Tag: Personal Finance

1.Preferred stock is often referred to as a middle investment as it has features similar to both common stock and corporate bonds. Answer:TRUE2.The United States has the lowest per capita medical expenditures of any industrialized country in the world. Answer:FALSE3.Even […]

1.It is vital to engage in basic retirement planning activities throughout your working years. Answer:TRUE 2.Today, federal, state, and local governments and most corporations have a home page where you can obtain valuable information. Answer:TRUE 3.A screening interview is reserved […]

1.Government supported employment services can assist individuals with finding a job. Answer:TRUE2.Generally, the cost of writing a will is more than that for writing a living trust. Answer:FALSE3.Industrial life insurance is the most popular form of insurance today. Answer:FALSE4.Staying in […]

1.A tax credit is an amount subtracted directly from the amount of taxes owed. Answer:TRUE2.The incontestability clause stipulates that the insurance company can dispute the validity of the policy anytime during the insured’s lifetime. Answer:FALSE3.Saving now for the future requires […]

1.The most basic method of calculating interest is the compound interest calculation. Answer:FALSE2.The most common type of permanent life insurance is the whole life policy. Answer:TRUE3.The Fair Credit Billing Act sets the procedures for promptly correcting billing errors. Answer:TRUE4.Representation by […]

1.A disclaimer trust is designed for the couple who don’t yet have enough assets to need a credit-shelter trust. Answer:TRUE2.If creditors give you no credit for payments made during the billing period, it is called the adjusted balance method. Answer:FALSE3.Bond […]

1.Developing financial goals is the first step in the financial planning process. Answer:FALSE 2.Most people are more likely to lose their income due to death than due to disability. Answer:FALSE 3.If you have no dependents and your wife earns as […]

1.The exact amount of money you will need in retirement can be predicted accurately. Answer:FALSE[/cpmembership]2.The annual percentage rate is the percentage cost of credit on a yearly basis. Answer:TRUE3.Estate planning is not an essential part of retirement planning. Answer:FALSE[/cpmembership]4.Time value […]

1.Preferred Provider Organizations combine the best elements of the fee-for-service and HMO systems. Answer:TRUE2.An investment company sponsoring a mutual fund must furnish shareholders a prospectus each year. Answer:FALSE[/cpmembership]3.Anyone overburdened by credit obligations can phone, write, or visit a Consumer Credit […]

1.The P/E ratio is the price of a share of stock divided by the corporation’s earnings per share. Answer:TRUE2.The purpose of a cover letter is to determine if a company has jobs available. Answer:FALSE3.Take-home pay is a person’s earnings after […]

1.Because Medicaid coverage is very limited, people using it need to purchase supplemental insurance. Answer:FALSE2.Surgical expense insurance pays part or all of the surgeon’s fees for an operation. Answer:TRUE3.Housing will continue to be a not-so-liquid investment that promises steady returns […]

1.A lease protects the rights of both the tenant and the landlord. Answer:TRUE2.One of the misconceptions about retirement is that your expenses will drop when you retire. Answer:TRUE3.In a newspaper quotation, NAV stands for “not accessible value.” Answer:FALSE4.The debt-to-equity ratio […]

1.Credit unions frequently offer lower loan rates than other financial institutions. Answer:TRUE2.A closed-end fund is a fund in which shares are issued only when the fund is organized. Answer:TRUE3.Credit when effectively used, can help you have more and enjoy more. […]

1.An emergency fund is an amount of money that can be obtained quickly in case of immediate need. Answer:TRUE2.A registered bond is a bond whose ownership is registered in the owner’s name by the issuing company. Answer:TRUE3.Demand deposits are another […]

1.Homeowner’s insurance refers to coverage also available to condominium owners. Answer:TRUE2.A balloon mortgage can help a homebuyer when interest rates are high but are expected to come down in the near future. Answer:TRUE3.Open dating information provides consumers with information about […]

1.Financial records that are referred to on a regular basis should be kept in a safe-deposit box. Answer:FALSE2.Collectibles may be difficult to sell at the right price on short notice. Answer:TRUE3.A REIT must invest all of its assets in real […]

1.You gain entry to a shopping center investment by investing as little as $5,000 in a limited partnership. Answer:TRUE2.Under the life income option, payments are made to the beneficiary for as long as he or she lives. Answer:TRUE3.The tax shelter […]

1.College students are not a prime target for credit card issuers. Answer:FALSE2.Under a 401(k) plan, you can elect to have your employer make nontaxable contributions to the plan for your benefit and reduce your salary by an offsetting amount. Answer:TRUE3.You […]

1.Planning to buy a house is an example of an intangible goal. Answer:FALSE2.A coinsurance provision requires the policyholder to share the expenses beyond the deductible amount. Answer:TRUE3.A market order is a request that a stock be purchased or sold at […]

1.Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals. Answer:TRUE2.You can depend on your employer’s health insurance plan and Medicare to pay all your medical expenses when you retire. Answer:FALSE3.Increased technology can […]

1.More people have hospital insurance than any other kind of health insurance. Answer:TRUE2.Keogh plans can be both defined-contribution and defined-benefit plans. Answer:TRUE3.Probate is a legal procedure of proving a valid or invalid will. Answer:TRUE4.A REIT is a firm that pools […]

1.To purchase shares in an open-end fund, you may use four options: regular accounts, voluntary savings plans, contractual savings plans, and reinvestment plans. Answer:TRUE2.You can avoid storage and assaying problems by investing in gold bullion coins. Answer:TRUE3.Under the waiver of […]

1.Advertising is a type of consumer information commonly provided by business organizations. Answer:TRUE2.Once a person is eligible, Medicaid provides more benefits than does Medicare. Answer:TRUE3.A simple will is sufficient for most smaller estates. Answer:TRUE4.Most life insurance companies are mutuals. Answer:FALSE5.The […]

1.Generally, the current value of your jewelry is not included in your assets. Answer:FALSE2.Gold bullion poses storage problems. Answer:TRUE3.Overindulgence of children is a signal of potential debt problems. Answer:TRUE4.Although mutual funds are popular among individual investors, most people do not […]

1.Unmarried couples face formidable retirement and estate planning challenges. Answer:TRUE2.A mortgage bond is a corporate bond that is secured by various assets of the issuing firm. Answer:TRUE3.During retirement, you should increase your premium payments by increasing the face value of […]

1.Unlike stocks and bonds, precious metals sitting in vaults earn no income. Answer:TRUE2.Millions of nontraditional households have unique estate planning problems. Answer:TRUE3.High-yield bond funds are sometimes referred to as junk bond funds. Answer:TRUE4.The fees for investor services and newsletters usually […]

1.One important feature of a whole life policy is the nonforfeiture clause. Answer:TRUE2.A fixed annuity is a plan under which the monthly payments vary. Answer:FALSE3.The fund manager is ultimately responsible for a fund’s success. Answer:TRUE4.If overall interest rates in the […]

1.Inflation reduces the buying power of money. Answer:TRUE2.Profit-sharing plans or 401(k) plans are examples of defined-contribution plans. Answer:TRUE3.An investment bank is a financial institution that assists corporations with issuing new shares of stock. Answer:TRUE4.An escrow account is designed to reduce […]

1.A trust is a legal arrangement through which a trustee holds your assets for your benefit or that of your beneficiaries. Answer:TRUE2.The main advantage of the exemption trust will is that it eliminates future taxation of the exemption amount and […]

1.A general sales tax is also referred to as an excise tax. Answer:FALSE2.Perhaps the most popular form of marital trust is the Q-TIP trust. Answer:TRUE3.Money management activities refer to long-term investment decisions. Answer:FALSE4.Good disability plans pay when you are unable […]

1.When you purchase a variable life policy, the insurance company assumes the risk of poor investment performance. Answer:FALSE2.In the 5 Cs of credit, capacity refers to the borrower’s financial ability to meet credit obligations. Answer:TRUE3.With a fixed-dollar annuity, the money […]

1.Medicare does not cover the expenses of private-duty nursing care. Answer:TRUE2.The basic unit of gold bullion is one troy ounce. Answer:FALSE3.One reason for the high cost of health care is the use of sophisticated and expensive technologies. Answer:TRUE4.If you cosign […]

1.A budget is a specific plan of how a person or family will spend their money. Answer:TRUE2.Increased liability insurance is available with an umbrella policy. Answer:TRUE3.When you purchase precious stones, it is difficult to determine whether you are getting a […]

1.Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years. T-bills are issued in a minimum unit of $100 with additional increments of $100 above the minimum. Maturities are 4, 13, 26, […]

1.The least expensive loans are available from finance companies and retailers. Answer:FALSE2.The finance charge is the total dollar amount you pay to use credit. Answer:TRUE3.A class action suit allows many people with the same complaint to take action as a […]

1.Current interest rates can affect the price of a home. Answer:TRUE2.The fairest method of calculating interest is the adjusted balance method. Answer:FALSE3.The premium for a whole life policy remains constant for as long as an insured lives. Answer:TRUE4.A beneficiary is […]

1.Stocks issued by large corporations in mature industries often have high PE ratios. Answer:FALSE2.Since 1926, stocks as measured by the Standard & Poor’s 500 Index have returned on average about 10 percent a year. Answer:TRUE3.If you have convertible term insurance, […]

1.Very few members of the Medicaid population are also covered by Medicare. Answer:FALSE2.One of the advantages of a living trust is that property held in it avoids probate at your death. Answer:TRUE3.Last-minute “death-bed” estate planning may fail to carry out […]

1.A testamentary trust is a trust established by your will that becomes effective upon your death. Answer:TRUE2.A special form of the limited payment plan is the single-premium policy. In this type of contract, you make only one very large premium […]

1.A REIT may engage in speculative, short-term holding of real estate to sell for quick profits. Answer:FALSE2.A term insurance policy pays a benefit only if you die during the period that the policy covers. Answer:TRUE3.A call option gives the purchaser […]

1.Disability benefits begin on the first day you are disabled. Answer:FALSE2.A social factor that would influence a consumer’s buying decision would be the hobbies and interests they have. Answer:TRUE3.There are no costs involved in filing for a bankruptcy. Answer:FALSE4.A good […]

1.The Education IRA was renamed the Coverdell Education Savings Account. Answer:TRUE2.Risks associated with most financial decisions are fairly easy to measure. Answer:FALSE3.Because of the need for secrecy, most corporations do not supply financial information about the company on their Web […]

1.While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds. Answer:FALSE2.A guardian is a person or an institution that holds property for the benefit of someone else. Answer:FALSE3.An […]

1.Individual health insurance covers either one person or a family. Answer:TRUE2.Two basic types of life insurance are temporary and permanent insurance. Answer:TRUE3.Direct real estate investments include single-family dwellings, duplexes, apartments, land, and commercial property. Answer:TRUE4.Potential investors should not wait until […]

1.Liquidity is the ease with which an asset can be converted to cash without a substantial loss in dollar value. Answer:TRUE2.An estate tax is imposed on the value of an individual’s property at the time of his or her death. […]

1.Term insurance continues for the entire term even if you stop paying the premiums. Answer:FALSE2.During retirement, as long as you do not earn more than the annually exempt amount, your Social Security payments will not be affected. Answer:TRUE3.If a marriage […]

1.Typically, you must invest at least $15,000, to open a mutual fund account. Answer:FALSE2.Because an index fund is a mirror image of a specific index, the dollar value of a share in an index fund increases when the index increases. […]

1.The major reasons why investors purchase mutual funds are professional management and diversification. Answer:TRUE2.The purpose of an assigned risk pool is to assist people with poor driving records in obtaining automobile insurance coverage. Answer:TRUE3.Contributions to a SEP-IRA, which may vary […]

1.Most people cannot afford the expense of setting up trusts. Answer:FALSE2.Saving money doesn’t come naturally to many young people. Answer:TRUE3.The accuracy of credit reports has worsened recently. Answer:FALSE4.A formal will may be either typed or on a preprinted form. Answer:TRUE5.Increased […]

1.To boost demand for universal design homes, builders are marketing to families of all ages. Answer:TRUE2.You may not be denied credit because you receive Social Security or public assistance. Answer:TRUE3.Treasury bonds are issued in $5,000 units with 10-year maturities. T-bonds […]