 |
| 1 | |
Once you have set up a budget and handled your ordinary expenses, the first thing to do with any extra money you have is to: |
| | A) | start a savings plan. |
| | B) | pay off your debts. |
| | C) | start your own business. |
| | D) | spend it on the things you would like but that aren't included in your budget. |
|
|
|
| 2 | |
Which of the following accounting statements would assist an individual in taking inventory of personal assets and liabilities? |
| | A) | income statement |
| | B) | balance sheet |
| | C) | return on assets statement |
| | D) | statement of cash flows |
|
|
|
| 3 | |
Investing in a home is generally considered a: |
| | A) | poor choice when compared to renting. |
| | B) | wise investment. |
| | C) | luxury that should be postponed as long as possible. |
| | D) | good decision, but only if you've saved enough to pay half down. |
|
|
|
| 4 | |
Over the long-run, investing in __________ has proven to be a good strategy for obtaining a high rate of return. |
| | A) | U.S. government bonds |
| | B) | certificates of deposits |
| | C) | corporate bonds |
| | D) | stocks |
|
|
|
| 5 | |
Given a 25% tax bracket, the after-tax cost of a house mortgage interest payment of $1,000 would be: |
| | A) | $ 250. |
| | B) | $ 750. |
| | C) | $1,000. |
| | D) | $1,250. |
|
|
|
| 6 | |
Petulia has been following the stock market, and has noticed that it has generally been declining for the last several weeks. Many of her friends have sold stock, but Petulia looks at this situation as a good opportunity to buy. Petulia's views are consistent with the ___________ approach to investing in the stock market. |
| | A) | contrarian |
| | B) | opposing |
| | C) | arbitrarian |
| | D) | negativist |
|
|
|
| 7 | |
________ is a form of life insurance that provides both a savings plan and pure insurance coverage. |
| | A) | Term life insurance |
| | B) | Growth-increasing life insurance |
| | C) | Whole life insurance |
| | D) | Multiyear level-premium insurance |
|
|
|
| 8 | |
Hernando and Margarita have decided to take out an umbrella policy from an insurance company. The main reason they would probably want to do this would be to: |
| | A) | protect against major disasters, which are known as "rainy days." |
| | B) | ensure that any children they have will be guaranteed the right to buy insurance at some future date. |
| | C) | save money by having one company provide a variety of different types of coverage. |
| | D) | allow the payments to be part of their will. |
|
|
|
| 9 | |
A Roth IRA offers employees an incentive to save for their retirement by: |
| | A) | deferring taxes on income contributed to the IRA. |
| | B) | eliminating taxes on the withdrawals from the IRA. |
| | C) | eliminating taxes on the income contributed to the IRA. |
| | D) | allowing employees to withdraw their contributions at any time with no penalty. |
|
|
|
| 10 | |
A Keogh retirement plan would be used by a(n): |
| | A) | self-employed artist. |
| | B) | employee at a small manufacturing firm. |
| | C) | CEO of a major corporation. |
| | D) | librarian at a city library. |
|
|
.