exam 1
Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a debtor seeking to erase all debts will have to wait ___ year(s) from her last bankruptcy before she can file again.
8
The maximum that an individual can contribute to a Roth IRA for the 2020 year is:
$6,000.
In 2021, the U.S. federal tax tables included tax rates of:
10%, 12%, 22%, 24%, 32%, 35%, and 37%.
Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.
20%
A typical grace period offered by many credit card issuers is:
20-25 days
if you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately?
file a policy report
Most products come with some guarantee of quality. This type of warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
full warranty
Most products come with some guarantee of quality. This type of warranty covers the product's intended use or other basic understandings that are not in writing.
implied warranty
A certificate of deposit that has earnings based on the stock market is called a(n):
indexed cd
The rising or falling of prices that causes changes in buying power is referred to as __________blank risk.
inflation
The inability to pay debts when they are due because liabilities far exceed the value of assets is called:
insolvency
Changes in the cost of money is referred to as __________blank risk.
interest rate
The dealer's cost is also known as the:
invoice price
If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced?
Taxes would be reduced by (Tax deduction) × (Tax rate) = $1,000 × 25% = $250.
At the end of the year, employees receive a __________blank form that reports annual earnings and the amounts deducted for taxes from their employers.
W-2
A prearranged loan for a specified amount that a consumer can use by writing a special check is known as:
a revolving check credit
A time deposit is also known as:
a savings account
The stages in the family situation and financial needs of an adult is called the:
adult life cycle.
The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on:
all
The question "What are your assets and net worth?" relates to:
capital
Money management refers to:
day-to-day financial activities.
Individuals can file their federal taxes using all of the following except:
delivery in person
The first step of the financial planning process is to:
determine your current financial situation.
The money left over after paying for housing, food, and other necessities is called:
discretionary income
Every decision involves uncertainty, which is referred to as:
evaluating risk.
Which of the following is organized as a corporation with investors (stockholders) contributing the needed capital to operate?
A commercial bank
The Truth in Savings Act requires financial institutions to disclose the __________blank on savings accounts.
AYP
George Franklin paid taxes of $4,375 on a taxable income of $32,000. What was his average tax rate?
Average taxes = Taxes paid/Taxable income = $4,375/$32,000 = 0.1367, or 13.67%; rounded to 13.7%.
Which of the following are two personal financial statements that you create yourself?
Balance sheet and cash flow statement
A tax imposed on the value of a person's property at the time of death is called a(n):
Estate tax.
Tax assistance sources include all of the following except:
IRS publications. IRS phone hotline. The Ernst & Young Tax Guide. The Internet. All of these are tax assistance sources.
Which of the following best describes the concept of the time value of money?
Increases in amounts of money as a result of interest earned
Given the following information, calculate the debt-payments ratio: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Current liabilities = $2,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050
Monthly credit payments ÷ Take-home pay = $800 ÷ $2,300 = 0.3478, or 34.78%.
Which of the following items should be shredded to protect yourself from identity theft? - Magazines - Papers with personal information - envelopes - Campaign mail - Newspaper ads
Papers with personal information
Given the following information, calculate the debt ratio percentage: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050
liabilities/net worth 33.33%
The difficulty of converting savings and investments to cash is referred to as __________blank risk.
liquidity
Which of the following refers to the opportunity to withdraw your money on short notice without incurring a loss in value?
liquidty
A process used to settle grievances in a nonbinding process is called a(n):
mediation
Discretionary income equals:
money left over after paying for housing, food, and other necessities.
Take-home pay is also called:
net pay.
Attempts to increase income through employment are part of the __________blank component of financial planning.
obtaining
Properly maintaining and operating the product is part of the __________blank phase of the research-based buying process.
post purchase
Problem identification is part of the __________blank phase of the research-based buying process.
pre shoppping
A partial refund of the price of a product is called a(n):
rebate
Credit bureaus get their information from all of the following sources except: - banks. - credit card companies. - finance companies. - references.
references
Which of the following is a type of electronic payment?
smart card
The amount printed on a label with the suggested retail price that is posted on a vehicle is called the:
sticker price
If a check is lost or stolen, you should use a:
stop payment order
If you want to buy a relatively large quantity of U.S. savings bonds, you may purchase them through:
the treasury/direct account
Opportunity cost refers to:
what you give up by making a choice.
