PERSONAL FINANCE A

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PERSONAL FINANCE A

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1) Purchasing cable, telephone, and Internet service from one company is an example of:

1 point

A) budgeting

B) economizing

C) double dipping

D) bundling

Clear selection

2) One advantage of home ownership is:

1 point

A) minimal maintenance responsibilities

B) mobility

C) limited parking space

D) the tax shelter

Clear selection

3) Which of the following is a major factor in helping you achieve your financial goals?

1 point

A) your values

B) your ability to balance work and personal life

C) the amount of overtime you work

D) your career choice

Clear selection

4) ___ is the value of your next best choice that you are giving up.

1 point

A) Personal preference

B) Opportunity cost

C) Tradeoff

D) Collective value

Clear selection

5) The American airline industry is an example of:

1 point

A) an oligopoly

B) an oligarchy

C) pure competition

D) a monopoly

Clear selection

6) Entrepreneurship is the process of:

1 point

A) starting, organizing, managing, and assuming the responsibility for a business

B) making a lot of money from a small investment

C) developing an idea for a new product that is not eligible for a patent

D) having more than one person involved in the operation of a business

Clear selection

7) Which one of the following was created to enforce laws that protect our environment?

1 point

A) IRS

B) CPSC

C) FTC

D) EPA

Clear selection

8) When interest rates are high, the average consumer will

1 point

A) save less.

B) buy less.

C) not change spending patterns.

D) buy nothing at all.

Clear selection

9) The principles and standards by which you live and make decisions are considered your:

1 point

A) wants

B) values

C) goals

D) needs

Clear selection

10) Of the following, which is usually considered a long-term financial strategy?

1 point

A) creating a budget

B) using savings to pay off loan early

C) purchasing auto insurance to cover needs of dependents

D) investing in a growth mutual fund to accumulate retirement funds

Clear selection

11) Overtime hourly pay for an individual earning $10 per hour would be $______ per hour according to the Fair Labor Standards Act.

1 point

A) 15

B) 12

C) 14

D) 20

Clear selection

12) _____ is not a deduction from gross pay.

1 point

A) Federal income tax

B) Overtime pay

C) Medicare

D) Social security

Clear selection

13) If you are a salaried worker:

1 point

A) your gross pay is the same as your salary

B) you will probably be paid twice per year

C) no deductions will be taken from your paycheck

D) your overtime pay rate is higher than that of an hourly worker

Clear selection

14) An adjustment to the tax withheld from your paycheck, based on your marital status and whether you have dependents, is

1 point

A) adjusted gross income.

B) allowance.

C) exemption.

D) dependent benefit.

Clear selection

15) A deduction from adjusted gross income for yourself, your spouse, and qualified dependents is called:

1 point

A) a tax credit

B) an itemized deduction

C) an exclusion

D) an exemption

Clear selection

16) A statement of an employee's prior year's earnings, sent to the employee by the employer, is called a:

1 point

A) Form 1040EZ

B) Form 1040

C) Form W-9

D) Form W-2

Clear selection

17) The federal agency that collects income taxes is:

1 point

A) Federal Bureau of Taxation

B) Collector’s Office

C) Internal Revenue Service

D) Federal Trade Commission

Clear selection

18) This federal law prohibits job discrimination based on race, color, religion, gender, and national origin.

1 point

A) Age Discrimination Act of 1967

B) Americans with Disabilities Act of 1992

C) Civil Rights Act of 1964

D) Fair Hiring Act of 1983

Clear selection

19) If your work on the job is of such quality that the employer can sell it or use it to favorably represent the company, it is said to be:

1 point

A) employable

B) marketable

C) marginal

D) accessible

Clear selection

20) Which type of communication takes place among employees?

1 point

A) vertical

B) downward

C) horizontal

D) upward

Clear selection

21) In a ____ plan, employees receive their regular compensation plus a portion of the company's earnings.

1 point

A) cafeteria

B) straight salary

C) stock options

D) profit sharing

Clear selection

22) Gross income is the amount of income from wages or salary

1 point

A) before payroll deductions.

B) that the person can actually spend.

C) after payroll deductions.

D) before bonuses are added in.

Clear selection

23) What are the two taxes that make up FICA (Federal Insurance Contributions Act) to fund retirement and disability benefits?

1 point

A) sales tax and excise tax

B) state income tax and federal income tax

C) state income tax and Social Security tax

D) Social Security tax and Medicare tax

Clear selection

24) A fee collected from most employees to support a federal program that provides old-age, survivors, and disability insurance is commonly referred to as

1 point

A) Social Security tax.

B) federal insurance corporation fee.

C) employees' health insurance.

D) Medicaid.

Clear selection

25) In the United States, the power to impose federal taxes rests with:

1 point

A) the Department of the Treasury

B) the Internal Revenue Service

C) the Congress

D) the President

Clear selection

26) Rent, car payments, and trash service are all examples of

1 point

A) disposable income.

B) variable expenses.

C) fixed expenses.

D) personal records.

Clear selection

27) The 1040EZ can be used by individuals with no dependents who earn less than $____ per year.

1 point

A) 100,000

B) 250,000

C) 50,000

D) 500,000

Clear selection

28) An interest rate that includes compounding is

1 point

A) annual percentage yield.

B) annual percentage rate.

C) long-term rate.

D) short-term-rate.

Clear selection

29) A budget provides

1 point

A) detailed plans for the financial needs of individuals, families, and businesses.

B) a form for recording expenses for income tax reporting purposes.

C) strict guidelines that cannot be changed so that individuals will not overspend.

D) a way to invest money so that it doubles in value.

Clear selection

30) What form does the federal government use to calculate your tax deductions?

1 point

A) Form W-2

B) Form W-4

C) Form 1040EZ

D) Form 1040

Clear selection

31) Many people utilize technology in planning budgets. Which software program would be an example of a suitable budgeting spreadsheet program?

1 point

A) Microsoft Excel

B) Lotus Notes

C) Microsoft Access

D) Adobe Acrobat

Clear selection

32) Which one of the following defines a budget?

1 point

A) a plan to match spending with saving

B) something that will decrease your wants and needs

C) a plan to increase income

D) a plan to match expected income with expected outflow

Clear selection

33) Which one of the following would be considered a fixed expense?

1 point

A) entertainment

B) clothing

C) gasoline

D) rent

Clear selection

34) ___ includes regular pay plus overtime wages earned during the pay period.

1 point

A) Gross pay

B) Discretionary income

C) Net pay

D) Disposable income

Clear selection

35) The difference between cash price and total price when installment payments are made is called:

1 point

A) full disclosure

B) discount interest

C) cost of credit

D) add-on interest

Clear selection

36) An agreement that is missing an essential element, such as consideration, is

1 point

Option 1

A) void.

B) illegal.

C) verifiable.

D) valid.

Clear selection

37) If you die without a will, the amount of money your spouse receives will be determined by:

1 point

A) the laws of your state

B) an appellate court

C) a lottery

D) the federal government

Clear selection

38) The goal of ____ is the careful management of investment alternatives to maximize growth of a financial portfolio.

1 point

A) systematic investing

B) strategic investing

C) speculative investing

D) initial investing

Clear selection

39) A prolonged period of rising stock prices is referred to as:

1 point

A) defensive market

B) bear market

C) stagnant market

D) bull market

Clear selection

40) Current yield is:

1 point

A) a corporation's net earnings divided by the number of outstanding shares of common stock

B) the annual dividend of an investment divided by the current market value

C) the price of one share of stock divided by the corporation's earnings per share

D) the annual dividend

Clear selection

41) What is rate of return?

1 point

A) the interest rate as stated on the certificate of deposit

B) how long it will take a note to mature

C) the length of time before the holder of a loan can collect the loan

D) how fast money grows in a savings or investment account

Clear selection

42) Those things that one wants to accomplish are called:

1 point

A) financial needs

B) financial values

C) financial wants

D) financial goals

Clear selection

43) The Rule of 72 is used to:

1 point

A) calculate the effect of compounding interest

B) describe a budgeting schematic

C) explain the effects of interest rates on mortgages

D) define a life insurance policy terms

Clear selection

44) The time value of money can best be explained using which of the following finance concepts?

1 point

A) the "pay yourself first" concept

B) the dynamics of compounding

C) the risk-to-return relationship concept

D) the Rule of 72

Clear selection

45) A person has a coffee habit of spending $4 a day. If a 7 percent return can be earned, the cost of this coffee habit over a 50 year period would be:

1 point

A) nothing

B) $1,460

C) $73,000

D) $146,000

Clear selection

46) Which one of the following is not a long-term need?

1 point

A) child's college education

B) investment plans

C) home ownership

D) new car

Clear selection

47) A budget deficit would result when:

1 point

A) actual expenses are less than planned expenses

B) net worth decreases

C) actual expenses are greater than planned expenses

D) assets exceed liabilities

Clear selection

48) The use of long-term savings to earn a financial reward is called:

1 point

A) speculating

B) diversifying

C) gambling

D) investing

Clear selection

49) Carefully managing your investments in order to maximize your portfolio is called:

1 point

A) systematic investing

B) beginning investing

C) speculative investing

D) strategic investing

Clear selection

50) Legally established ownership of property is a:

1 point

A) tenancy agreement

B) lien

C) deed

D) title

Clear selection

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