PFS Final
Which of the following investors would mostly prefer income investments over growth investments?
An unemployed, single parent who just received a $300,000 divorce settlement
The APR if the percentage cost of credit on a ______ basis
Annual
A proverb that we can associate with diversifying our investments is...
Dont put all of your eggs in one basket
A budget is a record of how a person or family has spent their money. T/F
False
An example of a variable expense is...
Electric Bill
Because of interest that can be earned, if I can invest a dollar a day, it should be worth________ in the future
More
An example of a fixed expense is...
Mortgage
X
Net Export Position
The amount you would have if everything of value would be sold and all debts would be paid in full.
Net worth
Which of the following is NOT a valid reason for borrowing?
Paying for everyday living expenses
Personal property insurance covers...
Personal property items up to 55-75 percent of the insured value of the home
A budget that involves envelopes, folders or containers to hold money or slips of paper is called...
Physical Budget
What is the fee that a policyholder pays when an insurance company agrees to take on the risk?
Premium
____________ will cause the Production Possibilities Curve to shift outward
Producing more capital goods
The uncertainty associated with decision making is referred to as...
Risk
Base of Pyramid
Savings & Investments
In order to provide more of everything in the future the Production Possibilities Curve must...
Shift outward
An insurance program...
Should change along with the needs and goals & should minimize personal property and liability risks
If Brenda wants to pay her fair share of taxes, no more no less, she should practice...
Tax Avoidance
The consumer price index reflects...
The change in prices of products and services of urban consumers
Which of the following sources would be the LEAST helpful when purchasing a vehicle?
Your cousin who has never purchased a car
When interest rates go down we are ________ likely to borrow money, buy a new car, TV, house, etc.
more
Taking off the production of one type of good for another illustrates the idea of.....
opportunity cost
C
Consumer Spending
A credit cardholder who pays off his balances in full each month is known as...
Convenience User
Middle of Pyramid
C+X
The Eisenhower administration used tax dollars to begin construction of the Interstate highway system in the 1950s, and the Kennedy administration diverted tax dollars from consumer spending in order to fund the space program. What do we consider these investments to be?
Capital Goods that will grow the economy
The question "will you repay the loan?" relates to...
Character
The use of property or savings to secure a loan relates to...
Collateral
The sooner a person is likely to die, the lower the premiums he or she will pay. T/F
False
Which of the the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life?
Fixed Annuity
The rising of prices that causes changes in buying power is referred to as ______ risk.
inflation
A __________ is an employer-sponsored retirement account.
401k account
If Diane was in a 28% tax bracket and received a $2,000 tax credit, how much would her taxes be reduced?
$2,000
Patrick Guitman has a net worth of $156,000 and liabilities of $167,000 What are his total assets?
$323,000
The maximum that an individual can contribute to a Roth IRA each year is...
$5,000
Annual earnings on a $2,000 Certificate of Deposit earning 3.15% would be...
$63
If a $10,000 investment earns a 9% annual return, what should its value be after one year?
10,900
The number of personal financial records a household has to organize may seem overwhelming. How long should you keep copies of your tax returns?
7 years
Inflation risk deals with...
A reduction in buying power
Failure to repay a loan may lead to all except....
Bankruptcy Loss of Income Damage to family relationships Loss of a good reputation ( All of the above)
Which of the following statements is correct?
Bonds are a form of debt financing
Continuing government spending by increasing the national debt will...
Boost GDP in the short term Help politicians to get re-elected Result in future economic misery (All of the above)
Who is most likely to benefit from inflation?
Borrowers
Disability income insurance plans offer benefits...
For only a few years Until age 65 For life (All of the above are possibilities)
Which of the following should reduce your auto insurance premium?
Get good grades in college
G
Government Spending
Top of Pyramid
Government Spending
GDP
Gross Domestic Product
I
Investment & Savings
All of the following are appropriate questions you could ask before making a major purchase..
Is it possible to delay the purchase or to do without the item? Should I pay for the item with cash or buy it on credit? Which brands should I consider? How do the price, quality, and service compare at different stores?
_____________ economic thought suggests that when the economy is prosperous, taxes should be raised and fiscal policy should manage the federal budget into a surplus, but when the economy is in recession, policy makers should cut taxes and run a federal budget deficit
Keynesian
A drawback of a savings account is...
Low rate of return
Which of the following is not a factor that affects the price a company charges for a life insurance policy?
The company's cost of doing business The return on investments The mortality rate it expects among its policy holders The policy features (All of the above)
Which of the following is TRUE about long-term care insurance?
The older you are when you enroll, the higher the annual premium
After the budget is created, it is important to...
Track spending and identify variances
A deductible is the amount you must pay before benefits become payable by the insurance company. T/F
True
Financial advisers suggest that an emergency fund should cover 3-6 months of living expenses T/F
True
For many people, the easiest way to begin an investment program is to participate in an employer-sponsored 401-k or 403b retirement account. T/F
True
Inflation reduces the buying power of money T/F
True
Opportunity costs refer to time, money, and other resources that are given up when a decision is made. T/F
True
A tax imposed on the value of a person's property at the time of death is called an...
Estate Tax
During the grace period, finance charges are assessed at only half the normal rate. T/F
False
Federal income tax returns must be filed by April 1 of each year
False
If your taxes due are greater than the amount you had withheld for the year, then you should expect a refund after you complete your referral income taxes. T/F
False
One of the first steps in a car purchase negotiation should be a discussion of the trade-in vehicle. T/F
False
Rental insurance isnt very important since the landlord's insurance on the building includes coverage on all the tenant's belongings. T/F
False
Jacob is concerned that his out-of-pocket health care expenses will be quite high, so he is considering adding contributions to a tax-free account that he can use with his high-deductible policy to cover catastrophic expenses. What kind of plan does he have?
HSA
This tax is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels.
Income Tax
Cindy was contacted by her home insurance agent to discuss ways to decrease her premium. Which of the following should NOT reduce her premium?
Increasing the amount of coverage
Which of the following is a disadvantage of renting?
Tenants cannot take tax deductions for mortgage interest and property taxes
Another name for temporary life insurance is...
Term
The IRS has made online filing free for millions of taxpayers through the Free File Alliance T/F
True
The least expensive loans are often provided by parents or other family members. T/F
True
The longer the term for a loan at a given interest rate, the higher the overall interest charges. T/F
True
When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years. T/F
True
At the end of the year, employees receive a ._________ form that reports annual earnings and the amounts deducted for taxes from their employer.
W-2
If you want to purchase term insurance, you will receive all of the following except...
Cash Value
Safe Investments include all except the following:
Commodities
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it easier for consumers to file Chapter 7 bankruptcy. T/F
False
