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EPF W1SE MONEY MANAGEMENT Flashcards | StudBud
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EPF W1SE MONEY MANAGEMENT
EPF W1SE MONEY MANAGEMENT
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36 Personal Finance Questions
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1
Ben's annual income is $30K, he contributed $3k to his IRA. What is is taxable income?
$27,000
$0 because he contributed to his IRA
$33,000
$30,000
2
A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the
less liquid assets the person has
worse off financially the person is
better off financially the person is
more liquid assets the person has
3
A benefit of holding an investment for over a year rather than selling it in less than a year
Money earned on the investment is tax free
Fees will not be charged by brokers for selling investments
Capital gains on the investment are taxed at a lower rate
Profits can be averaged for the time the investment is held
4
The financial planning process
Includes lifetime goals
Guarantees that assets will increase
Does not need to be revised for changing income & needs
Needs to be adjusted for changing needs & goals in stages
5
A person complains about how expensive it is to smoke. Cigarettes costs so much because...
Most tobacco is imported
Tobacco is controlled by the FDA
The government imposed an excise tax on tobacco
Tobacco is controlled by the FTC
6
The term that best describes money left over after paying taxes, fixed & variable expenses is:
Net pay
Disposable/Descretionary income
Play money
Net surplus
7
Our values are:
The basic principles that guide our actions & beliefs
What we want to achieve
Our expectations of other people
The same as our goals
8
You budget $200 a month for clothing. This month you spent $150. This is considered
An outflow deficit
A budget variance
A budget deficit
An income overage
9
A well stated financial goal is:
Related to one's age group
A map of steps to be taken n the future
Logical and specific
Realistic with a target date
10
Spreading ones assets across several types of savings & investments to manage risks is called
Diversification
Pooling
Budgeting
Allocation
11
A stock broker or financial consultant
sell money orders and certified checks
gives financial advice to clients
guarantees a return of investments (ROI)
do not have to be licensed
12
Another term for the dollar amount of your paycheck after taxes & other withholdings is:
Net income
Gross income
Discretionary income
Adjusted gross income
13
Financial plans need to:
Be approved by an accountant
Include income but not expenses
Be changed during different stages in life
Include income and eliminate risks
14
Jane saw a breakfast cereal ad on TV & insisted her mother purchase it. This is an example of:
Failure to reach parents
Influence on consumer discipline
Power of persuasion in creating demand
Focus on discouraging demand for products
