1) Numerous employee benefits are not included in gross income.
2) The multiple-of-earnings approach consists of multiplying one’s income by some
factor to derive an estimate of the amount of life insurance needed.
3) Credit is a term used to describe any situation in which goods, services, or money is
received in exchange for a promise to repay at a future date.
4) A stock split is generally viewed by investors as an indicator that management
expects better profits in the years ahead.
5) Federal income tax on interest earned on a Series EE U.S. government savings bond
may be deferred until the bond is redeemed.
6) Cash contributions to qualified organizations, such as churches, schools, and other
qualifying charities, require a receipt for a contribution of $250 or more.
7) In making a common stock investment, the investor becomes an owner of the assets
and earnings of a business corporation.
8) Capitalized cost reductions are monies paid on the lease at its inception, including
any down payment, trade-in value, or rebate.
9) Stocks and bonds are the primary examples of negotiable instruments of ownership
or debt.
10) Emerging market funds are volatile because the countries the stocks are in tend to
be less stable politically.
11) The cost of credit on a yearly basis as a percentage rate is called the APR.
12) Wise users of credit have a no-annual-fee card for convenience purchases and a
low-APR card for purchases where they carry a balance.
13) The need for life insurance is usually low during retirement.
14) Supplemental health insurance plans such as dread disease and accident insurance
are typically highly overpriced and provide benefits much less generous than implied in
sales promotions.
15) Dividend reinvestment plans are appropriate for investors who do not currently
need dividend income.
16) An active investor could be described as a long-term investor who makes regular
investments in securities, such as mutual funds, and his or her assets are rarely sold for
short-term profits.
17) It is easier to achieve diversification by investing in individual stocks and bonds
rather than mutual funds.
18) Common stock and bond investments are suitable for only speculative investors.
19) Business-cycle and market-volatility risks are essentially the same..
20) A good investment program replaces one’s savings program.
21) The typical growth fund seeks short-term capital appreciation.