Question 1

What is it called when a man budgets $200 a month for clothing but spends $150?

Accepted Answer

a budget variance

Answer

an income overage

Answer

a budget deficit

Answer

an outflow deficit

Question 2

Why are cigarettes considered expensive?

Accepted Answer

the government imposes an excise tax on them

Answer

the tobacco industry imports most of the tobacco

Answer

their cost is controlled by the Food and Drug Administration (FDA)

Answer

the tobacco supply is controlled by the Federal Trade Commission (FTC)

Question 3

Which of the following is usually considered a variable expense?

Accepted Answer

electric bill payment

Answer

rent payment

Answer

mortgage payment

Answer

car payment

Question 4

What does financial planning help individuals to achieve?

Accepted Answer

have strategies for saving and investing

Answer

eliminate risk on investments

Answer

achieve all goals by set target dates

Answer

guarantee future income

Question 5

What does a stock broker or financial consultant do?

Accepted Answer

Gives financial advice to clients

Answer

Guarantee a return on investment

Answer

Do not have to be licensed

Answer

Sells money orders and certified checks

Question 6

If Rossi is working to raise money for college, what is this considered?

Accepted Answer

Goals

Answer

Hopes

Answer

Values

Answer

Dreams

Question 7

What is something you are working to achieve within a defined period of time?

Accepted Answer

Goal

Answer

Value

Answer

Ideal

Answer

Dream

Question 8

If Ann's expenses exceed her income, what should she try to do immediately?

Accepted Answer

reduce or eliminate some expenses

Answer

open an IRA account

Answer

ignore her budget

Answer

apply for a loan

Question 9

After owning a Roth IRA for five years, can a person withdraw money to buy their first home?

Accepted Answer

tax and penalty free

Answer

but must pay a set penalty

Answer

and have penalties deferred until retirement

Answer

and owed taxes are deferred until retirement

Question 10

What does a defined-contribution pension plan provide upon retirement?

Accepted Answer

the total amount of money contributed plus investment earnings

Answer

one-half of the employee's last year’s salary

Answer

a specified amount based totally on the profit

Answer

an amount based only on the length of time worked

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