HW 7
Tony struggles to save money. He knows it is important, but his immediate needs and wants make it difficult for him not to spend the money he has set aside. Which of the following options would be most effective for him to start building savings?
Automatically having money deposited into a restricted account each month.
Which of the following statements regarding the taxation of U.S. savings bonds is correct?
Interest on I bonds and EE bonds is taxed by the federal government when the bonds are redeemed.
What are benefits of a custodial IRA?
It offers tax-deferred growth on investment earnings, allows minors to build long-term savings, and gives minors control of assets in the IRA once they reach the age of majority.
How can Karina redeem a U.S. savings bond?
Log into her Treasury Direct account and follow the redemption procedure.
If a parent's intent is to save for their child's education, which savings product is best?
Qualified Tuition Plan.
Which of the following is a benefit of holding money in a CD for an emergency fund?
The money is earning a higher rate of return than a savings account.
A(n) _______ seals your credit reports so that _______ cannot be opened.
credit freeze; new accounts.
Roth IRA accounts are unique because:
investment earnings receive unique tax treatment.
One strategy to avoid prize scams from telemarketers is to:
never pay anything to receive a free prize and never give your credit card number out over the phone unless you initiated the phone call.
Which of the following sources of emergency funds will have the least negative impact on your lifetime financial situation if the source is used to meet emergency expenses?
taking money from your savings account
Borrowing money in the event of job loss is a bad idea because:
you may not have access to credit or other means to repay the debt, and it may lead to bigger problems
Which of the following is not a strategy to protect against identity theft?
Never use credit cards online since nearly all identity theft occurs online.
Bart has been a successful financial advisor for more than 10 years. During that time, he has generated returns that have never been less than 5% annually. He does not advertise but that has not stopped investors from opening new accounts with his firm. It turns out that Bart has been taking the deposits of new investors, keeping a portion for himself, and sending the rest to earlier investors. Bart is running a(n):
ponzi scheme
A fraud that entails recruiting new members to sell products or services and to also recruit additional new members is called a(n):
pyramid scheme
Which of the following has the highest level of liquidity
savings accounts
Lannie funded her Roth IRA yesterday. Unfortunately, today she had an unexpected financial emergency. What is the earliest she can take out her contribution to the Roth IRA without a penalty?
today
