Personal Finance Questions

Where can you go to buy investments like stocks and bonds? (CHECK ALL THAT APPLY) A. A broker like Schwab or Fidelity B. A Reddit Thread like Wall Street Bets C. A bank like Wells Fargo or Bank of America D. An exchange like NASDAQ or NYSE

A. A broker like Schwab or Fidelity C. A bank like Wells Fargo or Bank of America

If one of your assets decreases in value (e.g. home prices crash, a company in which you hold stock or bonds files for bankruptcy, someone steals cash from your wallet/purse/pocket), your overall net worth won't be severely impacted as long as you... A. Diversified your investments B. Bought a big home C. Get a new job D. Used nearly all your savings on that one asset.

A. Diversified your investments

The Wage and Tax Statement is also known as A. Form W-2. B. Form 1040EZ. C. Form W-4. D. None of the above

A. Form W-2.

Which of the following investment choices best reflects a diversified stock portfolio? A. Investing in an S&P500 index fund B. Investing in a mutual fund that invests in 30-40 oil and gas companies C. Investing in one large-cap restaurant stock D. Investing in 10-20 companies in the technology industry

A. Investing in an S&P500 index fund

What are key tax benefits and contribution differences of traditional and Roth retirement accounts (either IRAs or 401(k)s) 401(k) contributions in 2023 are A. Up to $22,500 for people under age 50 B. Up to $6,500 for people under age 50 C. Pay taxes on income today -- DON'T pay taxes on any of the money when you withdraw it. D. DON'T pay taxes on the income used to contribute today -- pay taxes on the money (your contribution and gain) when you withdraw it.

A. Up to $22,500 for people under age 50

What do you need to open a brokerage account where you can buy and sell different investments like stocks, bonds, mutual funds, etc.? (Check all that apply) A. Your Social Security or Tax Identification Number B. Your email address and phone number C. A financial advisor D. Your paystub E. Income from a job

A. Your Social Security or Tax Identification Number B. Your email address and phone number

Keeping your savings in a bank is safer than in a "good" hiding spot because...(CHECK ALL THAT APPLY) A. Your money in the hiding spot could get stolen (and never returned) B. If the bank faces trouble (loses your money, gets ro you'll get it back, as long as the bank is FDIC insured and you have less than $250,000 in the account. C. A good hiding spot is better than a bank D. Interest rates are low in savings accounts

A. Your money in the hiding spot could get stolen (and never returned) B. If the bank faces trouble (loses your money, gets ro you'll get it back, as long as the bank is FDIC insured and you have less than $250,000 in the account.

What does the term "withholding" mean in reference to your paycheck? A. it is how much is being taken out of your paycheck in taxes B. it is how much you are going to owe the government when you file your annual tax return C. it is the amount of your paycheck that you are NOT being taxed on D. it is how much you earn and includes salary, bonus and commissions

A. it is how much is being taken out of your paycheck in taxes

Which of the statements below is TRUE about filing your taxes, assuming your only income comes from the salary you earn A. you must file your tax return by April 15th of the following year or request an extension by that date B. you do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money C. you need to file your tax return by the end of the calendar year (typically December 31st) D. if your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return

A. you must file your tax return by April 15th of the following year or request an extension by that date

A common advantage of using credit is Ability to obtain needed items now Lower cost for items purchased Less impulse buying Lower chance of overspending

Ability to obtain needed items now

Which of the following is true? A. Only tips paid in cash are taxable. B. Only tip income reported on Form W-2 is taxable. C. Tip income is not taxable. D. All tip income is taxable.

D. All tip income is taxable.

All of the following are insured by the FDIC (meaning you're guaranteed to get your money back), EXCEPT: Money Market Accounts Savings Accounts CDs Index Funds Checking Accounts

Index Funds

The main purpose of buying car insurance is Because you have to have it It protects you from financial disasters It costs more if you have a lousing driving record It allow you to get into accidents and then collect money

It protects you from financial disasters

A common disadvantage of buying a home is: Few financial benefits Limited mobility Restrictions on decorating and having pets Conditions in the lease

Limited mobility

Mr. Johnson received $1,750 on his paycheck for two weeks. He got $275 taken out of his check for taxes and $125 for his health insurance. The amount he had left is defined as his Gross income Income tax Net income Property tax

Net income

A short-term financial goal might include savings for Purchasing a car A child's college fund One's retirement A down payment on a house

Purchasing a car

Which is an example of an income deduction Vacation budget Retirement savings Wages lost due to illness An unexpected salary cut

Retirement savings

Which of the following is not a standard tax deduction from your paycheck? Social Security Savings for retirement state income tax federal income tax

Savings for retirement

Utility companies and medical service organizations commonly offer ___ credit Installment Retail Revolving Single-payment

Single-payment

Which tax may or may not be withheld from your paycheck depending on where you live? FICA Federal All are mandatory withholdings State

State

The more allowances you claim on your W-4... The less money you will see in your paycheck You don't claim allowances on a W-4 The more money you will see in your paycheck The # of allowances has no impact on your paycheck

The more money you will see in your paycheck

Which of these is the best reason for Lisa to monitor her bank account statements online or on her cell phone app? To ensure she's paying her fair share in taxes To determine the exact date she can retire To organize when to pay bills To know how much money she has for budgeting

To know how much money she has for budgeting

A disadvantage of using credit is impulse buying True False

True

A steady employment record helps a person's credit history True False

True

Capital refers to a person's assets True False

True

Installment credit usually allows a person to make additional purchases on an account True False

True

Using the 20-10 rule, a person making $40,000 a year after taxes should have no more than $8,000 of outstanding debt True False

True

One important aspect of ____________ expenses, is that you can change them by changing your lifestyle and spending habits Periodic Fixed Variable Chronological

Variable

This tax form is received when you start a new job. It determines how much money gets taken out of each paycheck. W-4 1099 W-2 1040

W-4

What form do you use to let your employer know how much money to withhold from your pay for federal taxes? W-4 1099 W-9 1040

W-4

Jason is 15 and earned $1450 at his job last summer. Should he file a tax return? Yes, because he may get a refund. No, because he didn't earn enough. Yes. You must file taxes even if you didn't earn enough. No, because you have to be 16 and older to file taxes.

Yes, because he may get a refund.

Buying a home will usually have fewer costs than renting false true

false

Conventional mortgages usually have a rate that changes as market interest rates change. true false

false

Which is not an example of an itemized deduction? home mortgage interest charitable contribution fine for a parking ticket state taxes

fine for a parking ticket

Which of the following is taxable? workers' compensation child support received gifts interest on bank accounts

interest on bank accounts

A larger down payment will reduce the amount of the mortgage need. false true

true

A main advantage of buying is pride of ownership false true

true

The home-buying process ends with closing the purchase transaction true false

true

Using the 20-10 rule, a person earning $1,500 a month should not have monthly credit payments that exceed $150 $300 $30 $20

$150

Shonda earns $8 per hour working at Taco Town. Her paycheck this week is $199 for 30 hours of work. What amount was withheld from Shonda's paycheck for payroll taxes? $240 $59 $161 $41

$41

What do you need to open a 401(k)? (Check all that apply) 1. Your Social Security or Tax Identification Number 2. Your email address and phone number 3. Your paystub 4. A financial advisor 5. An employer who offers a 401(k) to employees.

1,2,5

What do you need to open an IRA? (Check all that apply) 1. Your Social Security or Tax Identification Number 2. Your email address and phone number 3. Your paystub 4. A financial advisor 5. An employer who offers a 401(k) to employees. 6. Income from a job

1,2,6

This is a form you fill out by April 15th to determine how much you either owe or will be refunded in taxes for the previous year. W-4 1040 1099 W-2

1040

The current (Spring 2023) typical interest rate on a savings account is near: 10% 3% 1% 0.01%

3%

Your housing costs will likely be the most expensive monthly expense you have. You should try to keep your housing costs below _______% of your gross monthly income 50% 24% 33% 41%

33%

The deadline for filing your federal tax return each year is _____. April 15th January 1st December 15th March 15th

April 15th

What is one benefit of purchasing saving bonds A. Savings bonds are purchased from commercial banks and guaranteed to increase in value B. Saving bonds are purchased from the government and guaranteed to increase in value C. Saving bonds are long term investments created to help first time home buyers D. Saving bonds ar short term investments backed by the government

B. Saving bonds are purchased from the government and guaranteed to increase in value

What would happen if I didn't file taxes? A. The first time, the IRS would probably overlook it, though if they caught it you'd face jail time, plus owe all the taxes and penalties and interest B. The first time, the IRS would file for you and you'd owe more than you would if you had filed yourself, plus penalties and interest C. Because of account software, it's impossible to avoid filing taxes D. The first time, the IRS would conduct an audit and you'd owe penalties and interest

B. The first time, the IRS would file for you and you'd owe more than you would if you had filed yourself, plus penalties and interest

What are key tax benefits and contribution differences of traditional and Roth retirement accounts (either IRAs or 401(k)s) IRA contributions in 2023 are A. Up to $22,500 for people under age 50 B. Up to $6,500 for people under age 50 C. Pay taxes on income today -- DON'T pay taxes on any of the money when you withdraw it. D. DON'T pay taxes on the income used to contribute today -- pay taxes on the money (your contribution and gain) when you withdraw it.

B. Up to $6,500 for people under age 50

A ____ mortgage has a very large final payment Shared-appreciation Conventional Graduated-payment Balloon

Balloon

Which of the statements below BEST describes the relationship between risk and return when considering an investment? A. No risk, no return B. Low risk, high guaranteed return C. High risk, high potential return D. Risk and return are not correlated

C. High risk, high potential return

What are key tax benefits and contribution differences of traditional and Roth retirement accounts (either IRAs or 401(k)s) Roth IRA or Roth 401(k) A. Up to $22,500 for people under age 50 B. Up to $6,500 for people under age 50 C. Pay taxes on income today -- DON'T pay taxes on any of the money when you withdraw it. D. DON'T pay taxes on the income used to contribute today -- pay taxes on the money (your contribution and gain) when you withdraw it.

C. Pay taxes on income today -- DON'T pay taxes on any of the money when you withdraw it.

When a person invests income, he or she... A. Spends income only on essential goods for the house B. Cuts out all discretionary spending for a short period of time C. Uses money in a way that will increase its value over the long-term D. Spends no money in the short term to save money

C. Uses money in a way that will increase its value over the long-term

A person's regular income is referred to as Capacity Collateral Character Capital

Capital

The charges for settling a real estate translation are also called ___ costs. selling Possession Closing Mortgage

Closing

If you do not have a rental history or employment history, you may need a ____________ to help qualify for an apartment Correct answer: Co-signer Loan Renters insurance Paycheck cashing service

Co-signer

What are key tax benefits and contribution differences of traditional and Roth retirement accounts (either IRAs or 401(k)s) Traditional IRA or 401(k) A. Up to $22,500 for people under age 50 B. Up to $6,500 for people under age 50 C. Pay taxes on income today -- DON'T pay taxes on any of the money when you withdraw it. D. DON'T pay taxes on the income used to contribute today -- pay taxes on the money (your contribution and gain) when you withdraw it.

D. DON'T pay taxes on the income used to contribute today -- pay taxes on the money (your contribution and gain) when you withdraw it.

Which of these statements about gross income and net income is true? A. Gross income is the amount an employee is paid after deductions and taxes, and net income is the total amount an employee earns before deductions. B. Gross income is a tax paid by an employer based on a worker's wages, and net income is a tax on all income that a person earns. C. Gross income is a tax on all income that a worker earns, and net income is a tax paid by an employer based on a worker's wages. D. Gross income is the total amount an employee earns before deductions are applied, and net income is the amount an employee is paid after deductions and taxes.

D. Gross income is the total amount an employee earns before deductions are applied, and net income is the amount an employee is paid after deductions and taxes.

How does investing in the stock market differ from putting money in a savings account at a bank? A. Investing is less risky B. Historically, savings accounts have enjoyed higher returns than investing C. You cannot lose money when investing but you can lose money when saving D. Investing is typically useful for accomplishing long-term goals, whereas savings accounts are useful for short-term savings goals.

D. Investing is typically useful for accomplishing long-term goals, whereas savings accounts are useful for short-term savings goals.

Which of the following is not reported on Form W-2? A. Wages, tips, and other compensation B. Federal income tax withheld C. Medicare tax withheld D. The number of withholding allowances claimed by the employee on Form W-4

D. The number of withholding allowances claimed by the employee on Form W-4

The home-buying process starts with: Locating and evaluating a home Determining homeownership needs Pricing the property Obtaining an appraisal of the property

Determining homeownership needs

To build a credit history a person could Use an ATM several times a month Establish a steady employment record File his or her federal income taxes on time Request to view his or her credit file

Establish a steady employment record

Savings should be treated as another type of ... Expenditure Tax Gross income Net income

Expenditure

Investing in a diversified portfolio of stocks guarantees that you won't lose money with your investments. True False

False

What is the difference between gross pay and net pay? The difference is determined primarily by your current tax bracket Gross pay is after taxes, net pay is before taxes There is no difference between the two Gross pay is before taxes, net pay is after taxes

Gross pay is before taxes, net pay is after taxes

The amount of a mortgage a person can afford is affected by: The cost of insurance Age The location of the house Income

Income

Which of the following sources of income would NOT be counted as part of an individual's gross income? revenue from rental properties child support payments received sales of assets tips

child support payments received

Which of the following IS NOT taxable? lottery and gambling winnings tips child support received unemployment compensation

child support received

Accurate completion of your tax return will show whether you underpaid your taxes and need to pay add'l income tax or if you overpaid and will receive a deduction refund exemption capital gain

refund

The W-4 form lets... your employer know how much to withhold from your paycheck the 3 major credit bureaus know how many dependents you have the government know how much you paid in taxes last year you know how much you paid in taxes last year

your employer know how much to withhold from your paycheck

A 401(k) is offered by _____ _______ ,whereas an IRA is established by____ Both account types help you save for retirement by offering you _______and ________ ____ ___ ______ ________ _______ ______ ______ _______

your employer, you(on your own), tax benefits, returns on your investment that can outpace inflation