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