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W!se Practice Questions - Money Management/Financial Planning Flashcards | StudBud
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W!se Practice Questions - Money Management/Financial Planning
W!se Practice Questions - Money Management/Financial Planning
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Practice questions for the W!se Financial Literacy Test organized by Test Blueprint.
Flashcards
10 cards
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Practice quiz
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Questions
10
Answers
1
Which of the following best describes what financial planning allows a person to do?
Guarantee sufficient funds to achieve short-term financial goals.
Manage income and expenses effectively to achieve financial goals.
Spend money freely without worrying about future consequences.
Rely on credit cards and loans for major purchases.
2
What is a term for money a person contributes towards the cost of the home when securing a mortgage?
Escrow funds.
Mortgage payment.
Downpayment.
Interest.
3
At what age can a person typically withdraw money from an IRA without penalty?
55 years old.
65 years old.
59 ½ years old.
62 years old.
4
This tax is imposed to discourage the consumption of certain goods and services.
Excise tax.
Local tax.
Consumer tax.
Estate tax.
5
Which of the following statements best describes the benefit of contributing to a 401(k)?
401(k) contributions are taxed immediately, reducing your take-home pay.
401(k) contributions have no impact on taxes until retirement age.
Contributing to a 401(k) increases your monthly expenses.
Contributions are matched by your employer, up to a certain percentage.
6
This term refers to the person who receives financial assets outlined in a will.
Beneficiary.
Trustee.
Spouse.
Executor.
7
Which of the following is not a cost associated with renting?
Application fee.
Monthly rent payment.
Security deposit.
Closing costs.
8
Which of the following is a disadvantage of home ownership?
Ability to customize and personalize living space.
Potential increase in property value.
Accumulating equity over time.
Responsibility for maintaining and repairing the home.
9
Why might a person choose to have an individual retirement account (IRA)?
To avoid paying taxes on their gross income.
To increase their daily spending.
To invest in high-risk stocks.
To save for retirement and potentially receive tax benefits.
10
What is the potential benefit of a Roth IRA?
Tax-free withdrawals in retirement.
Guaranteed return on investments.
Higher interest rates compared to traditional retirement accounts.
Tax deductions on contributions.
