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Per Finc

PF Final Exam with Moneyskills

The standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group. True
The cost of raising a child from birth to age 18 is now more than $300,000. True
A good financial plan completed when one is in their 30s will typically last a lifetime. False
Financial planning is a continuing, life-long process. True
Financial planning can improve your standard of living. True
Your auto loan payments would be listed as a liability on the balance sheet. False
Only the current month's payment on your mortgage loans would be listed on the balance sheet as a liability. False
Inability to reach short-term goals will significantly affect your ability to reach long-term goals. True
As a single taxpayer with no dependents, one is generally eligible to file as "head of household." False
Kelly and Sam got married December 30. Since they were single for most of the year, they can legally file as single taxpayers in the year of the wedding. False
George and Maria were divorced September 29, have no remarried, and have no dependents. Their filing status for the year will each be "single". True
EFTS allow you to make payments that occur on a regular basis. True
Convenience and improved record keeping are two advantages sited for on-line bill payment. True
It is probably advisable to purchase life insurance from a company that has been in business for at least 25 years. True
One should be concerned about unethical sales practices when promises are made that premiums will vanish in 3 or 4 years. True
Life insurance cash value may be collected by terminating the policy True
Life insurance cash value may be borrowed from the insurer at a low interest rate if the policy owner can pass an easy credit check. False
Cash value is an important component of whole life, universal life, and variable life but is never a component of term insurance. True
Cash value will not be forfeited to the insurance company for non-payment of a premium, but will instead always accrue to the benefit of the policy owner. True
Life insurance premiums are generally tax deductible. False
A personal liability umbrella policy typically includes coverage for auto related liability losses in excess of the limits purchased in a personal auto policy. True
The personal liability umbrella policy typically includes coverage for liability losses that are in excess of the limits purchased in the comprehensive personal liability coverage provided in the homeowners' policy. True
The minimum limit for personal umbrella policies is generally $100,000. False
A captive agent represents one insurance company. True
One should never admit fault at the scene of an accident. True
Uninsured motorist coverage covers passengers in your car from losses caused by your negligence. False
Investing is considered a short term activity that involves the buying and selling of activities. False
Investing requires a fairly large sum such as $5,000 to get started? False
The over the counter market is NOT an organized security exchange. True
Low price/earning rations indicate limited or low investor confidence. True
A stocks Beta is an indication of its expected annual yield. False
An open-end investment company is commonly known as a mutual fund. True
The price an investor can sell his shares of an open-end mutual fund share is the net asset value. True
Reduced early retirement benefits can be received at age 62. True
The current trend in the retirement plans is towards contributory. True
Personal finance management is important because it... makes personal financial goals easier to achieve.
Financial planning can help us to... spend wisely.
The last step in the financial planning process is to... redefine goals and revise plans and strategies as personal circumstances change.
Over 75% of the revenue received by the federal government is from _______ and ________ taxes. income and Social Security.
The federal income tax is... flat rate.
If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90%, then the borrower must make... a minimum down payment of $10,000 plus closing costs.
If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 80%, then the borrower must make a down payment of at least... $20,000
If you made a down payment of $11,000 on a $110,000 house, the lender no doubt will require ________ as a result of the size of the down payment. mortgage insurance.
A professional basketball player severely injured his hamstring and can't play basketball for 9 months. Assuming he accumulated enough "quarters of coverage" for eligibility, how many months will he receive Social Security disability income insurance? 0
Most people do NOT need protection against... a specific dread disease
Which of the following programs is a public assistance program that provides health insurance benefits only to those who are unable to pay for healthcare? Medicaid
Which of the following best approximates the length of the average nursing home stay? 2.5 years
Joe has a disability income policy that pays a monthly benefit of $1,200. Joe has been disabled for 30 days, but he only received a check in the amount of $600 from his disability insurance. What is probably the reason that he only received $600? The elimination period is 15 days.
What is a reason for preferring to rent rather than to buy? Mobility, no maintenance worries, lower monthly cash flows, and down payment money better used elsewhere.
Generally, renting would be preferred to buying when... you have no money to make a down payment, you know your job will be temporary, or you have just gone through a divorce.
In order to find out all of the homes that are available for sale in a particular area you should consult... the Multiple Listing Service.
A real estate sales contract will include... the amount you are willing to pay for the property.
Earnest money is the sum of money the home buyer deposits with the... seller to indicate intent of purchase.
The most popular mortgage loan for financing a home purchase is a... conventional fixed-rate loan.
Interest rates will be lower on your (savings OR checking) accounts. Checking
Liquid assets would include your savings account and you (money market deposit account OR stock mutual fund). Money market deposit account
Today the differences between a commercial bank and an s&L are (minor OR major). Minor
Credit unions are more likely to be paying (much OR slightly) higher interest rates on their accounts than a commercial bank. Slightly
The avg number of vacation given annually to american workers who have just started a full time job. 2 weeks
Many young people recieve health ins through their parents, which of the following statements is true about health ins coverage if yout parents become unemployed, your ins coverage may stop, regardless of your age
Which of the following is true about sales taxes It make things more expensive for you to buy
If someone has money set aside for emergencies, which form would be least beneficial if they need it right away Invested in a down payment on a house
What is the primary income for most people 20-35? wages, salaries and tips
If you receive a refund on your federal income taxes, what does it mean? Too much withholding was taken the previous year
What is the advantage of a fixed rate mortgage over a variable rate mortgage? The interest can't rise
What is the safest investment for not losing money Certificate of deposit
Why do airlines tend to give you a much lower price when you book two weeks in advance and stay over on a saturday night They want to charge business travelers a higher price but also need to keep their seats full.
what is true about employer based Health ins? Employers are not required to offer health ind
When is the purchase of a washer and dryer not a good investment a laundry service that picks up and cleans your clothes is less expensive
Which savings program is not protected by the federal government for loss? Bond issued by one of the 50 states
If you caused an accident, which type of ins would cover damage to your car? Collision
Which of the following statements is NOT correct about most ATM Cards? You can get cash anywhere in the world with no fee.
Retirement income paid by a company is called Pension
Which of the following is true. Banks and other lenders share the credit history of their borrowers with each other and are likely to know of any loan payments that you have missed.
Which of the following best describes the primary source of income for most people age 20 to35 Salaries, wages, tips.
A friend gives you a check for money she owe you but the check is for a date that is two weeks in the future. What happens when you take the check to your ban to cash it? The Bank will tear it up because it is post dated and illegal.
If we receive a refund from our Federal Income tax, what does this mean? Too much withholding was taken from our pay the previous year.
Under which of the following circumstances would it be financially beneficial to you to borrow money to buy something now and repay it with future income. when you need to buy a car to bet a much better paying job.
If your credit is stolen and the thief runs up a total of $1,000, but you notify the issuer of the card as soon as you discover it.WHAT IS THE MAXIMUM AMOUNT THAT YOU CAN BE FORCE TO PAY ACCORDING TO FEDERAL LAW? $50.00
WHICH OF THE FOLLOWING CREDIT CARD USERS is likely to pay the GREATEST dollar amount in finance charges per year fi they all charge the same amount per year on their cards? The card holder that only pays the minimum amount each month!
John worked his way through college earning $15,000 per year. After Graduation his first job pays $30,000 per year. The total dollar amount John will have to pay in Federal Income Taxes in his new job will: double, at least, from when he was in college.
Inflation can cause difficulty in many wasps. Which group would have the greatest problem during periods of high inflation? Older people living on fixed income!
Which of the following statements best describes your right to check your credit history for accuracy your credit record can be checked once a year for free
If four people of the same age each had the same age each had the same education and skills, which would likely earn the greatest about of money The one who lives in an urban area in the West
What is the primary purpose of life insurance? To help maintain the standard of living of those who depend on our income
Adam must borrow $10,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate? If he went to a state college rather than a private college
If you had a savings account at a bank, which of the following would be correct concerning the intrest that you would earn on this account? income tax may be charged on the intrest if your income is high enough
If you are behind on your debt payments and go to a responsible credit counseling service such as the Consumer Credit Counseling Services, what help can they give you? they can work with those who loaned you money to set up a new payment schedule that you can meet
Your take home pay from your job is less than the total amount you can earn. Which of the following best describes what is taken out of your total pay? federal income tax, social security and Medicare contributions
Paula has saved $8,000 for her college expenses by working part-time. She plans to start college next year and needs all of the money she saved. Which of the following is the safest place for her college money? a bank savings account
Alice purchased a $1,000 bond with a maturity of 20 years. Since she bought it, the rate of intrest paid by other, similar bonds with the maturity of her bond have gone substantially. How much could Alice get for her bond if she sells it now, before it ma More than $1,000
Johanna's grandmother gives her $7,000 to pays for the entire first year's tuition at a state college, a year from now. Johanna puts the money into her checking account, but during the next year, inflation is 8% and the tuition of her college increases wi $560
Therese has only a basic "20/40" liability policy on her car. Her son borrowed it and had an accident where he and two passengers were injured. One passenger suffered $30,000 in damages and the other passenger and Therese's son each suffered $10,000 in da $30,000
If you find a car that you like and decide to lease it over 4 years instead of buying it over the same period, which of the following statements is true?
Heather has a good job on the production line of a factory in her home town. During the past year or two, the state in which Heather lives has been raising taxes on its businesses to the point where they are much higher than in neighboring states. What ef Heather's company may consider moving to a lower-tax state, threatening Heather's job
Ron and Molly are the same age. At age 25 Molly began saving $2,000 a year while Ron saved nothing. At age 50, Ron realized that he needed money for retirement and started saving $4,000 per year while Molly kept saving her $2,000. Now they are both 75 yea Molly, because her money has grown for a longer time at compound intrest
Which of the following instruments is NOT typically associated with spending certificate of Deposit
If each of the following persons had the same amount of take home pay, who would need the greatest amount of life insurance? a young single women with two young children
Which of the following types of investment would best protect the purchasing power of a family's savings in the event of a sudden increase in inflation? a house financed with a fixed rate mortgage
Andrew is offered an intrest rate of 14% from the car dealer where he is buying a car. Is that the same intrest rate the car dealer gets from the lender it is using? No, the car dealer will generally charge the car buyer a higher intrest rate to make a profit from the "spread"
Suppose you were selling an older computer you owned for $200 and a person you didnt know offered to write you a check for it. What would be the safest thing for you to do? Tell the buyer to cash the check at his bank and bring you cash
Joel and Matthew were college roomates who loved to fish. They decided to buy a bass fishing boat together and filled out a loan application as co-applicants. In the summer after their junior year, Joel dropped out of college, hitched the boat and trailer Matthew must pay the full $150 per month even though he no longer has the boat
Matthew and Alicia just had a baby. They received money as baby gifts and want to put it away for the baby's education. Which of the following is likely to have the highest growth over the next 18 years? Stocks
Ed and Bob are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Ed has borrowed $2,500 to buy a car. Bob has borrowed $2,500 to take a foreign vaction. Who is likely to pay the lowest finance Ed will pay less because the car is collateral for the loan
Courtney and Sibrina are employed by the same company and earn the same pay. Courtney spends her free time taking work related classes to improve her computer skills; while Sabrina spends her free time socializing with friends and working out at a fitness Courtney will make more money because she is more valuable to her company
Created by: j.walters