Personal Finance
1) What is the total tax rate for Old Age, Survivors, and Disability Insurance? A) 12.4%. B) 10.2% .C) 6.2%. D) 8.4%.
A) 12.4%.
1) Financial knowledge can lead to increased what? A) Confidence. B) Social capital. C) Risk. D) Perception.
A) Confidence.
The most common wage system is based on which of the following? 31) A) Hourly. B)Salary. C)Income. D)Annually.
A) Hourly.
Heuristics is based on what type of experiences? A) Future. B) Present. C) Past. D) Heuristics is not based on experiences.
C) Past.
Those who increase their financial_________ tend to experience greater life and financial well-being. A) ability B) literacy C) knowledge D) risks
C) knowledge
Which of the following is an element in a budget? A) Fixed expenses. B) Variable expenses. C) Income. D)All of these answer choices are correct.
D)All of these answer choices are correct.
Which of the following refers to what you own? A) Assets. B) Liabilities. C) Net worth. D) Principal.
A) Assets.
Which of the following is a supplemental payment usually based on performance or meeting certain production or sales requirements? A) Bonus. B) Commission. C) Salary. D) Income.
A) Bonus.
Which of the following connects you with people in professional, recreational, leisure, and social communities? A) Formal networks. B) Human capital. C) Informal networks. D) Financial capability.
A) Formal networks.
Which of the following includes all resources that can be saved or spent? A) Income. B) Variable asset. C)Expense. D)Liability.
A) Income.
Which of the following includes the interpersonal relationships you form with your family and close friends? A) Informal networks. B) Financial capability. C) Formal networks. D) Human capital.
A) Informal networks.
Which of the following refers to a long-term goal? A) More than 10 years. B) More than 5 years−10 years. C) More than 2.5 years−5 years. D) More than 15 years.
A) More than 10 years.
Which of the following refers to how much you think you will receive or spend in each category? A) Projection. B) Budget. C) Liquidity. D) Fair market value.
A) Projection.
Your cognitive evaluation of the potential gains and losses associated with a course of action is referred to as what? A) Risk perception. B) Risk avoidance. C)Risk tolerance. D)Risk-taking.
A) Risk perception.
What refers to doing something that involves the possibility of both a gain and a loss? A) Risk-taking. B) Uncertainty. C)Risk tolerance. D) Risk avoidance.
A) Risk-taking.
Which of the following refers to financial obligations imposed on individuals and businesses by government entities? A) Taxes. B) Loan. C) Public service. D) Social welfare.
A) Taxes.
From the beginning of your career until retirement, human capital and financial wealth . A) increases; increases B) decreases; increases C) increases; decreases D) decreases; decreases
A) increases; increases
The tax rates on long-term gains are short-term capital gain tax rates. A) lower than B) higher than C) the same as D) None of these answer choices are correct.
A) lower than
1) Which of the following refers to the "S" in SMART goals? A)Specific. B)Strategic. C)Simple. D)Significant.
A)Specific.
If an individual is self-employed and considered an independent contractor, what percent of Social Security and Medicare taxes is he or she required to pay relative to salaried individuals? A) 20%. B) 100%. C) 10%. D) 50%.
B) 100%.
Which of the following refers to your income after deductions? A) Tax formula. B) Adjusted gross income (AGI). C)Gross income. D) Assessed income.
B) Adjusted gross income (AGI).
The relationship between wealth accumulation and risk tolerance is referred to as what? A) Positive. B) Equal. C)Negative. D) No association
B) Equal.
How does relocating to where specific types of human capital are more valued affect how much you can earn? A) Triple earnings. B) Increase earnings. C) Double earnings. D) Decrease earnings.
B) Increase earnings.
Social capital includes which of the following? A) Financial well-being and financial knowledge. B) Informal and formal networks. C) Formal networks and financial knowledge. D) Human capital and informal networks.
B) Informal and formal networks.
How does increasing your number of allowances affect your paycheck? A) It will more than double the amount of taxes automatically withheld. B) It will decrease the amount of taxes automatically withheld. C) It will increase the amount of taxes automatically withheld. D)No change in your paycheck.
B) It will decrease the amount of taxes automatically withheld.
Which of the following refers to what you owe? A) Assets. B) Liabilities. C) Net worth. D) Principal.
B) Liabilities.
Which of the following is a health insurance program for elderly individuals, ages 65 and older? A) Temporary Assistance for Needy Families (TANF). B) Medicare. C) Medicaid. D) Supplemental Nutrition Assistance Program (SNAP).
B) Medicare.
Which of the following may result from spending beyond your income? A) Decreased liabilities. B) More borrowing. C) Increased net worth. D) More saving.
B) More borrowing.
Which of the following refers to income derived from work, interest, and self-employment? A) Capital gain income. B) Ordinary income. C) AGI. D) Gross income.
B) Ordinary income.
Which of the following refers to a tax credit that can reduce an individual's assessed tax below zero? A) Negative effective tax rate. B) Refundable tax credit. C) Nonrefundable tax credit. D) Deduction.
B) Refundable tax credit.
Which of the following represents a SMART goal? A) Retire at age 67 in Florida with an annual income of $80,000. B) Start saving $100 per month 5 years before you expect to need to buy a new car with a $6,000 down payment. C) Begin saving today to buy a beach house. D) Have an income of $180,000 from personal savings, Social Security, and retirementplanassets.
B) Start saving $100 per month 5 years before you expect to need to buy a new car with a $6,000 down payment.
Which of the following refers to the amount remaining after the standard or itemized deduction? A) Net income. B) Taxable income. C) Gross income. D) AGI.
B) Taxable income.
What formulas and calculations are some of the most valuable external finance tools that allow you to consider financial goals in terms of money, time, and interest? A) APY. B) Time value of money (TVM). C) APR. D) Rule of 72.
B) Time value of money (TVM).
1) Which of the following refers to the "T" in SMART goals? A) Term. B) Timely. C) Theoretical. D) Transcending.
B) Timely.
Short-term capital gains A) receive the same capital gains treatment as long-term capital gains. B) are taxed as ordinary income. C) are taxed at 15% or 20%. D) are not taxed since it is viewed as a return of capital.
B) are taxed as ordinary income.
1) Higher financial risk tolerance will help you engage in financial behaviors that have ________ long-term payoffs. A) lower B) greater C) equal D) None of these answer choices are correct.
B) greater
Which of the following refers to the "R" in SMART goals? A)Rampant. B)Relevant. C)Reliable. D)Reportable.
B)Relevant.
Which of the following refers to a category of dependents? A) Qualifying relatives, only. B) Head of household. C) Both qualifying children and qualifying relatives. D)Qualifying children, only.
C) Both qualifying children and qualifying relatives.
Which of the following happens when you sell an asset for less than you paid for it? A) Dividends. B) You break even on the sale. C) Capital loss. D) Capital gain.
C) Capital loss.
1) Which of the following refers to your confidence and peace of mind regarding your financial situation? A) Financial knowledge. B) Financial literacy. C) Financial well-being. D) Financial ability.
C) Financial well-being.
Which of the following is measured by adding up how much the United States produces in goods and services in a year? A) Financial risk tolerance. B) The cost of goods sold. C) Gross domestic product. D) Financial literacy
C) Gross domestic product.
In the heuristics decision-making process, making a commitment to the best option is an example of which step? A) Analyze the situation and data. B) Identify the problem or issue. C) Implement the decision. D) Gather data.
C) Implement the decision.
What type of partnership is designed for professionals working in a partnership so that partners will not be held liable for the negligent actions (and resulting liabilities) of other partners but they will still be liable for the general obligations of the business? A) Limited liability company. B) General partnership. C) Limited liability partnership. D) Limited partnership.
C) Limited liability partnership.
Which of the following refers to being totally responsible for paying all liabilities a business incurs? A) Bankruptcy. B) Self-employed. C) Unlimited liability. D) Limited liability.
C) Unlimited liability.
At what point in time may you have to be taxed on an investment? A) When the investment decreases in value. B) Every tax year. C) When you sell or exchange the investment asset. D)When the investment increases in value.
C) When you sell or exchange the investment asset.
1) People who believe that what happens to them is based on fate or luck might view their financial journey as being uncertain. This is an example of A) financial ability. B) financial literacy. C) feelings of control. D) financial risk tolerance.
C) feelings of control.
Your willingness to take a risk is influenced by your initial_________ and your ultimate preferences. A) financial knowledge B) perception C) financial ability D) risk tolerance
C) financial ability
In the financial marketplace, the only way to accumulate a certain level of wealth is to take with your savings. A) no risks B) all risks C) informed financial risks D) decreased risks
C) informed financial risks 🐱🐉
Poor health may result in a(n) ________ standard of living across the life span. A) higher B) lower C) lower or higher D) unchanged
C) lower or higher
To accumulate wealth, you need to generate a(n) A) loan. B) deficit. C) surplus. D) expense.
C) surplus.
1) What is said to occur when the value of future benefits is perceived to be lower than that of an alternative available right now? A) Procrastination. B) Financial capability. C)Hyperbolic discounting. D) Goalsetting.
C)Hyperbolic discounting.
When you make a deposit, you are essentially _ the bank or credit union money. A)taking B)giving C)lending D)mishandling
C)lending
If you had too much in taxes taken out of your paycheck, what might you qualify for? A) A tax credit. B) A loan. C) A tax deduction. D) A refund.
D) A refund.
1) Example(s) of human capital include which of the following? A) Health. B) Formal education. C) Skill development. D) All of these answer choices are correct.
D) All of these answer choices are correct.
If you are self-employed, how you choose to structure your business can have a big effect on your ability to make decisions about the business, such as issues related to which of the following? A) Limiting your liability. B) Paying taxes. C) Raising and borrowing money. D) All of these answer choices are correct.
D) All of these answer choices are correct.
When setting your goals, which factors should you consider in order to make a meaningful decision? A) Your personal perceptions. B) Your personal preferences. C) Your personal attitudes. D) All of these answer choices are correct.
D) All of these answer choices are correct.
Which of the following describes an employee? A) Taxes are withheld from the paycheck. B) Paid an hourly wage for a guaranteed number of hours each week. C) May incur some expenses in carrying out job duties. D) All of these answer choices are correct.
D) All of these answer choices are correct.
Which of the following is a characteristic of a self-employed individual? A) Placing a high emphasis on individual effort. B) Wanting to be their own boss. C) Possessing a strong sense of individual responsibility. D) All of these answer choices are correct.
D) All of these answer choices are correct.
Which of the following is true about tracking your expenses? A) Once you're fully aware of expenses, you can make changes that will save you money over time. B) Tracking your expenses helps expose spending patterns and their impact. C) Many spending habits are so routine that their cumulative impact is not fully recognized. D) All of these answer choices are correct.
D) All of these answer choices are correct.
Which of the following might a self-employed individual deduct when calculating AGI? A) Miles driven for business. B) Some of the costs of their home. C) Supplies for business. D) All of these answer choices are correct.
D) All of these answer choices are correct.
Which of the following is a payment based on the sale of a product or service? A) Bonus. B) Income. C) Salary. D) Commission.
D) Commission.
Which of the following refers to an asset that decreases in value over time? A) Liability. B) Appreciating asset. C) Liquidity. D) Depreciating asset.
D) Depreciating asset.
Which of the following refers to one's ability to understand and use personal finance information? A) Financial ability. B) Financial literacy. C) Financial well-being. D) Financial knowledge
D) Financial knowledge
Which of the following will provide you with a realistic understanding of your current risk tolerance, financial knowledge, and feelings of control? A) Net worth. B) Credit score. C) Surplus. D) Financial score.
D) Financial score.
Which of the following refers to the time between creating a goal and actually achieving the goal? A) Time to save. B) Time in the middle. C)Intermediate time. D) Goal time horizon.
D) Goal time horizon.
Which of the following does our mind use to make decisions more quickly and easily than if we labor over every choice? A) Hyperbolic discounting. B) Procrastination. C) Behavioral economics. D) Heuristics.
D) Heuristics.
1) Which of the following refers to the "M" in SMART goals? A)Magnitude. B) Momentous. C) Manageable. D) Measurable. Answer
D) Measurable.
Two ways the importance of a personal financial goal can increase are by A) external factors and focusing on things that are out of control. B) internal factors and establishing a single complex goal. C) decreasing the risk tolerance and risk preference. D) external factors and internal factors.
D) external factors and internal factors.
Risk is the_________ associated with any physical, social, emotional, environmental, workplace, or financial activity. A) financial implication B) project result C) benefit D) uncertainty
D) uncertainty
To increase your investment income, you should do which of the following? A) Hold assets over the long term. B) Buy assets that have the potential to go up in value. C) Let the power of compounding generate unearned income. D)All of these answer choices are correct.
D)All of these answer choices are correct.
Using heuristics as a decision-making tool includes which of the following steps? A) Gather data. B) Identify the problem or issue. C) Analyze the situation and data. D)All of these answer choices are correct.
D)All of these answer choices are correct.
