HDFS 3350 MASTER 3
Using table A.3 in the appendix, calculate how much Kyle will have in 10 years if he saves $1,575 each year at 4% interest.
1575x12.0061=18,909.61
Using table A.1 in the appendix, calculate how much Rhonda will have in 6 years if she saves $4,500 at 5% interest.
4500x1.3401=6030.45
Which of the following has a maturity date?
CD
The U.S. Bureau of Labor Statistics measures inflation using the
Consumer Price Index
An example of a refundable tax credit would be the
Earned Income Credit
Which of the following reports how much economic activity has occurred within the U.S. borders?
Gross Domestic Product
Patricia has $127,000 in a CD at her bank and $147,000 in a money market account at her credit union. They both are federally insured. Which of the following is correct?
Her funds are completely covered because they are at two different institutions.
Which of the following is true about tax-sheltered income?
It is considered the second best type of income. It is exempt from income taxes in the current year but will be subject to taxation in a later tax year. It is also called tax-deferred income.
Which of the following is true about compounding of interest?
It is earning interest on interest. It depends on the frequency with which interest is compounded. It depends on the periodic interest rate that is applied.
Which of the following organizations administers the insurance for federally chartered Credit Unions?
NCUA
Which of the following involves filing a deceased's person's will, paying debt, and distributing remaining assets?
Probate
During expansion, which of the following is high?
Production
Which of the following business cycle phases is a recurring period of decline in total output, income, employment, and trade?
Recession
Which of the following is illegal?
Tax Evasion
Which of the following is true about flexible spending accounts?
The funds may be used to pay for dependent care for dependents younger than age 13. The funds may be used to pay for eyeglasses, contacts, and copayments. The funds are forfeited if not used within the time limit, unless the policy allows a carryover or grace period.
Which of the following is true about cover letters?
They are designed to express your interest in obtaining an interview. They should sell you to the prospective employer. They should expand on a couple of details from your resume.
Which of the following is true about Health Savings Accounts?
They are for people with high-deductible health care plans. Contributions to the savings account are tax-deductible.. Withdrawals from the savings account are made to pay for medical expenses.
Which of the following operate on a not-for-profit basis?
a credit union
Goals should be based on
a person's values
Goals should be based on
a persons values
How often should a financial checkup be completed?
annually
A balance sheet includes _______, _______, and _______.
assets; liabilities; net worth
A balance sheet includes _______, _______, and _______.
assets; liabilities; net worth
Which of the following is the proportion of your total taxable income that is paid in taxes
average tax rate
Exemptions are
based on the number of people supported by the tax payer's income.
Which of the following shows the number of months a person could continue to meet expenses using only his or her monetary assets if all income ceased?
basic liquidity ratio
Tuition reimbursement, paid vacations, child care, and financial planning services can all be examples of employee _______________________.
benefits
Which of the following benefit programs lets an employee choose which benefit(s) he or she would prefer from a list of available options?
cafeteria plans
Which of the following benefit programs lets employees choose the benefits they want to design their own benefits package?
cafeteria plans
Traditional IRAs
can reduce current year income.
When changing jobs, the textbook talks about an unwise option of what to do with employer-sponsored retirement plans. That unwise option is to
cash it out
Which of the following is the most unwise option for taking care of money in an employer-sponsored retirement plan when changing jobs?
cash it out
An income and expense statement is also known as a(n) _______ statement.
cash-flow
If Mitchell leaves the money he put in a savings account in the account, plus the interest, he will be able to take advantage of
compound interest
The U.S. Bureau of Labor Statistics measures inflation using the
consumer price index
Which of the following shows a view of a person's total debt burden?
debt service-to-income ratio
Which of the following ratios should be 36% or less and decline as one grows older?
debt-to-income ratio
Which of the following ratios should be 36% or less and decline as one grows older?
debt-to-income-ratio
Which of the following is a broad, sustained decline in prices of goods and services?
deflation
Which of the following is the amount of income remaining after taxes and withholdings?
disposable income
Which of the following is a great way to overcome the stumbling block of large unexpected expenses?
emergency fund
Assets on the balance sheet are valued at their
fair market value
Assets on the balance sheet are valued at their
fair market value
Which of the following is an example of a progressive tax?
federal personal income tax
Which of the following states that a financial adviser must always act in the best interest of the client?
fiduciary standard
Which of the following may be used to pay for the care of a dependent younger than age 13 or for qualified, unreimbursed out-of-pocket expenses?
flexible spending account
Which of the following was not mentioned in The Financial Checkup booklet as one of the four important savings?
for a down payment on a home
Which of the following reports how much economic activity has occurred within the U.S. borders?
gross domestic product
Which of the following uses tax-deductible contributions to pay for eligible expenses for individuals with high-deductible health care plans?
health savings account
Which of the following money personalities likes to save money and budget?
hoarder
Which of the following suggests the future direction of the U.S. economy?
index of leading economic indicators
Tax Sheltered Income
is exempt from income taxes in the current year but will be subject to taxation in a later tax year.
What happens to purchasing power when inflation rises?
it declines
According to The Financial Checkup booklet, which of the following is the most important part of auto insurance?
liability
Susan spent $100 on a new edition of the personal finance textbook rather than $75 for a used copy. The additional cost for the new copy is called the ________ cost.
marginal
Which of the following types of assets is primarily used for emergencies, maintenance of living expenses, savings, and payment of bills?
monetary
Which of the following types of assets is primarily used for emergencies, maintenance of living expenses, savings, and payment of bills?
monetary
Which of the following money personalities has a hard time paying bills promptly, avoids making a budget, and doesn't know how much money they have?
money avoider
____________________ are not federally insured but are still considered extremely safe?
money market mutal funds
Examples of adjustments would be
moving expenses to a new job, student loan interest, and contributions to a qualified personal retirement account.
Kurt spent $80 on a new sweater rather than using this money to buy his personal finance textbook. The cost of doing without the textbook is called the _____ cost.
opportunity
To have your bank's standard overdraft practices apply to your debit transactions, you must first
opt in
After hiring an employee, the law requires employers to do all of the following
pay Social Security taxes to the federal government, provide unemployment insurance, provide workers' compensation benefits if the employee is injured on the job
During expansion, which of the following is high?
production
After hiring an employee, the law requires employers to
provide unemployment insurance
Which of the following business cycle phases is a recurring period of decline in total output, income, employment, and trade?
recession
Which of the following is a tax that stays the same for all income which results in lower-income people paying proportionately more in taxes?
regressive tax
A __________________ endorsement uses the phrase For Depost Only on the back of the check. blank
restrictive
The _________________________ is a simple formula for figuring the number of years it takes to double the principal of an investment.
rule of 72
The textbook recommends that anyone looking for a job take advantage of professional and __________________ networking.
social
Which of the following budgeting methods has the strongest control and works especially well with small, variable expenses?
the envelope method
Your marginal tax rate is
the tax rate applied to your last dollar of earnings.
Which of the following is one of the purposes of a revolving savings account?
to cover large nonmonthly expenses
Which of the following is one of the purposes of a revolving savings account?
to cover large nonmonthly expenses to cover yearly unexpected expenses
If allowed in their state, employers may look at an employee's credit report
to determine if the employee will be able to manage important tasks.
Which of the following is the purpose of the Step-Down Principle?
to reduce expenses
All of the following are examples of employee benefits
tuition reimbursement, child care, paid sick leave
Discretionary income is used to pay for things like
vacations
In which of the following areas does a person usually have the most control?
variable expense
In which of the following areas does a person usually have the most control?
variable expenses
A tax-payer would want to itemize their deductions if their tax-deductible expenses
were greater than the standard deduction.
College Graduates
will get approximately 15% return investment on a bachelor's degree.
Which of the following was the first step to budgeting listed in The Financial Checkup booklet?
write down goals
According to The Financial Checkup booklet, which of the following is the third leg of the retirement stool that people usually need?
your own saving and investing
