FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 25: Extension: Managing Personal Finances

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is the best advice about the use of credit cards?

A) Except for very small purchases, credit cards should always be used instead of cash.
B) The best approach to credit cards is never even to apply for one.
C) Credit cards are an important part of a personal financial system, but they should be used with care and discipline to avoid their high financial costs.
D) Credit cards are most useful when making large purchases (over $500) , because they allow you to spread out the payments so they fit in your budget.

E) A) and B)
F) C) and D)

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Bonnie and Clyde are newly married college graduates. Both have jobs with bright futures. One strategy that they could use to accumulate capital for investment purposes, would be to:

A) borrow heavily to buy a house.
B) use their credit cards to acquire assets while prices are relatively low.
C) live on just one of their incomes and save the other.
D) quit their jobs and go back to college for a graduate degree.

E) A) and B)
F) A) and C)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Many financial experts advise that you set up a contingency fund equal to about ________ of your earnings and keep these funds in highly liquid accounts.

In order to qualify as a tax shelter, IRA saving plans must be invested in mutual funds.

_________ is a form of life insurance that provides both a savings plan and pure insurance coverage.

Many insurance providers offer __________ policies that give a discount to families who buy several types of insurance coverage from them.

Which of the following is least likely to result from the problems facing the Social Security system?

When young people decide to buy a house, the best approach is to buy a house in an inexpensive part of town so they can get a larger house for less money.

A good manager of personal finances, like a good businessperson, uses borrowed funds whenever possible.

People who have health insurance seldom need disability insurance.

The benefit of opening an IRA while you're young is the compounding of the money invested tax-free over your working lifetime.

Keogh plans are intended to help small business owners save for retirement.

Once you have evaluated your current financial situation and know your sources of income and expenses, you have reached the point where you can establish a personal budget.

From a financial viewpoint, it is best to buy a:

One strategy used to lower car insurance premiums is to choose a policy with a large deductible.

Henri wants to get better control of his personal finances. He should begin by setting up a personal balance sheet and a personal income statement.

Accumulating money through savings allows you to participate in the growth of a capitalist society.

About 35% of U.S. households do not have a retirement account.

Don is young and newly married. He and his wife plan to have children in the near future and Don wants to get a significant amount of life insurance coverage at as low a cost as possible. He would be well advised to purchase a term insurance policy.

________ insurance provides protection from losses of furniture, appliances, and clothes.