Should be realistic, have a target date & an associated cost

An important consideration when saving money for emergencies is:

high degree of safety and liquidity

Joe complains about how expensive it is to be a cigarette smoker. One reason is that

the government imposes an excise tax on them.

Financial planning is important because it helps you to:

reach financial goals and protect your assets

Electricity and food expenditures are:

variable expenses that change from one period to another

Tia's debt ratio shows the relationship between debt and net worth. The lower the ratio the

better off financially the person is.

One benefit of holding an investment for over a year rather than selling it is that the

capital gains on the investment will be taxed at lower rate.

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MoneyPower.org - Money Management

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Questions 10

Answers

1
A man budgeted $200/mo for clothing & spent $150, therefore that budget item has
a budget deficit.
an income overage.
a budget variance.
an outflow deficit.
2
Goals:
Remain the same year after year, throughout life
Should be realistic, have a target date & an associated cost
Need to reflect current income
Are generally the same for middle class families
3
An important consideration when saving money for emergencies is:
high growth potential
high degree of safety and liquidity
diversification
return on investment
4
Joe complains about how expensive it is to be a cigarette smoker. One reason is that
their cost is controlled by the FDA
the tobacco supply is controlled by the FTC
the government imposes an excise tax on them.
the tobacco industry imports most of the tobacco.
5
Which of the following will help you the least in managing your money?
get advice from your friends
set goals and keep a budget for your net income
plan large expenses, shop w/a list, & resist impulse buying
pay your rent/mortgage payment and utility bills on time
6
Financial planning is important because it helps you to:
reach financial goals and protect your assets
achieve all personal goals
eliminate risk on investments
have higher expectations
7
Electricity and food expenditures are:
discreet expenses that do not have to be paid monthly
fixed expenses that remain the same from 1 period to another
variable expenses that change from one period to another
personal expenses for an individual or family
8
Tia's debt ratio shows the relationship between debt and net worth. The lower the ratio the
better off financially the person is.
worse off financially the person is.
more liquid assets the person has.
less liquid assets the person has.
9
One benefit of holding an investment for over a year rather than selling it is that the
fees won't be charged by brokers for selling the investment.
capital gains on the investment will be taxed at lower rate.
profits on investment can be avg'd over the time it's held
money earned on the investment will be considered tax-free.
10
Expenditures that remain constant from one time period to another are:
Current expenses
Fixed expenses
Variable expenses
Steady assets

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