Person's debt ratio shows the relationship b/t debt and net worth. The lower the ratio the

better off financially the person is

An important consideration when saving money for emergencies is:

high degree of safety and liquidity

Benefit of holding an investment for over a year rather than selling it less than a year is

capital gains on the investment will be taxed at lower rate

Financial planning helps individuals to:

have strategies for saving & investing

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W!SE Review - Money Management

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Questions 9

Answers

1
John's company will match his contributions to the company's retirement plan, known as
A defined benefit plan
Roth IRA
A traditional IRA
401(K)
2
Ben's annual income is $30,000 & he contributed $3,000 to traditional IRA, taxable income is
$0 because he contributed to an IRA
$27,000
$30,000
$33,000
3
Budget $200 for clothes, only spent $150 therefore that budget item is considered to have
A budget variance
an outflow deficit
an income overage
A budget deficit
4
Person's debt ratio shows the relationship b/t debt and net worth. The lower the ratio the
better off financially the person is
more liquid assets the person has
less liquid assets the person has
worse off financially the person is
5
An important consideration when saving money for emergencies is:
high degree of safety and liquidity
diversification
return on investment
high growth potential
6
Benefit of holding an investment for over a year rather than selling it less than a year is
fees will not be charged by brokers for selling investment
profits on the investment can be averaged
money earned on the investment will be tax-free
capital gains on the investment will be taxed at lower rate
7
Another term for dollar amount of your paycheck after taxes & withholdings
Adjusted gross income
Discretionary income
Gross income
Net income
8
A term that best describes your gross pay after taxes are deducted is:
take-home pay
total revenues
net worth
assets
9
Financial planning helps individuals to:
guarantee future income
eliminate risk on investments
have strategies for saving & investing
achieve all goals by set target dates

W!SE Review - Money Management Flashcards | StudBud