Here are the answers to your questions:
QUESTION 26: A company that provides substantial dividends and opportunities for capital appreciation is considered to be
Answer: a. good for both income and growth.
QUESTION 27: After preparing a personal balance sheet, you find that your net worth is negative. Therefore, your top priority should be to
Answer: c. pay off some debts.
QUESTION 28: A typical person needs how much life insurance?
Answer: d. Enough to cover five to 10 years’ salary.
QUESTION 29: An envelope budgeting system works because
Answer: e. the empty envelope is a powerful reminder to stop spending.
QUESTION 30: Connie wants to collect interest on her initial payment and then receive back the initial amount when the security matures. Connie should invest in
Answer: c. fixed income investments such as bonds.
QUESTION 31: Disability insurance will provide
Answer: a. replacement income if you are disabled and cannot work.
QUESTION 32: Effective checkbook management includes all of the following except
Answer: a. entering checks and deposits monthly.
QUESTION 33: Failure to pay the correct amount of taxes promptly is
Answer: b. unethical and illegal.
QUESTION 34: In addition to an emergency savings account, __________ is your best defense against financial disasters.
Answer: a. insurance
QUESTION 35: In a personal balance sheet, assets are listed in order of
Answer: a. liquidity.
QUESTION 36: Heath’s automobile insurance policy states that, in the event of a claim, the policy will pay up to $50,000 for property damages and $50,000 for medical care, provided Heath pays the first $500 of the claim himself. The deductible on Heath’s auto policy is
Answer: c. $500.
QUESTION 37: Leyla says, “I am saving for my two-year-old son’s college education.” This statement reveals Leyla’s
Answer: a. time horizon.
QUESTION 38: The law requires a taxpayer to maintain records to support his or her tax returns, but in most cases does not specify the exact form of the records.
Answer: True
QUESTION 39: To aid in personal financial planning, Chad prepares a personal balance sheet. The personal balance sheet can do all of the following except
Answer: c. tell Chad how much he should be spending.
QUESTION 40: To minimize risk, investments in equities should be
Answer: e. diversified into many different industries.
QUESTION 41: U.S. Treasury bonds have virtually no _______ risk but they do have __________ risk.
Answer: b. default; interest rate
QUESTION 42: Vanessa says, “I would like to invest in the stock market but I only have a few thousand dollars and with that, I won’t be able to diversify my portfolio.” What would you recommend to Vanessa?
Answer: e. A mutual fund
QUESTION 43: Social Security provides sufficient income to cover all living expenses after retirement.
Answer: False
QUESTION 44: Tetsuko prepares a personal balance sheet. On it she lists cash she has in various checking and savings accounts. Tetsuko should include these items under the heading of
Answer: b. liquid assets.