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WBH EPF Money Management Flashcards | StudBud
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WBH EPF Money Management
WBH EPF Money Management
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1
Which of the following careers would be a possible choice for someone interested in money and finance?
Statistician
Retail store manager
Banker
Social worker
2
Electricity and food expenditures are:
fixed expenses that remain the same from one period to another.
personal expenses for an individual or family.
variable expenses that change from one period to another.
discreet expenses that do not have to be paid monthly.
3
Which of the following careers would be possible choices for someone interested in money and finance?
insurance actuary
social worker
psychologist
musician
4
In terms of their finances, when a couple has a baby, they will
receive an additional tax exemption because of the baby.
need to obtain a W-2 form for the baby.
automatically start paying Social Security payments for the baby.
have to file a separate income tax form for the baby.
5
John’s company will match his pre-tax contributions to the company’s retirement plan, known as:
a traditional IRA
a defined benefit plan
a 401(k)
a Roth IRA
6
A person’s debt ratio shows the relationship between debt and 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.
7
You want to gain control over your income & spending so that you'll be able to save $. Which step will be most helpful?
getting advice from a friend.
applying for a loan.
developing a budget.
developing a retirement plan.
8
Financial planning helps individuals to:
achieve all goals by set target dates.
have strategies for saving and investing.
guarantee future income.
eliminate risk on investments.
9
An important consideration when saving money for emergencies is:
high growth potential.
return on investment.
diversification.
high degree of safety and liquidity.
10
A term that best describes your gross pay after taxes are deducted is:
ake-home pay
assets
total revenues
new worth
11
Julian is single & college grad. who just got his 1st full-time job. Which following should be his 1st financial goal?
buying a life insurance policy.
creating a stock portfolio.
establishing a fund for emergencies.
buying a house.
12
The term that best describes money left over after paying taxes, fixed and other essential living expenses, is:
disposable income
play money.
net pay.
net surplus.
13
You can set up an Individual Retirement Account at:
a small loan company
a bank
an insurance agency
a real estate agency
14
A good example of a well-stated financial goal is:
become financially independent.
pay off $5,000 in credit card debt in two years.
buy a house.
buy a $25,000 car.
15
A stock broker or financial consultant:
gives financial advice to clients.
sells money orders and certified checks
do not have to be licensed.
guarantee a return on investment
16
A clear understanding of our personal values will:
enable us to make choices that reflect what is important to us
enable us to save effectively.
cause anxiety as we make consumer and financial decisions.
encourage us to spend money on material goods.
17
Ben’s annual income is $30K, & he contributed $3,000 to traditional IRA in his local bank. What is his taxable income?
$30,000
$27,000
$0 because he contributed to an IRA
$33,000
18
Man budgeted $200 a mo. for clothing. This mo. the man spent $150 on clothing so that budget item is considered to have
an outflow deficit.
a budget variance.
a budget deficit.
an income overage.
19
Our values are:
same as our goals.
what we want to achieve
the basic principles that guide our actions and beliefs
our expectations of our people
20
Another term for the dollar amount of your paycheck after taxes and other withholdings is
gross income
net income
adjusted gross income
discretionary income
21
A well stated financial goal is:
realistic with a target date.
a map of steps to be taken in the future.
related to one’s age group.
logical and specific.
22
In addition to monthly mortgage payments, each year a homeowner can expect to pay
an assessment fee.
title insurance.
property taxes.
a broker’s fee.
23
Which of the following will help you the LEAST in managing your money?
set goals and keep a budget for your net income.
plan ahead for large expenses, shop with a list, and resist impulse buying
pay your rent/mortgage payment and utility bills on time.
get advice from your friends.
24
When deciding between two job offers with a similar salary offer, a person should first consider:
reputation of the organization.
retirement and health plans.
tuition reimbursement and bonus potential.
travel time to the work location and the size of the organization.
25
The following is usually considered a variable expense:
car payment
electric bill payment
mortgage payment
rent payment
26
Goals:
remain the same year after year, throughout life.
need to be realistic, have a target date, & an associated cost
need to reflect current income
are generally the same for middle class families.
27
Person complains about how expensive it's to be a cigarette smoker. One of reasons cigarettes are so expensive is that
tobacco industry imports most of the tobacco.
their cost is controlled by the Food & Drug Administration (FDA).
tobacco supply is controlled by the Federal Trade Commission (FTC).
the government imposes an excise tax on them.
28
Discretionary income is:
the difference between your total income & your essential living expense.
income and has been spent.
wages plus investment income.
a capital gain.
29
Can Cathy withdraw money from her IRA savings account?
She can take out the money at any time since she made the deposits.
Money cannot be withdrawn from an IRA before age 59.
There is a 50% penalty if she does not start withdrawing money at age 59.
There is a 10% penalty on any money she takes out before age 59.
30
What does a well-designed, successful financial plan include?
wants and needs
bank statements.
unexpected income
retirement planning
31
The financial planning process:
guarantees that assets will increase.
includes lifetime goals.
does not need to be revised for changing income and needs.
needs to be adjusted for changing needs & goals in diff. stages of life.
32
Terms of retirement $ person realizes amount of $ person will receive from Social Security depends on person’s:
average gross income from the last five years of employment.
net income from the person’s last job.
earnings over a lifetime of work.
contributions minus the $ person will receive from other pension plans.
33
I am using credit card to cover food cost or rent because I’m short on cash at end of each mo. The best thing to do?
borrow money from a relative.
apply for additional credit cards
make a budget and consider ways to reduce expenses or increase income.
ignore it. Things are bound to get better.
34
In creating her budget, Ann realizes that her expenses exceed her income. Ann should immediately try to:
apply for a loan.
ignore her budget until she has more income.
reduce or eliminate some expenses.
open an IRA account.
35
Financial planning is important because it helps you to:
have higher expectations.
eliminate risk on investments.
reach financial goals and protect your assets.
achieve all person goals.
36
Spreading one’s assets across several types of saving and investment products to manage risk is called:
budgeting
allocation
diversification
pooling
37
Jane saw a breakfast cereal being advertised on TV & insisted that her mother purchase it. This is ex. of advertising's_
failure to reach parents
influence on consumer discipline
focus on discouraging demand for products
power of persuasion in creating demand
38
Money set aside to grow
discretionary income
net income
savings or investments
a budget
39
One of the benefits of holding an investment for over a year rather than selling it in less than a year is that the
fees will not be charged by brokers for selling the investment.
capital gains on the investment will be taxed at a lower rate.
profits on the investment can be averaged over the length of time
money earned on the investment will be considered tax-free.
40
Which of the following is necessary for successful budgeting?
The location of your banks.
A list of unexpected income.
Copy of credit card report.
Ability to adjust spending to $ available.
41
Financial plans need to:
include income and eliminate risk
to be approved by an accountant.
be changed during different stages in life.
include income but not expenses.
42
Something you are working to achieve within a defined period of time is a(an):
dream
goal
value
deal
43
Rossi has a part time job delivering pizzas to raise money for college in 2 years. Going to college is one of Rossi’s:
values.
hopes.
goals.
dreams.
44
An example of a fixed expense is:
entertainment.
vacations.
apartment rent.
restaurants.
