Personal Finance Question Ch 1-7

given the information here what should jasons adjusted checkbook balance be a-$113 b-$172 c-$221 d-$242 e-$300

$221

Rebecca Wilson budgeted $1,200 for housing and utilities in July. She actually spent $1,160. What is her budget variance? a-$1,160 deficit b- $40 deficit c-$60 deficit d- $40 surplus e-$1,160 surplus

$40 Surplus

Gwen had three accounts as listed here. In 2014, how much was her total coverage by the FDIC? • Bank A: $250,000 • Bank B: $50,000 • Bank C: $300,000 $250,000 $300,000 $550,000 $600,000 $825,000

$550,000

Timothy Carter has net monthly income of $3,800. He has a monthly auto loan payment of $350, a student loan payment of $150, a mortgage payment of $1,200, and a credit card minimum payment of $45. What is his debt-payments-to-income ratio? 13.2% 14.3% 36.7% 42.0% 45.9%

14.3%

given the following information calculate the liquidity ratio liabilities= $25,000 liquid assets= $5,000 monthly credit payments=$800 monthly savings=$760 net worth=$75,000 current liabilities=$2,600 take home pay= $2,300 gross income=$3,500 monthly expenses=$2,050 a-0.16 b-0.41 c-2.44 d-2.50 e-6.25

2.44

Given the following information calculate the current ratio liquid assets= $5,000 monthly credit payments=$800 monthly savings=$760 net worth=$75,000 current liabilities=$2,000 take home pay= $2,300 gross income=$3,500 monthly expenses=$2,050 a-0.16 b-0.41 c-2.44 d-2.50 e-6.25

2.50

given the following information calculate the savings ratio liabilities= $25,000 liquid assets= $5,000 monthly credit payments=$800 monthly savings=$760 net worth=$75,000 current liabilities=$2,000 take home pay= $2,300 gross income=$3,500 monthly expenses=$2,050 a-33.79% b-3.06% c-2.40% d-34.78% e-21.71%

21.71%

Financial experts recommend monthly savings of ____ of gross income. a- 0% b-5-10% c-20% d-25-35% e- 50%

5-10%

What is the APY for a one-year $4,000 certificate of deposit with $280 interest? 5.8% 9% 8% 11.2% 7%

7%

Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, debtors seeking to ease all debts will have to wait __________ years.

8

If you have a $150,000 30-year 5% mortgage, how much of your first monthly payment of $805.50 would go toward principal? A. $180.50 B. $625.00 C. $665.28 D. $805.50 E. $7500.00

A. $180.50

Retirement planning includes thinking about your housing situation, recreational activities, and possible volunteer or part-time work. A. true B. false

A. True

Which of the following is organized as a corporation with investors (stockholders) contribution the needed capital to operate? A. a commercial bank B. a check-cashing outlet C. a pawnshop D. a payday loan facility E. a rent-to-own center

A. a commercial bank

Gross income less Adjustments to Income equals A. adjusted gross income B. earned income C. exclusions from income D. tax-deferred income E. tax-exempt income

A. adjusted gross income

The difference between the amount budgeted and the actual amount received or spent is called the: A. budget variance B. cash outflow C. income D. cash inflow E. variable expense

A. budget variance

Annie was required to clarify or document minor questions of her tax form by mail inquiry. She participated in a(n) A. correspondence audit B. office audit C. home audit D. field audit E. detailed audit

A. correspondence audit

Which of the following ratios shows the relationship between debt and net worth? A. debt ratio B. current ratio C. household ratio D. debt payments ratio E. savings ratio

A. debt ratio

A tax imposed on the value of a person's property at the time of death is called a(n) A. estate tax B. excise tax C. income tax D. real estate property tax E. sales tax

A. estate tax

Price analysis is part of the ________ phase of the research-based buying process. A. evaluating alternatives B. post-purchase activities C. pre-shopping activities D. selection and purchase E. ordering activities

A. evaluating alternatives

A leal document that includes information about the due date of monthly rent is called a A. lease B. lessee C. lessor D. rental statement E. sublease

A. lease

A credit file can include your spouse's name and Social Security number. A. true B. false

A. true

Lydia found a check that she was given for her birthday nine months earlier. Her bank should refuse the cash the check: A. true B. false

A. true

One method to see more money is to write a check each payday and deposit it in a separate savings account: A. true B. false

A. true

Open-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment. A. true B. false

A. true

Which of the following usually offers money market funds? A. a credit card company B. an investment company C. a life insurance company D. a finance company E. a payday loan company

B. an investment company

Steven needs to write a will. His best resource is (a) A. class action lawsuit B. attorney C. mediator D. arbitrator E. small claims court

B. attorney

A disadvantage of home ownership is the deductibility of mortgage interest and real estate tax payments. A. true B. false

B. false

A landlord has the right to sublet an apartment: A. true B. false

B. false

A lawyer is necessary when you appear in small claims court. A. true B. false

B. false

A trade-off of using credit is that it increases that amount of money that will be available to spend in the future. A. true B. false

B. false

An advantage of a second mortgage is that the interest rate subsidy from the home builder reduces the mortgage payments during the first few years of the loan. A. true B. false

B. false

FICO is a better score to use than VantageScore for consumers with limited credit histories: A. true B. false

B. false

If your tax payments are less than the amount of income tax you owe, you are entitled to a refund: A. true B. false

B. false

Liquid assets can be easily converted to cash and include money in checking accounts and personal possessions: A. true B. false

B. false

Many people use credit to live within their means. A. true B. false

B. false

One of the most frequent filing errors is signing the return: A. true B. false

B. false

The add-on interest calculation uses this formula: Interest = Principal x Rate of interest x Time. A. true B. false

B. false

The best place to find a qualified lawyer who will meet your specific needs is a phone book. A. true B. false

B. false

The financial activities for a young, single person will probably be the same as those for an older couple with no dependent children at home. A. true B. false

B. false

The two personal financial statements that you create yourself are the personal balance sheet and a credit card payoff statement. A. true B. false

B. false

Two years ago, Sean deposited money into a savings account and received a toaster as a free gift, which required him to leave his money on deposit for a year. The value of the toaster reduced the amount of interest he earned for the first year. A. true B. false

B. false

When creating a budget, it is important to save the amount you have let at the end of the month. A. true B. false

B. false

Which of the following is NOT a tax that most people pay? A. federal taxes on earnings B. federal taxes on possessions C. local taxes on property D. state taxes on purchases

B. federal taxes on possessions

Which of the following refers to the opportunity to withdraw your money on short notice without incurring a loss in value? A. compounding B. liquidity C. minimum deposit D. rate of return E. safety

B. liquidity

Justin needs to have access to his money in five months. The best option for his savings is a: A. series EE bond B. money market account C. five-year certificate of deposit D. series I bond E. six-month certificate of deposit

B. money market account

Properly maintaining and operating the product is part of the __________ phase of the research-based buying process. A. evaluating alternatives B. post-purchase activities C. pre-shopping activités D. selection and purchase E. more than one of these is correct

B. post-purchase activities

Most tenants sign a lease. Which of the following is part of a lease agreement? A. the amount of the down payment B. the conditions under which the landlord may enter the apartment C. the interest rate for a lease loan D. the name and address of the buyer E. the sale date

B. the conditions under which the landlord may enter the apartment

Tamra went to a restaurant and had an unpleasant experience that sent her to the hospital. The problems at the restaurant should be handled by: A. arbitration B. the county health department C. a lawsuit D. mediation E. the doctor who treated her

B. the county health department

Which of the following appears as a cash outflow on a cash flow statement? A. liquid assets B. variable expenses C. net worth D. personal possessions E. real estate assets

B. variable expenses

If a $10,000 investment earns a 7% annual return, what should its value be after 6 years? A. $10,000 B. $10,700 C. $15,010 D. $20,000 E. $15,001

C. $15,010

Harvey needed some cash quickly, so he received a short-term loan based on the value of an old ring. Where did he go? A. a commercial bank B. a check-cashing outlet C. a pawnshop D. a payday loan company E. a rent-to-own center

C. a pawnshop

Which of the following is NOT a strategy for wise buying? A. buying winter clothes on sale in mid- or late winter B. using product comparison websites for comparing brands C. buying items on impulse D. carefully considering buying alternatives at various purchase locations E. using unit pricing to compare products

C. buying items on impulse

If you want to file a complaint against a bank in connection with any of the consumer credit protection laws, you: A. must have a account at the bank B. must have at least $100,000 invested in the bank C. don't need to have an account at the bank

C. don't need to have an account at the bank

Opal is a real estate agent who represents the buyer as well as the seller. In some states, the buyers are required to sign a disclosure acknowledging that they are aware that Opal is working as a(n) A. appraisal B. contingency clause C. dual agent D. earnest money E. purchase agreement

C. dual agent

A savor or an investor should expect to receive a rise premium for: A. higher interest rates B. lower consumer prices C. higher uncertainty about getting his/her money back D. reduced credit ratings E. expected lower inflation

C. higher uncertainty about getting his/her money back

This tax is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels: A. estate tax B. excise tax C. income tax D. real estate property tax E. sales tax

C. income tax

A budget system that can be kept on notebook paper or accounting paper is called a A. mental budget B. physical budget C. written budget D. digital budget E. allocated budget

C. written budget

Crystal is looking for a new apartment. What are her total annual costs associated with renting? *Monthly rent payments - $1,000 *Annual renters' insurance - $250 *Annual interest lost on security deposit - $20 *Value of apartment - $150,000 A. $1270 B. $12000 C. $12250 D. $12270 E. $162270

D. $12270

Suppose you borrow $300 for one year and pay a finance charge of $20. If you repay this loan all at once after one year, what is your average balance? A. $20 B. $150 C. $160 D. $300 E. $320

D. $300

While evaluating alternatives, comparison shopping will be beneficial for buying: A. inexpensive items B. one-time purchases of low-cost products C. products whose prices are the same at all retailers D. Products whose quality is the same at all retailers E. Items that can be researched easily with advertisements

D. Products who quality is the same at all retailers

Adjustments to income include all of the following except: A. alimony payments B. contributions to a Keogh retirement plan C. traditional IRA contributions D. charity contributions E. penalties for early withdrawal of savings

D. charity contributions

to develop financial goals, one should: A. set several general goals fro the short-term B. only set long-term goals after short-term goals have been accomplished C. focus on intermediate goals first D. identify specific, realistic goals that are measurable along with a time frame and an action plan E. not worry about whether or not the goals can be achieved based on one's income and life situation

D. identify specific, realistic goals that are measurable along with a time frame and an action plan

When creating a budget, which of the following statements is true? A. include in income the bonuses and gifts you expect to receive B. it is easier to create a budget if your earnings vary by season C. common financial problems can be maximized through budgeting D. numbers in the budget are estimates E. it is better to overestimate your income for next year

D. numbers in the budget are estimates

Bob was married to Sandy, and they have a 12-year-old son. Sandy passed away last year. Bob needs to complete his federal income taxes for the year. What filing status could he use for 2 years after the death of his spouse? A. single B. married, filing a joint return C. head of household D. qualifying widow or widower E. married, but filing individually

D. qualifying widow or widower

Which of the following goals would be the easiest to implement and measure? A. put money into an investment fund B. reduce credit card debt C. save funds for an annual vacation D. save $100 a month to create a $2,400 emergency fund in 2 years E. spend less each month

D. save $100 a month to create a $2,400 emergency fund in 2 years

Margaret signed the back of her check with the words "pay to the order of Penelope." She used a(n) A. blank endorsement B. restrictive endorsement C. deposit ticket D. special endorsement E. individual account

D. special endorsement

which of the following is a document that transfers ownership of property from one party to another deed escrow mortgage PMI points

Deed

Tax assistance sources include all of the following except A. IRS publications B. IRS phone hotline C. the Ernst & Young Tax Guide D. the internet E. all of these are tax assistance sources

E. all of these are tax assistance sources

Which of the following questions is NOT needed before deciding how and when to make a major purchase? A. do I have the cash I need for the down payment? B. does the purchase fit my budget? C. could I postpone the purchase? D. could I use the credit I need for this purchase in some better way? E. all of these questions should be considered

E. all of these questions should be considered

Steve Wilson wants to deposit $150 per month into an account earning 4 percent for the next 3 years, so he can purchase a used car at that time. What type of computation would he use to determine the amount he will have for his purchase? A. present value of a single amount B. future value of a single amount C. simple interest D. present value of an annuity E. future value of an annuity

E. future value of an annuity

Which of the following long-term goals is stated most clearly using the SMART approach? A. buy a car for less than $15,000 within 6 months B. retire in 10 years at age 65 C. purchase a house with a mortgage no greater than $150,000 within 5 years D. set up an emergency fund E. invest $50 per month for the next 12 years for my nephew's college fund

E. invest $50 per month for the next 12 years for my nephew's college fund

The difficulty of Converting savings and investments to cash is referred to as ________________ risk. A. interest-rate B. inflation C. income D. personal E. liquidity

E. liquidity

Many american have money problems because of a- poor planning and weak money management habits b- too many clearly defined goals c- proper use of credit d-not enough advertising to make effective decisions d- controlled spending

Poor planning and weak money management habits

when creating a personal balance sheet which of the following is considered to be a personal possession asset a- a five year old television set b- a home c- cash in a checking account d-retirement accounts e-vacation property

a five year old television set

When Imogene brought a necklace to a _______, she received a loan based on its value. commercial bank a check cashing outlet a pawnshop a payday loan company a rent to own center

a pawnshop

harvey needed some cash quickly so he received a short term loan based on the value of an old ring. Where did he go? a commercial bank a check cashing outlet a pawnshop a payday loan company a rent to own center

a pawnshop

tax assistance sources include all of the following except A-IRS publications b-IRS phone hotline c- the ernst and young tax guide d- the internet e- all of these are tax assistance sources

all of these are tax assistance sources

which of the following is a valid reason for using credit purchasing a car so a homemaker can return to work borrowing for a college education purchasing an item that costs less now that it will later paying for a medical emergency all of these are valid reasons for borrowing

all of these are valid reasons for borrowing

which of the following usually offers money market funds a credit card company an investment company a life insurance company a finance company a payday loan company

an investment company

the question " what are your assets and net worth?" relates to character capacity capital collateral conditions

capital

When you select a financial services provider, you may find all of the following to be major factors except

company logo

When Jane researched the brands and prices of refrigerators, she was comparison shopping compulsive shopping impulse shopping trade off shopping warranty shopping

comparison shopping

future value computations are often referred to as a- discounting b- present value c-compounding d-simple interest e-an annuity

compounding

which of the following is a form of housing in which shareholders purchase stock to obtain the right to live in a unit of the building condominium cooperative housing manufactured home single family dwelling townhouse

cooperative housing

which of the following electronically subtracts money from your saving or checking account to pay for goods and services credit card closed end credit debit card gift card home equity loan

debit card

Which of the following will increase the net worth of a household a-decrease saving by $50 per month b-increase the amount borrowed for major purchases c- decrease spending by $5 per day d- invest in possessions whose values do not increase e- increase spending by $5 per day

decrease spending by $5 per day

when evaluating your credit application a lender may not ask your date of birth deny you credit if you receive public assistance request a list of the ages of you dependents inquire if you ever received credit before from that lender ask your marital status

deny you credit if you receive public assistance

____________ goals relate to infrequently purchased, expensive items A- short terms b- intangible purchase c- durable product d- consumable products e- intermediate

durable product

fees, tips, and bonuses are forms of a- passive income b- earned income c- exclusion from income d- tax deferred income e- tax exempt income

earned income

every decision involves uncertainty which is referred to as a- consequences of choices b- alternative courses of action c- financial goals d- personal goals e- evaluating risk

evaluating risk

Liquidity and rate of return refer to the same thing. true or false

false

a consumer applies for open end credit to make a single purchase such as a large appliance true or false

false

a financial plan can only be created using a money management software package true or false

false

a person with a taxable income of $40,000 and a total tax bill of $4,200 would have an average tax rate of 15% true or false

false

adjusted gross income is increased by the itemized or standard deductions true or false

false

an example of an excise tax is social security true or false

false

if your home is assessed for $200,000 the market value of the home should be less than $200,000 true or false

false

in selecting vehicle options an aesthetic feature of a vehicle is air conditioning true or false

false

inflation is most harmful to people with incomes expected to increases true or false

false

one method to spend more money is to deduct an amount automatically from your salary in a direct deposit system true or false

false

one of the first steps in a new car purchase negotiation should be a discussion of the trade in vehicle true or false

false

purchasing an appliance is an example of a consumable product goal true or false

false

the add on interest calculation uses this formula: interest=principal x rate of interest x time true or false

false

Tim Taylor received a $500 gift from his grandparents. He wants to invest this money for the down payment of a house that he plans to purchase in 3 years. What type of computation should he use? a- present value of a single amount b- future value of a single amount c- simple interest d- present value of annuity e- future value of annuity

future value of a single amount

When Paul completes his taxes, he can include all of the following as exemptions except a- his 12 year old son b-himself c- his 22 year old daughter who is a full time student d- his wife e- his 20 year old son who is working full time and living in an apartment

his 20 year old son who is working full time and living in an apartment

if you do not pay back any of the loan amount for a portion of the loan period you have a(n) FHA loan Buy down ARM home equity mortgage interest only morgage

interest only mortgage

The dealer's cost is also known as the Invoice price. Sticker price. Set price. Capitalized cost. Residual value.

invoice price

which of the following is correct about lemon law it applies when a vehicle has been out of service for 60 days it was enacted in 45 out of 50 states it requires a refund for the vehicle after the owner has made repeated attempts to obtain financing it applies to vehicles that have been serviced four times to correct the same problem in the first 12,000 miles it applies to both new and used vehicle purchases

it applies to vehicles that have been serviced four times to correct the same problem in the first 12,000 miles

a joint account with Sara and John allows only john to write checks only sara to write checks sara and john to complete a signature card john and sara to both write checks on the account all of these

john and sara to both write checks on the account

a legal document that includes information about the due date of monthly rent is called a lease lessee lessor rental statement sublease

lease

the tenant is the lease lessee lessor owner sublease

lessee

Diane purchased her house and had it assembled before it was moved to her lot. She purchased a condominium cooperative housing manufactured home single family dwelling townhouse

manufactured home

which of the following financial documents would most likely be stored in a safe deposit box or fireproof home safe a- W-2 forms b-personal financial statements c-warranties d-marriage certificates e-bank statements

marriage certificates

The lowest payment does not necessarily mean the best credit plan. If your car loan is a long period of time, you may end up owing more than the car is worth, which is called low monthly payments low interest loan negative equity loan preapprovals all of these are potential problems

negative equity

a workers primary goal should be to a- pay his or her taxes using estimates for income and deductionhis 20 year old son who is working full time and living in an apartments b- pay no income taxes c- pay the average tax rate for people working in his or her industry d-pay his or her fair share of taxes while taking advantage of appropriate tax benefits e-pay no taxes of any type

pay his or her fair share of taxes while taking advantage of appropriate tax benefits

resolution of any purchase concerns is part of the _______________ phase of the research based buying process evaluating alternatives post purchase activities preshopping activities selections and purchase ordering options

post purchase activities

a partial refund of the price of a product is called a coupon open dating rebate unit pricing warranty

rebate

Negotiation activities are part of the ____ phase of the research-based buying process. evaluating alternatives post purchase activities preshopping activities selections and purchase more than one of these is correct

selections and purchase

Making financial decisions related to income involves all of the following except A-spending b- saving c-sharing d-taking e- all of these financial decisions

taking

which of the following is not an action that can reduce your taxes a- owning a home b- taking out a consumer loan c- paying certain work expenses such as union dues d- depositing money into a flexible spending account FSA e- investing in municipal bonds

taking out a consumer loan

If Brenda wants to pay her fair share of taxes, no more and no less, she should practice a- tax evasion b- tax avoidance c- tax elimination d- tax maximization e-tax acceleration

tax avoidance

a line of credit is the equal payments required for one time loans the loan amount for installment cash credit the maximum loan amount for closed end credit the maximum dollar amount of credit the lender has made available to a borrower the monthly payment required for single lump sum credit

the maximum dollar amount of credit the lender has made available to a borrower

Kelly selected a home and submitted an offer to the seller. the seller must accept her offer her offer must have been for the asking price the sellers price is affected by kellys need to buy the seller may reject the offer and choose to provide a counteroffer kelly will receive earnest money when she presents the offer

the seller may reject the offer and choose to provide a counteroffer

according to the fair credit billing act of 1975 a consumer may tell a credit card company to stop payment for a defective good if the consumer has made a sincere attempt to resolve the problem with the store true or false

true

financial service activities through your smartphone or tablet include text banking, mobile web banking and banking apps true or false

true

if you think that rates will fall in the future you should buy a long term CD to lock in your rate now true or false

true

inflation is a rise in the general level of prices and it reduces the buying power of the dollar true or false

true

programs are available to help low income people around the world improve their money management skills or financial literacy true or false

true

the IRS has made online filing free for millions of tax payers through the free file alliance true or false

true

the settlement of a difference between two parties by an arbitrator is legally binding true or false

true

you can lend money to micro entrepreneurs through KIVA.org a micro lending website true or false

true

your lifestyle affects your housing decision true or false

true

which of the following is not correct alexs daily maintenance and timely repairs around his home should make it attractive to potential buyers brendas new hot tub will probably not increase the selling price when showing the home caryns suggestion to open drapes but keep lights turned off to conserve energy will give her property a positive image darryls decision to sell his house by owner could save him several thousands of dollars in commission erics listing with a real estate agent will provide him with services such as advice on features of his home to highlight

when showing the home caryns suggestion to open drapes but keep lights turned off to conserve energy will give her property a positive image