Question 1

4.75 Points

Which of the following is a dollar-for-dollar reduction in an assessed tax liability? 

1. Tax deduction
2. Tax Credit
3. Tax exemption
4. Tax withholding

Q2

Which involves willingness to engage in actions with the possibility of a financial loss? 

1. Risk taking
2. Uncertainty
3. Risk tolerance
4. Risk avoidance

Q3

Jorge earns $20 per hour. He works 40 hours per week and takes 2 weeks of paid vacation each year. How much does Jorge earn per year, assuming that he does not receive overtime pay? 

1. $46,000
2. $41,600
3. $40,000
4. $51,000 Top of Form

4. Using the following incomes and expenses information, calculate the total debt-to-income ratio: 

Employment wages: $115,000 

Interest earned: $950 

Dividends earned: $1,200 

Mortgage payments: $38,600 

Auto loan payments: $3,300 

Student loan payments: $9,000 

Taxes: $31,050 

Utilities: $3,600 

Personal savings: $12,000 

Gas: $3,500 

Groceries: $7,200 

Entertainment: $6,000 

Charitable donations: $500 

Clothing: $1,500 

Travel: $1,000 

a. 53.69% 

b. 39.41% 

c. 43.45% 

d. 46.52% 

From 1824–2013, what percentage of the time did the stock market generate a positive annual return? 

1. 71%
2. 62%
3. 33%
4. 47%

Q6. 

Jorge has a monthly gross income of $3,500, and his monthly debt payments are: $325 car payment, $290 student loan payment, $930 mortgage payment, and $400 credit card payment. What is his total debt-to-income ratio rounded to the nearest percent? 

Q7

Investment gains earned during an initial time period are then put to work in the second time period earning additional investment returns. What is this called? 

1. Interest
2. Principal
3. Debt
4. Compount Growth

Which of the following is a rule that can help you grow your money? Select all that apply.

1. The longer you let your money grow, the more you will have in the future (assuming the same interest rate).
2. If you hide your money in your sock drawer, no one will know you have it.
3. The more interest you earn, the more you will accumulate over time.
4. The higher the interest rate you want, the more risk you must take.

Which of the following refers to a predefined range of taxable income where a single tax rate applies? 

1. Tax bracket
2. Effective tax rate
3. Marginal tax rate
4. Average tax rate

Which of the following is a series of equal payments or deposits? 

1. Future value
2. Time value of money (TVM)
3. Annuity
4. Number of periods

How long will it take for money to double if the annual percentage yield (APY) is 8%? 

1. 9 years
2. 9 months
3. 12 years
4. 12 months

The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) protect savings deposits up to what amount? 

1. $350,000
2. $250,000
3. $500,000
4. $450,000

Q13

Which involves the possibility of both a gain and a loss? 

1. Uncertainty
2. Risk taking
3. Risk avoidance
4. Risk tolerance

Which of the following is a health insurance program for households with low incomes? 

1. Medicare
2. Medicaid
3. Supplemental Nutrition Assistance Program (SNAP)
4. Temporary Assistance for Needy Families (TANF)

Using the following income and expenses information, calculate the surplus or deficit: 

• Employment wages: $115,000
• Interest earned: $950
• Dividends earned: $1,200
• Mortgage payments: $38,600
• Auto loan payments: $3,300
• Student loan payments: $9,000
• Taxes: $31,050
• Utilities: $3,600
• Personal savings: $12,000
• Gas: $3,500
• Groceries: $7,200
• Entertainment: $6,000
• Charitable donations: $500
• Clothing: $1,500
• Travel: $1,000

1. -$100
2. -$2000
3. $22,000
4. $23,900

Which of the following is a person’s assets minus their liabilities? 

1. Net worth
2. Assets
3. Liabilities
4. Principal

Which of the following is the recommended targeted savings rate for someone who is 30–40 years old? 

1. 10%
2. 20%
3. 15%
4. 12%

Which of the following shields the personal assets of all the owner(s) from the liabilities of their business? 

1. General partnership
2. Sole proprietorship
3. Capital partnership
4. Limited liability company (LLC)

Q19

Which of the following is the amount of money borrowed? 

1. Compound growth
2. Interest
3. Debt
4. Principal

How often should self-employed individuals pay their taxes? 

1. When they file their taxes
2. Quarterly
3. Monthly
4. Annually

Low-risk investments tend to generate what kind of investment income and wealth? 

1. Low and volatile amounts
2. High amounts
3. Low amounts
4. Stable amounts Top of Form

Approximately how many years would it take money to grow from $5,000 to $10,000 if it could earn 6% interest? 

Bottom of Form

Q23

What should you compare when selecting loans? 

1. Principal
2. Interest rate
3. Annual percentage rate (APR)
4. Annual percentage yield (APY)

Top of Form

Which of the following terms is defined as income after deductions? 

Bottom of Form

Q25

Using the following information about the family’s assets and liabilities, calculate the total assets: 

• Checking account: $3,000
• Savings account: $13,000
• Credit card balance: $5,500
• Utility bill: $500
• Home: $320,000
• Mortgage (30 years): $210,000
• Car: $25,000
• Car loan (60 months): $18,000
• Student loan (7 years): $25,000
• Household items: $15,000
• Retirement account: $64,000
• Other assets: $39,000

1. $464,000
2. $400,000
3. $415,000
4. $479,000

Which of the following is how quickly an asset can be converted to cash? 

1. Monetary asset
2. Liability
3. Fair market value
4. Liquidity

Which of the following refers to the average tax an individual pays on their entire income? 

1. Effective tax rate
2. Federal taxes
3. Tax bracket
4. Marginal tax rate

Over a lifetime, people with a professional degree can expect to earn how much more than those with only a high school diploma? 

1. $500,000
2. $1 million
3. $2.5 million
4. $2 million

Which filing status would be appropriate for someone who is unmarried and is the primary provider of a qualifying dependent? 

1. Head of household
2. Married filing jointly
3. Single
4. Married filing separately

Q 30

Using the following information about the family’s assets and liabilities, calculate the total liabilities: 

• Checking account: $3,000
• Savings account: $13,000
• Credit card balance: $5,500
• Utility bill: $500
• Home: $320,000
• Mortgage (30 years): $210,000
• Car: $25,000
• Car loan (60 months): $18,000
• Student loan (7 years): $25,000
• Household items: $15,000
• Retirement account: $64,000
• Other assets: $39,000

1. $274,000
2. $258,500
3. $259,000
4. $253,000

How long do unemployment benefits typically last? 

1. 2 years or less
2. 1 year
3. 26 weeks or less
4. 30 days

Which of the following is the price paid for using money? 

1. Principal
2. Interest
3. Compound growth
4. Debt

Which ratio indicates the percentage of your income that you are using to pay all of your debts? 

1. Emergency fund ratio
2. Consumer debt-to-income ratio
3. Savings ratio
4. Total debt-to-income ratio

Which of the following is a tax credit that can reduce an individual’s assessed tax below zero? 

1. Tax exemption
2. Tax deduction
3. Refundable tax credit
4. Nonrefundable tax credit

at percent is the Federal Insurance Contributions Act (FICA) tax rate for both employer and employee? 

1. 7.65%
2. 15.30%
3. 12.40%
4. 30.60%

Using the following information about the family’s assets and liabilities, calculate the debt ratio: 

• Checking account: $3,000
• Savings account: $13,000
• Credit card balance: $5,500
• Utility bill: $500
• Home: $320,000
• Mortgage (30 years): $210,000
• Car: $25,000
• Car loan (60 months): $18,000
• Student loan (7 years): $25,000
• Household items: $15,000
• Retirement account: $64,000
• Other assets: $39,000

1. 61.0%
2. 64.6%
3. 54.1%
4. 59.1%

Approximately what interest rate to the nearest whole percentage would you need to earn in order to turn $3,500 into $7,000 over 10 years? 

1. 5%
2. 10%
3. 9%
4. 7%

Q38

Which of the following is a tax that applies higher tax rates to households with higher incomes? 

1. Progressive tax
2. Flat tax
3. Sales tax
4. Regressive tax

Which of the following is a specific, measurable, attainable, relevant, timely (SMART) goal? 

1. Have a retirement income from personal savings, Social Security, and retirement plan assets.
2. Start saving early in life to save enough to reach the goal.
3. Retire at age 67 in Florida with an annual income of $80,000.
4. Begin saving today to reach future goals.

Q40

What is the annual percentage rate (APR) if a bank pays 0.3% interest monthly on savings? 

1. 1.8%
2. 2.4%
3. 4.8%
4. 3.6%