Personal Finance 1904 Book Quizzes

There are so many different types of taxes and so many rules involved that even experienced tax professionals do not know it all.

True

Understanding time value of money is fundamental to making good financial decisions

True

You can become a better consumer by learning to shop price per quantity.

True

One of the best ways to become a smarter consumer is to get the best _______ on every purchase

Value

Lenders want to make sure borrowers have the ________ to repay their loans and the willingness to use their resources to do so.

ability

On average cars _________ or lose about twenty percent of their value each of the first few years

depreciate

Tax ________ means not paying all taxes that are legally owed, such as not reporting all income or making false claimed for ineligible credits or deductions.

evasion

It is not a good idea to walk-through an apartment with the landlord or their representative before occupying a newly rented apartment

false

home owners are viewed by the financial industry as being less stable

false

The way to get the best deal on a car is to:

A negotiate price only, then negotiate trade in only, then negotiate financing only

A person can have a negative _________

A net worth

The first thing to do to get out of debt it to

A stop borrowing money

It is difficult to pinpoint how much is too much money when it comes to overspending since every person's __________ is different.

A threshold

Insurance is just one piece of _________

A. a larger risk management plan

To properly buy insurance

A. buy the broadest coverage available

Each type of insurance has its own type of __________

A. deductible

The question, "how much money did Grandma put into an account in the beginning?" implies an annuity.

False

There is no such thing as good debt or bad debt.

False

A full understanding of ____________ and a simple financial calculator greatly improves financial capability

Time value of money

A basic understanding of how insurance companies work is important to understand how to reduce insurance costs while maximizing protection

True

A big advantage to renting is that the home requires little maintenance costs from the renter

True

Completing a degree in the field of a dream job increases the chances of getting the next job on that dream career path

True

Good financial goals are S.M.A.R.T. goals

True

It is a very good idea to make sure all correspondence with a collection agency is done by certified mail

True

It is important to continually plan for a career

True

Maintaining good physical health is also an investment in good financial health

True

Over the long run prudent financial planning will slowly eliminate the need for life insurance

True

People can gain control of their spending by creating a budget and choosing where to spend their money

True

_________ is used to help protect from financial loss due to disability, illness, death, property loss, and liability

insurance

car dealers often show customers the ______ price during a purchase negotiation.

invoice

Over the long run prudent financial planning will slowly eliminate the need for ________ insurance

life

In most cases the total cost of a new car is ______ expensive than a used one

more

When deciding to buy a house your __________ should be used to determine if there is sufficient cash to cover the costs of a down payment, the costs associated with closing on the home such as attorneys fees, home inspections, property taxes, and the cost of obtaining a mortgage

net worth statement

To answer any time value of money question, at least _________ of the five pieces of information must be known

three

An express warranty is simply one that is expressed or documented

true

Consumer reports is an organization dedicated to consumer protection

true

Good reasons for buying a new car include reduced maintenance warranty coverage, roadside assistance, and peace of mind

true

Living on less the right way means you have to drastically alter your lifestyle

False

The purpose of insurance is not to protect against financial catastrophe

False

Although rarely thought of this way, for most people their __________ burden is actually their largest annual household expense.

A

Robert just recieved his first paycheck after starting his new job just after graduating from college. He was surprised by how much less his net pay is from his gross pay. he calculated that a total of 33% of his earning was withheld to pay taxes. he is now experiencing buyers remorse for purchasing a new $300 game console. Robert realized that he paid for the game console with after-tax dollars. how much did he really have to earn to pay for the console.

A

There are basically three ways to complete a tax return. you can fill out the return yourself by hand, you can hire a tax professional, or:

A

In 1992 Robert could buy a super sugar deluxe chocolate candy bar for 1 dollar. Today in 2012 he pays $2.50 to buy a new and improved extra super sugar deluxe chocolate candy bar. What inflation rate caused roberts chocolate habit to increase by $1.50 over the last 20 years?

A 0.0469

While standards can adjust at any time, a credit score of ________ or above has historically been considered the best for most people.

A 760

Just because someone is approved for a loan does not mean they can _______ it

A Afford

___________ insurance coverage pays for damages to a car when iti is involved in an accident

A Collision

A(n) ___________ score is derived from information gathered from a credit report.

A Credit

_________ from the different credit reporting agencies may look somewhat different from each other

A Credit reports

The first step in developing a positive ________ at work is to believe in one's self.

A attitude

Most experts agree that a home buyer should employ a _________ real estate agent

A buyers

As part of the budget process one should:

A compare estimated expenses with actual expenses

The power of __________ is how a small amount of money, such as a one-time deposit of $2500, grows into a million dollars

A compounding

For most people, how they manage their career is one of the biggest personal financial _________ they will ever make.

A decisions

The very first step in ones financial plan is

A develop their goals

Very few people truly understand how their housing needs are so closely tied to their other ________

A goals

For a person to get their dream job, they must identify:

All of the above are correct. pg. 27 top of page

When looking to buy a home, to be in a much stronger position to negotiate with potential home sellers the home buyer should:

B Get preapproved for a mortgage

Charles never seems to have enough money to cover all his expenses for the month. He has a financial plan in place and reviews his budget about once every three months. He tracks and records his income and expenses when he thinks of them on his budget worksheet. Which of the following is the most likely reason Charles is experiencing difficulty with his financial plan?

B L.I.F.E.

Which of the following is not one of the recommended strategies for paying off debt

B Pay the lowest rate first

Mae and Robert were discussed how much life insurance they could purchase for Robert. Robert makes $52,000 working for the internal revenue service and Mae makes $61,000 as a director of admissions as the local community college. Mae and Robert have a mortgage on their home of $140,000, a car loan of $14,000, a student loan of $18,000, and a credit card balance of $3,000. They budget wisely and use every dollar of their salaries to pay their bills and fund their savings goals. What is the easiest way for Robert to determine how much life insurance he should buy?

B Robert should determine the lump sum amount that when conservatively invested would provide an annual payment to Mae that is equal to his current salary

A person can get their __________ ____________ for free, but they likely have to pay to see their __________ __________.

B credit reports, credit score

When purchasing a car people want to avoid making an ___________ decision

B emotional

Ira has applied for similar jobs at three different companies, He spend hours developing his resume and cover letter. he had many knowledgeable people read his resume and make suggestions for improvement. he made sure his resume reflected his current skills and experience in the best possible way. Ira thinks his resume is perfect. What mistake did Ira make when he sent his resume to the three companies?

B. Ira did not tailor his resume to each individual employer

A _________ sheet allows easy comparison of income and what is spent.

Budget

Tax preparation software:

C

Robert paid $18,000 for a well maintained red toyota camry convertible a few years ago. From the time he bought the car to today the rate of inflation was 3.45% he had waited until today to buy the exact same car at the exact same price it would cost him $23,611 in todays dollars. how long ago did Robert buy his car

C 8 years ago

One way to save money is to:

C Buy store brands of food instead of name brands

The five C's of credit are:

C Character, capital, conditions, capacity, collateral

One of the easiest categories to find extra money in someone's budget that they can control is:

C Dining out

Robert is renting his first apartment he did a ver good job of determining what he could afford by looking at his budget and finding an apartment close to where he works. He completed a walk-through with the landlord and reviewed the entire lease for completeness and reasonableness. He spent the last weekend moving in and hanging pictures on the walls. What final step has Robert neglected?

C Robert has neglected to purchase renters insurance

A car is basically

C a box of miles

Good financial goals should be general and make sense for everyone

False

Most audits:

D

Robert stuffed all of his savings dollars into his mattress 15 years ago. He put $8500 into his bedding because he did not trust any savings or investment accounts. Average inflation for the past 15 years was 3.25% How much money does Robert need in his mattress today to have the same purchasing power that he had 15 years ago

D 13,733

Creditors and collection agencies are not allowed to make outrageous threats, call neighbors or family, and cannot harass by telephone or in person if the borrower _________

D Sends a certified letter stating such

your FICO score is:

D The most commonly used credit score

When negotiating with lenders and collection agencies people should

D always get everything in writing, otherwise the deal does not exist

_______ are some of the most dangerous and expensive loans around.

E Payday loans

Just because an item is __________ does not mean it is the best deal

E on sale

A career _________ speech is a 20-30 second summary of who someone is and what they are looking to do

Elevator

Although there are many different kinds of time value of money questions, there are only two types of time value of money problems that are important for most people to understand

False

Debit cards provide more protection from fraud and poor business practices than cash.

False

Dining out is done with pre-tax dollars

False

Good communication is about only the ability to write well or to deliver a good presentation

False

Financial goals include short-term, mid range and ______ goals.

Long-term

________ management is a long-range, organized, systematic, planned strategy to protect assets, families, and individuals

Risk

every reputable lender looks at a borrowers credit report and credit _________

Score

_______ is an interview tactic designed to get the interviewee to reveal much more about themselves than they ever intended

Silence

______ financial goals avoid general terms such as "I plan to retire a millionaire."

Specific

The present value of an ___________ allows easy calculation of what a series of regular payments to be received int he future in worth today

annuity

Most homeowners must _________ money or obtain a mortgage to buy their homes

borrow

Discount warehouses can save you a lot of money if you're careful, but not all ________ are a good deal

bulk items

The biggest disadvantage is they are simply more ________ than cash

convenient

Although a resume is the tool that helps secure an interview, a well written ________ provides the incentive for a potential employer to read the resume

cover letter

Debt carries with it an _________ to make those future payments.

obligation

People work in a ________ world, but live and play in a post tax world

pre-tax

you may request that the collection agent provide _______ that you owe the debt.

proof

Many people early in their career are usually better served by _________ their home so they can remain flexible enough to take a new job in another city or state

renting

Your brain has been trained to _______

spend

Because the fed government takes a significant portion of earned income, the key to spending wisely is to understand the _________ effect on decision making when spending money

tax