Review Quiz 2

Potential impact, prevention plan, contingency plan, and risk are all things to consider when developing which of these? a defined benefits plan a cost-analysis plan a risk management plan all of the above

a risk management plan

Healthcare costs, inflationary rates, and housing are all things you should consider when planning for which event? retirement at what age you should stop working when you no longer have income from your employment all of the above

all of the above

Keeping a good budget and saving money are good examples of which of the following? wise financial planning good money management financial literacy all of the above

all of the above

Which of these are types of income? net taxable gross all of the above

all of the above

Which of these should you carry insurance coverage on? life automobile disability all of the above

all of the above

By which date are you required to file your tax returns each year? April 15 March 15 January 31 December 31

April 15

Sarah's gross pay is $5,000. She had $1,400 taken out of that amount; $1,050 is in taxes and $350 is for savings and retirement funds. Which number corresponds to the amount for deductions? $350 $1,400 $5,000 $1,050

$1,050

According to CBS News, what percentage of American employees feel engaged or inspired at their jobs? 100% 30% 70% 20%

30%

People with a bachelor's degree make how much more over a lifetime than high school graduates? 98% 84% 23% 45%

84%

Which of the following describes something that is a risk to you? Your direct ancestors suffer from heart disease. You drive a car. You rent an apartment. All of the above.

All of the above.

Which statement is true about taxes? An employee needs to complete a 1040EZ tax form so an employer knows how much money to deduct for taxes. An employee needs to fill out a W-4 form every year of work for that company. An employer needs to send out a W-2 form to each employee before January 31 of each year. All of these statements are true.

An employer needs to send out a W-2 form to each employee before January 31 of each year.

Which statement is false about mutual funds? Growth mutual funds involve start-up or newer companies that are less stable but have the possibility of making more money in the long run. Income mutual funds involve stable penny stocks for businesses that have just opened. Income mutual funds involve stable companies that are well established and secure. None of the above.

Income mutual funds involve stable penny stocks for businesses that have just opened.

Which of these is not a type of investment? Ponzi schemes real estate savings bonds growth funds

Ponzi schemes

Which amendment to the Constitution requires that you pay taxes? Sixteenth Amendment Ninth Amendment First Amendment Twenty-seventh Amendment

Sixteenth Amendment

Which statement is true about college students? Statistically, college graduates make more money than non-graduates. High school graduates usually make just as much as a college graduate. All of the above.

Statistically, college graduates make more money than non-graduates

Which statement best applies to life insurance? It is illegal not to carry a life insurance policy on yourself. All employers require you to take out a life insurance policy. The benefit on your policy should equal 7 to 10 times the amount of your annual salary. The benefit on your policy should be less than the amount of your annual salary.

The benefit on your policy should equal 7 to 10 times the amount of your annual salary.

Which statement is true of inflation? When inflation increases, interest rates on your credit cards, adjustable-rate mortgages, or car loans usually decrease. Inflation has no effect on interest rates. Inflation will allow homes to be sold at a lower price. When inflation increases, interest rates on your credit cards, adjustable-rate mortgages, or car loans usually increase.

When inflation increases, interest rates on your credit cards, adjustable-rate mortgages, or car loans usually increase.

When considering whether to invest in a particular company, which of the following is something you probably do not need to consider? Why did the owners go into this particular business? Who runs the company? What are the company's competitors? Does the company have a solid earnings history?

Why did the owners go into this particular business?

In which of the following situations does it make sense to purchase a lower coverage of health insurance? You have seven older siblings without any genetic illnesses. Your father died in a mine accident. Your neighbor has skin cancer. Your best friend has breast cancer.

You have seven older siblings without any genetic illnesses.

Which of the following is the correct term to describe an asset that you can quickly convert to cash? a fast asset a liquid asset a hard asset a loose asset

a liquid asset

Which group will not have to pay federal income taxes? elderly Americans whose taxable income is less than $30,000 a year any American who makes less than $40,000 a married couple filing jointly that makes less than $10,000 none of the above

a married couple filing jointly that makes less than $10,000

All states require that you carry some form of what type of insurance? automobile insurance flood insurance life insurance renters insurance

automobile insurance

Finish the following statement: "Wise consumers always try to compare the value of their cost to the value of their ________. decisions benefit want pocketbook

benefit

Which of the following is the best way to invest your money? by diversifying by liquidating all of the above none of the above

by diversifying

Miguel has information that his company is going to file for bankruptcy. He calls all of his relatives so that they can sell their shares of stock in the company before this happens. This is an example of which of the following? insider trading poor investing liquidity diversification

insider trading

We will all have concerns in our lives. Which term means "a safeguard that will lessen risk"? risk insurance calculation none of the above

insurance

Which of the following is the best definition of diversification? creating investments that you can give to other investors investing in several different companies so if one fails you still have investments in other companies investing in one company at a time in order to put all your money in one place none of the above

investing in several different companies so if one fails you still have investments in other companies

Pedro was in a car accident and his car was totaled. Although his car insurance company gives him money for the car, he needs another $2000 to purchase a new car. Pedro withdraws $2000 from his savings account so he can purchase the new car. This is an example of which of the following? certification valuation liquidation diversification

liquidation

Which of these is a low-risk investment? short-term investments long-term mutual funds a pyramid scheme that your uncle guarantees will make you money high-yield bonds

long-term mutual funds

Shanequa absolutely loves to play tennis. She wants her new husband to get involved in the sport she loves, so she has decided to buy them each a new racquet. They go to two sports stores to pick out some racquets. While at the stores, they narrow their choice down to two options. Option 1: The price for racquets at this store is $100 for both but they are on sale for 10% off. Option 2: This store has racquets identical to the ones at the first store. At this store they are $75 for the first racquet and 50% off for the second racquet. Which is the best option for Shanequa to choose? option 1 because they will save money not going back to the first store option 1 because each racquet will cost $45 option 2 because each racquet will cost $56.25 option 2 because each racquet will only cost $37.50

option 1 because each racquet will cost $45

Kim's father died of a heart attack when he was 45. Her mother was diagnosed with early onset Alzheimer's when she was 50. Her oldest sister lost her left leg from cancer two years ago. Based on Kim's family health history, which of the following best matches her risk of heart disease and cancer? risk of heart disease is low; risk of cancer is high risk of heart disease is high; risk of cancer is low risk of heart disease is high; risk of cancer is high risk of heart disease is low; risk of cancer is low

risk of heart disease is high; risk of cancer is high

Which statement is true of penny stocks? stocks that cost less money but will make money in the end if invested wisely stocks that have a high risk of losing money because the companies are brand new stocks that have a low risk of losing money if invested wisely stocks that usually cost more money but will make money in the end if invested wisely

stocks that have a high risk of losing money because the companies are brand new

Which of these is the best definition of "net income"? the amount earned before any taxes or deductions are taken out the amount after mandatory deductions are taken out the amount earned after any taxes and other deductions are taken out the amount earned after exemptions are taken out

the amount earned after any taxes and other deductions are taken out

Which of the following best describes the significance of this figure: "$15,000"? the amount Americans pay into savings accounts each year the average monthly income of Americans the total college students spend on tuition the average amount of debt Americans carry on their credit cards

the average amount of debt Americans carry on their credit cards

Which of the following is the definition of a regressive tax? the government charges the same amount of tax from each taxpayer, irrespective of income. everyone, regardless of income level, pays the same percentage for taxes. the more money you make, the more taxes you pay. none of the above

the government charges the same amount of tax from each taxpayer, irrespective of income.

Which of the following is the best reason for why Medicare was enacted? to create a savings fund from which employees receive medical insurance when they retire to create a fund to ensure that all American citizens will receive some savings when they retire to create a fund for employees' Social Security taxes that the employee will get back once retired all of the above

to create a savings fund from which employees receive medical insurance when they retire

Why do states require homeowners to pay property taxes? to increase property values to create revenue for housing projects to pay for schools, roads, snow removal, etc. to pay for parking spaces surrounding one's property

to pay for schools, roads, snow removal, etc.

Which term best matches this definition: "the opportunity to gain increased and more complex responsibilities resulting in a higher income"? accountability mobility upward mobility upward accountability

upward mobility

When developing a career plan, which of these is not an important consideration? social and economic conditions interests and personality type what others expect you to do all of the above

what others expect you to do

When developing a career plan, which of the following is not something you should necessarily consider? your driving record your previous experiences your likes and dislikes your skills and abilities

your driving record