A clear understanding of your personal values will

enable U to make choices that reflect what is important to U

Why hold an investment for over 1 year rather than selling it in less than a year

the capital gains will be taxed at a lower rate

In creating a budget, Ann realizes that her expenses exceed her income. Immediately she should

reduce or eliminate some expenses

A stock broker or financial consultant

Gives financial advice to clients

U are short on cash each month. U always use credit cards to pay rent and buy food

Do a budget. Find ways to reduce expenses or increase income

The financial planning process

considers changing needs & goals in different stages of life

Financial planning helps individuals to

have strategies for saving and investing

Which of the following will help you the least in managing your money

getting advice from your friends

It is expensive to be a smoker. One of the reasons cigarettes are so expensive is that

the government imposes an excise tax on them.

Jane saw a breakfast cereal advertised on TV & insisted that her mother purchase this cereal.

This shows the power of ads to create demand

A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the

better off financially the person is.

Discretionary income is

The difference between total income and living expenses

Financial planning is important because it helps you to

reach financial goals and protect your assets

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W!SE Review - Money Management Part 1

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A review of Money Management concepts to prepare students for the W!SE Financial Literacy Exam

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Questions 21

Answers

1
A clear understanding of your personal values will
enable U to make choices that reflect what is important to U
cause anxiety as U make consumer and financial decisions
enable U to save effectively
encourage you to spend money on material goods
2
Why hold an investment for over 1 year rather than selling it in less than a year
money earned on the investment will be considered tax-free
Brokers will not charge any fees for selling the investment.
the capital gains will be taxed at a higher rate
the capital gains will be taxed at a lower rate
3
A term that best describes your gross pay after taxes are deducted is
take-home pay
net worth
total revenues
assets
4
In creating a budget, Ann realizes that her expenses exceed her income. Immediately she should
reduce or eliminate some expenses
apply for a loan
open an IRA account
ignore her budget until she has more income
5
A stock broker or financial consultant
Sells money orders and certified checks
Guarantees a return on investment
Does not have to be licensed
Gives financial advice to clients
6
U are short on cash each month. U always use credit cards to pay rent and buy food
U should borrow money from a relative
Do a budget. Find ways to reduce expenses or increase income
U must apply for additional credit cards
Ignore it. Things are bound to get better
7
Something you are working to achieve within a defined period of time is
a value
a goal
a dream
an ideal
8
The financial planning process
does not need to be revised for changing income and needs
considers changing needs & goals in different stages of life
should not include lifetime goals
guarantees that assets will increase
9
Financial planning helps individuals to
guarantee future income
have strategies for saving and investing
eliminate risk on investments
achieve all goals by set target dates
10
U budgeted $200 a month for clothing. This month U spent $150 on clothing. U have
a budget variance.
an income overage.
a budget deficit.
an outflow deficit.
11
Which of the following will help you the least in managing your money
getting advice from your friends
paying your rent/mortgage payment and utility bills on time
planning ahead for large expenses and resist impulse buying
setting goals and keeping a budget for your net income
12
The following is usually considered a variable expense
car payment
electric bill payment
rent payment
mortgage payment
13
It is expensive to be a smoker. One of the reasons cigarettes are so expensive is that
the government imposes an excise tax on them.
Tobacco supply is controlled by the Federal Trade Commission
their cost is controlled by the Food and Drug Administration
the tobacco industry imports most of the tobacco.
14
Spreading one's assets across several types of saving and investment products to manage risk is
Diversification
Allocation
Pooling
Budgeting
15
You want to gain control over your income and spending so that you will be able to save money.
You should develop a retirement plan
You should apply for a loan
You should develop a budget
You should get advice from a friend
16
Jane saw a breakfast cereal advertised on TV & insisted that her mother purchase this cereal.
This is an example of ads failure to reach parents
This shows how all ad can make children misbehave
This shows how ads focus on discouraging demand for products
This shows the power of ads to create demand
17
A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the
more liquid assets the person has.
worse off financially the person is.
better off financially the person is.
less liquid assets the person has.
18
Money that is left over after paying taxes, fixed and other essential living expenses, is
Disposable income
Net pay
Net surplus
Play money
19
Discretionary income is
Income that has been spent
Wages plus investment income
A capital gain
The difference between total income and living expenses
20
The following careers would be possible choices for someone interested in money and finance
Insurance actuary
Psychologist
Musician
Social worker
21
Financial planning is important because it helps you to
have higher expectations
eliminate risk on investments
reach financial goals and protect your assets
achieve all personal goals

W!SE Review - Money Management Part 1 Flashcards | StudBud