Question 23

Tracking your spending for a month or so will help you plan savings.

Question 24

If you and your spouse have different money management styles,it may be wise to maintain separate checking accounts.

Question 25

In spite of the fact that many younger couples have high living expenses at first,it's is still vitally important to start a savings plan.

Question 26

When you get married,by law you must have joint credit card accounts instead of individual accounts.

Question 27

When you get married it is a good time to evaluate your and your spouse's financial goals and come up with a set of joint financial goals.

Question 28

Part of life event number 1,getting started,is laying the groundwork for your financial goals.Which of the following is part of laying the groundwork?

A)Establishing a budget
B)Checking your credit score
C)Establishing an emergency fund
D)All of the above are correct.
E)Only A and B are correct.

Question 29

Given the current divorce rate in the country if one spouse has good credit established,then it is equally important for the other spouse to establish credit in his or her own name.

Question 30

One of the first things a newly married couple should do is update their financial records and consider making each other the beneficiary on their financial accounts.

Question 31

According to U.S.News and World Reports,the required investment for a medium income family to raise and support a child for 22 years is approximately

A)$52,000.
B)$197,704.
C)$1,000,000.
D)$1,450,000.
E)$3,000,000.

Question 32

Insurance planning becomes much more important when a person gets married.

Question 33

Estate planning is much less important for married people than for single people.

Question 34

For a married couple with opposite spending habits,one checking account for the family is the ideal strategy.

Question 35

According to your textbook,which is a typical financial event that recent graduates may face during their first decade out of college?

A)Buying a car
B)Establishing credit
C)Paying taxes
D)Repaying student loans
E)All of the above

Question 36

What is a reason that your textbook suggests as to why a newly married couple would want to establish separate checking accounts?

A)It makes record keeping much easier.
B)It is preferable if the couple has incompatible money management styles.
C)One always gets a better deal from the bank on two accounts versus one account.
D)All of the above
E)None of the above

Question 37

Sam wants to start saving for retirement.She wants to have $85,000 per year for 25 years in retirement that will start in 40 years.How much must she deposit in equal annual amounts for the next 20 years if she can earn 9% over the life of her investment?

A)$16,319
B)$8,752
C)$2,912
D)$4,325

Question 38

Couples should have many conversations about their views on family finances prior to becoming engaged or married.

Question 39

Your tax status and the tax-advantaged benefits and opportunities afforded you by your employer may change as a result of your marriage.

Question 40

Molly just received a $5,000 inheritance.She wants to open an IRA for retirement,40 years from today.If she can earn 11% per year in her IRA,how much will she be able to take out annually for 20 years in retirement?

A)$16,250
B)$40,812
C)$24,182
D)$35,041

Question 41

Why is discussing personal finances with your significant other so important prior to getting married?

Question 42

Procrastination is the enemy of the power of compounding.

Question 43

In a Wells Fargo survey,over 1,000 adults ages 25-75 were asked if they could go back 5 years,what would they do differently,the most frequently chosen answer was

A)taking care of their physical health,diet and fitness.
B)saving and spending.
C)pursuing different personal relationships.
D)working more to improve their career.

Question 44

It is a good idea to pay all your bills first and then determine how much to save with what is left over.

Question 45

List the main "life events" as discussed in your textbook.

Question 46

What challenges to personal financial planning does marriage present?

A)Setting common goals
B)Establishing a common household budget
C)Asset ownership and estate planning
D)All of the above are correct.
E)Only B and C are correct.

Question 47

How can someone plan for a divorce?

Question 48

Medical insurance can keep medical expenses from becoming a catastrophic financial event.

Question 49

Discuss what is involved in Life Event 1: Getting started.

Question 50

Carrying debt today is limiting your financial options in the future.

Question 51

Buying a home is one of the smartest investments you can make.What are the proper steps necessary to make sure you do it right?

Question 52

Living below your means leads to a harsh,barren lifestyle with little or no pleasure in life.

Question 53

How can someone plan for a major illness?

Question 54

Living below your means deals with buying what you need versus buying what you want.

Question 55

Opening a 529 plan for yourself near the end of your career is a good means to save for your retirement.

Question 56

How should a family plan for having children from a personal financial perspective?

Question 57

Understanding key personal finance topics can prevent you from being a victim to fraud and self-interested behaviors of sales people and financial advisors.

Question 58

The best investment advice for younger people is to be conservative and avoid risk.

Question 59

A budget is essential for a recent college graduate with no dependents.

Question 60

The key to keeping the cost of home and auto insurance down is to keep your deductibles as high as you can afford.

Question 61

On average,married men earn 26% more money than unmarried men.

Question 62

Your potential income sources should be evaluated prior to having children.

Question 63

There are always positive things you can do to change your credit score so it is worth the time to try and manage it.

Question 64

According to the Keown book,in 2017,the average interest rate on a credit card was around 15.1 percent-expensive borrowing,to be sure.

Question 65

At the beginning of 2016,according to CreditCards.com and Cardweb.com,the average credit card debt per household with at least one credit card was $16,048,up from $2,985 in 1990.

Question 66

Suppose that you want to purchase a home.Your lender has told you that the standard limit for your total debt limit ratio is ________ including your mortgage debt.

A)24%
B)36%
C)38%
D)40%
E)none of the above

Question 67

Which of the following is one of the "keys to financial success" as outlined in Chapter 17 of your textbook?

A)Live Below Your Means
B)Hide Your Plastic
C)Realize You Aren't Indestructible
D)All of the above

Question 68

Which of the following statements is correct?

A)You should spend less than you earn and budget your money.
B)You should know the costs of borrowing.
C)You should understand the difference between good and bad debt.
D)You should make sure that you can repay what you borrow.
E)All of the above statements are correct.

Question 69

What does the phrase "living below your means" really mean and how is it related to wealth building?

Question 70

Which of the following does a budget help you accomplish?

A)It allows you to not think about what you spend money on.
B)It allows you to live above your means.
C)It forces you to use restraint.
D)All of the above
E)None of the above

Question 71

Discuss why budgeting is so critical to financial success and what it forces you to do.

Question 72

According to your text,is it recommended that couples have a joint credit card or not?

A)No,it is best for couples to have their own credit cards.
B)Yes,it is important for couples to have joint credit cards.

Question 73

Why are stocks risky,but not as risky as not investing in them?

Question 74

The debt limit ratio is

A)total monthly take-home pay divided by total monthly nonmortgage payments.
B)total monthly nonmortgage payments divided by total monthly take-home pay.
C)total monthly gross pay divided by total monthly mortgage payments.
D)total monthly mortgage payments divided by total monthly gross pay.

Question 75

According to your text,which of the following is true regarding employment in today's world?

A)Your history with the company is all that matters.
B)Working at a company for many years ensures that you will keep your job.
C)Reinventing and upgrading your skills is a necessity in today's business world.
D)None of the above.

Question 76

The interest on your mortgage is generally tax deductible and this tax benefit should be considered when determining which type of debt you should use.

Question 77

Studies show that there is an inverse relationship between education and playing the lottery,with 54 percent of lottery players earning less than $40,000.

Question 78

Only people 40 years or older should max out their retirement contributions at work.

Question 79

Which of the following is not true regarding investing in stocks?

A)They are risky,but not as risky as not investing in them.
B)Mutual funds are an easy way to invest in stocks and diversify.
C)You should let asset allocation decisions be guided by your time horizon.
D)You should review the time dimension of investing.
E)All of the above are true statements.

Question 80

Which of the following is considered to be a key element to effective debt management?

A)Know and understand the costs of debt.
B)Complete a budget: always spend more than you earn.
C)Take the largest possible loan you can obtain.
D)Accept credit whenever it is offered.
E)None of the above