Question 1

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?​

Accepted Answer

A)   ​$1,120
B)   ​$5,400
C)   ​$1,512
D)   ​$1,316

Question 2

401(k),403(b)and 457 plans are example of tax-sheltered retirement plans offered by employers.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?​

Accepted Answer

A)   ​Start early to boost your retirement.
B)   ​Take advantage of your employer's "match."
C)   ​Making early withdrawals from a tax-sheltered retirement plan.
D)   ​Opening an HSA.

Question 4

Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future?​

Accepted Answer

A)   ​Prime rate
B)   ​Federal funds rate
C)   ​Discount rate
D)   ​Mortgage rate

Question 5

Interest,dividends,and capital gains from investments in tax-sheltered retirement plans are tax-free.

Accepted Answer

A) True 
 B)False

Question 6

Future value is the valuation of an asset projected to the end of a particular time period in the future.

Accepted Answer

A) True 
 B)False

Question 7

The typical U.S.recession is marked by an average economic decline of 6 percent.

Accepted Answer

A) True 
 B)False

Question 8

The amount you pay to purchase a health care plan is called the deductible.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following economic indicators tends to move in the opposite direction of where the economy is headed?​

Accepted Answer

A)   ​procyclical indicators
B)   ​employment rate
C)   ​gross domestic product
D)   ​counter cyclical indicators

Question 10

Compound interest will produce larger investment values than simple interest.

Accepted Answer

A) True 
 B)False

Question 11

Interest is the price of money.

Accepted Answer

A) True 
 B)False

Question 12

The two statistics one should track to understand the future direction of the economy are​

Accepted Answer

A)   ​interest rates and inflation.
B)   ​interest rates and the gross domestic product.
C)   ​the consumer confidence index and the index of leading economic indicators.
D)   ​inflation and the index of leading economic indicators.

Question 13

The preferred phase of the economic cycle is​

Accepted Answer

A)   ​expansion.
B)   ​peak.
C)   ​trough.
D)   ​contraction.

Question 14

All things considered,a saver who earns 6 percent interest on a savings account when the rate of inflation is 6 percent is losing real purchasing power.

Accepted Answer

A) True 
 B)False

Question 15

The economic phase with conditions making it easy for consumers to buy homes,cars,and other goods is called​

Accepted Answer

A)   ​expansion.
B)   ​trough.
C)   ​peak.
D)   ​contraction.

Question 16

The rate of increase in prices of items purchased by a particular individual is called the​

Accepted Answer

A)   ​federal funds rate.
B)   ​consumer confidence index.
C)   ​personal inflation rate.
D)   ​consumer price index.

Question 17

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed​

Accepted Answer

A)   ​only after funds are withdrawn from the plan,if at all.
B)   ​with each payment.
C)   ​annually.
D)   ​on a quarterly basis.

Question 18

Financially successful people often pay U.S.federal income taxes at the 25 percent,or higher,marginal tax rate.

Accepted Answer

A) True 
 B)False

Question 19

The most recognized professional designation held by financial planner is the​

Accepted Answer

A)   ​NAPFA Registered Financial Advisor (NRF
A)  
B)   ​Certified Financial Planner (CFP) 
C)   ​Certified Public Accountant (CP
A)  
D)   ​Accredited Financial Counselor (AF
C)

Question 20

Inflation is defined as a steady rise in the general level of prices.

Accepted Answer

A) True 
 B)False

Exam 1: Understanding Personal Finance

Which of the following economic indicators tends to move in the opposite direction of where the economy is headed?​

Correct AnswerverifiedShow Answer

Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future?​

Correct AnswerverifiedShow Answer

Future value is the valuation of an asset projected to the end of a particular time period in the future.

Correct AnswerverifiedShow Answer

All things considered,a saver who earns 6 percent interest on a savings account when the rate of inflation is 6 percent is losing real purchasing power.

Correct AnswerverifiedShow Answer

Interest,dividends,and capital gains from investments in tax-sheltered retirement plans are tax-free.

Correct AnswerverifiedShow Answer

Interest is the price of money.

Correct AnswerverifiedShow Answer

The rate of increase in prices of items purchased by a particular individual is called the​

Correct AnswerverifiedShow Answer

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?​

Correct AnswerverifiedShow Answer

Inflation is defined as a steady rise in the general level of prices.

Correct AnswerverifiedShow Answer

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?​

Correct AnswerverifiedShow Answer

401(k),403(b)and 457 plans are example of tax-sheltered retirement plans offered by employers.

Correct AnswerverifiedShow Answer

The two statistics one should track to understand the future direction of the economy are​

Correct AnswerverifiedShow Answer

The typical U.S.recession is marked by an average economic decline of 6 percent.

Correct AnswerverifiedShow Answer

The most recognized professional designation held by financial planner is the​

Correct AnswerverifiedShow Answer

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed​

Correct AnswerverifiedShow Answer

The amount you pay to purchase a health care plan is called the deductible.

Correct AnswerverifiedShow Answer

The economic phase with conditions making it easy for consumers to buy homes,cars,and other goods is called​

Correct AnswerverifiedShow Answer

The preferred phase of the economic cycle is​

Correct AnswerverifiedShow Answer

Financially successful people often pay U.S.federal income taxes at the 25 percent,or higher,marginal tax rate.

Correct AnswerverifiedShow Answer

Compound interest will produce larger investment values than simple interest.

Correct AnswerverifiedShow Answer

Which of the following economic indicators tends to move in the opposite direction of where the economy is headed?

Correct Answer
verified

Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The rate of increase in prices of items purchased by a particular individual is called the

Correct Answer
verified

Which of the following is a way to receive free money to deposit into a tax-sheltered retirement plan?

Correct Answer
verified

Correct Answer
verified

A single person with a monthly taxable income of $7,000 in the 28 percent marginal tax bracket forgoes consumption and instead places $450 into a tax-sheltered retirement plan every month.What are the yearly tax savings due to these retirement contributions?

Correct Answer
verified

Correct Answer
verified

The two statistics one should track to understand the future direction of the economy are

Correct Answer
verified

Correct Answer
verified

The most recognized professional designation held by financial planner is the

Correct Answer
verified

In an employer-sponsored retirement plan,interest,dividends,and capital gains earned from the funds invested in the plan are taxed

Correct Answer
verified

Correct Answer
verified

The economic phase with conditions making it easy for consumers to buy homes,cars,and other goods is called

Correct Answer
verified

The preferred phase of the economic cycle is

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified