1) A fundamental decision to make when buying life insurance is whether to purchase
term insurance or cash-value insurance.
2) Homeowners insurance can pay for additional expenses as well as for repairing or
replacing property.
3) Timesharing should be considered vacation plans rather than real estate investments.
4) Estimating taxes requires taxpayers to send quarterly installment payments to the
IRS.
5) Reducing the number of bank and credit accounts that each partner brings into the
marriage can save money on account fees.
6) A flexible spending account is an employer-sponsored account that allows
employee-paid expenses for medical or dependent care to be paid with employee’s
pretax dollars rather than after-tax income.
7) The application for life insurance becomes an actual part of the life insurance
policy/contract.
8) Specific financial goals drive the creation of budgets.
9) The face amount of a bond is the principal.
10) A person’s average tax rate is always lower than his or her marginal tax rate.
11) Lenders pay a fee for each credit report requested.
12) Employers usually offer employees retirement plans because the promise of a
secure retirement represents an effective way to recruit and keep valuable employees.
13) Money market mutual funds that buy only U.S. government securities are virtually
risk-free.
14) A tax credit of up to ____ is available for qualifying costs of an adoption.
a. $0
b. $1,000
c. $10,000
d. $13,360
15) Cindy Estrada is applying for a loan and the bank has asked her for some financial
information. Use the following data to calculate Cindy’s net worth.
a. $121,025
b. $129,725
c. $130,375
d. $131,025
16) Tax-exempt income is most valuable to low-income taxpayers.
17) A walkaway lease is also called an open-end lease.
18) Prices on “big ticket” items such as vehicles, furniture, appliances, and electronic
equipment are usually the same from seller to seller.
19) Low deductibles and coinsurance requirements and high policy limits can make
dental plans less beneficial than they might appear.
20) Credit cards allow repeated use of credit as long as equal monthly payments are
maintained over a set period of time.
21) In times of high inflation, personal incomes generally keep up with the rate of
inflation.
22) Interest accrued on a Series EE savings bond is tax-free at redemption if the
proceeds are used for the purchase of your first home.
23) Term insurance is more profitable for the life insurance companies and agents than
cash-value insurance.
24) You must make a billing error complaint within 60 days after the transaction has
posted.