1. If you have a problem with a product and you really want to get the attention of someone in customer service, you should raise your voice during your conversation.

• True
• False

2. Sally Smith's friends have told her that they think she should consider a visit to a personal financial planner. Why do you think her friends made the suggestion?

• Sally plans to quit her job and volunteer for local organizations.
• Sally has no credit card debt.
• Sally usually saves 10 percent of her paycheck for long-term goals.
• Sally tracks her investments and makes changes to her allocations once per year.
• Sally has used a budget for years.

3. An advantage of personal financial planning is:

• Increased impulse spending
• Increased control of financial affairs
• The use of low-interest savings
• Less monitoring of investments
• More credit card debt

4. Money management refers to

• Preparing personal financial statements.
• Day-to-day financial activities.
• Storing financial records for easy access.
• Trade-offs that occur with financial decisions.
• Spending money on current living expenses.

5. The equation to calculate net worth is

• Cash inflows - Cash outflows = Net worth.
• Cash inflows - Liabilities = Net worth.
• Cash inflows + Liabilities = Net worth.
• Assets - Cash outflows = Net worth.
• Assets - Liabilities = Net worth.

6. In an organized system, birth and marriage certificates belong in a safe deposit box.

• True
• False

7. If you have a problem with a product and you really want to get the attention of someone in customer service, you should raise your voice during your conversation.

• True
• False

8. Sally Smith's friends have told her that they think she should consider a visit to a personal financial planner. Why do you think her friends made the suggestion?

• Sally plans to quit her job and volunteer for local organizations.
• Sally has no credit card debt.
• Sally usually saves 10 percent of her paycheck for long-term goals.
• Sally tracks her investments and makes changes to her allocations once per year.
• Sally has used a budget for years.

9. An advantage of personal financial planning is:

• Increased impulse spending
• Increased control of financial affairs
• The use of low-interest savings
• Less monitoring of investments
• More credit card debt

10. Money management refers to

• Preparing personal financial statements.
• Day-to-day financial activities.
• Storing financial records for easy access.
• Trade-offs that occur with financial decisions.
• Spending money on current living expenses.

11. The equation to calculate net worth is

• Cash inflows - Cash outflows = Net worth.
• Cash inflows - Liabilities = Net worth.
• Cash inflows + Liabilities = Net worth.
• Assets - Cash outflows = Net worth.
• Assets - Liabilities = Net worth.

12. In an organized system, birth and marriage certificates belong in a safe deposit box.

• True
• False

13. The Truth in Lending Act requires that creditors explain how they calculate the finance charge.

• True
• False

14. The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

• Protecting
• Savings
• Sharing
• Borrowing
• Obtaining

15. Using the following table, calculate the taxes for an individual with taxable income of $20,800.

• $6,025.
• $5,175.
• $2,695.
• $850.
• $20,800.

16. The text identifies several phases in the buying process. The correct order of the phases is

• Preshopping activities, selection and purchase, evaluating alternatives, postpurchase activities.
• Evaluating alternatives, preshopping activities, selection and purchase, postpurchase activities.
• Preshopping activities, evaluating alternatives, selection and purchase, postpurchase activities.
• Evaluating alternatives, selection and purchase, preshopping activities, postpurchase activities.
• Postpurchase activities, evaluating alternatives, preshopping activities, selection and purchase.

17. Which of the following is an example of open-end credit?

• An installment loan for purchasing furniture
• An automobile loan
• A mortgage loan
• Single lump-sum credit
• A department store credit card

18. Negotiation activities are part of the ____ phase of the decision-making process.

• More than one of these is correct.
• postpurchase activities
• preshopping activities
• selection and purchase
• evaluating alternatives

19. Which of the following is NOT correct?

• Check 21 decreases the processing time for checks.
• A substitute check is a digital reproduction of the original paper check.
• Check 21 allows a substitute check to be an equivalent of the original check.
• Check 21 increases the fees banks can charge for checking accounts.
• All of these are correct.

20. Income that is never subject to tax is called

• Adjusted gross income.
• Tax-exempt income.
• Foreign income.
• Tax-deferred income.
• Earned income.

21. Price analysis is part of the ____ phase of the decision-making process.

• ordering activities
• postpurchase activities
• evaluating alternatives
• selection and purchase
• preshopping activities

22. Paul bought some bad gasoline that damaged the gas tank of his vehicle.

• All of these are correct.
• He should sue the gas station where he bought his gas.
• He never should have expected any problems with buying any product, especially gas for his car.]
• He should assume that the gas station should be able to track his purchase based on video cameras.
• He should provide the gas station with documentation of his purchase and all repair costs.

23. Prices at the local quick market (convenience store) will probably be lower than at the regional big box retailer (grocery store).

• True
• False

24. When creating a budget, which of the following statements is true?

• Include in income the bonuses and gifts you expect to receive.
• Common financial problems can be maximized through budgeting.
• It is easier to create a budget if your earnings vary.
• It is better to overestimate your income for next year.
• Numbers in the budget are estimates.

25. Which of the following appears on a cash flow statement?

• Liabilities
• Net worth
• Assets
• Investments
• Payments for variable expenses

26. The goal of investing $50 per month for the next 18 years for your nephew's college fund is a(n) __________ goal.

• Intermediate
• Short-term
• Long-term
• Durable
• Intangible

27. The settlement of a difference by an arbitrator is legally binding.

• True
• False

28. Rebecca Gladlyn budgeted $1,250 for housing and utilities in July. She actually spent $1,162. What is her budget variance?

• $88 surplus
• $44 deficit
• $1,162 surplus
• $1,162 deficit
• $88 deficit

29. Margaret signed the back of her check with the words "pay to the order of Penelope." She used a(n)

• Blank endorsement.
• Deposit ticket.
• Restrictive endorsement.
• Individual account.
• Special endorsement.

30. You have a legal right to sue a credit bureau if you observe an error in your file.

• True
• False

31. According to the Fair Credit Billing Act of 1975, a creditor must adjust the disputed amount in your account or tell you why the bill is correct within 30 days.

• True
• False

32. When purchasing a used vehicle, it is a good idea to

• Accept the dealer at his word about the condition of the vehicle.
• None of these is correct.
• All of these are correct.
• Have a trained and trusted mechanic of your choice check out the vehicle.
• Take out a loan for the entire cost.

33. The higher your FICO score, the more risk you pose to creditors.

• True
• False

34. When Flo says she's "going to the bank," she may be implying that she is visiting a credit union or stopping at an ATM.

• True
• False

35. Making transactions using a credit card will immediately reduce your bank balance.

• True
• False

36. In 2012, the maximum that an individual can contribute to a Keogh plan each year is:

• 10% of annual income.
• $15,500.
• $2,000.
• 25% of annual income, up to a maximum of $49,000.
• $5,000.

37. A legal agreement that provides for the management and control of assets by one party for the benefit of another is known as

• A loan.
• None of these.
• A savings account.
• A trust.
• A checking account.

38. An advantage of investing in a 401(k) plan is the

• Ability to roll IRA contributions into a 401(k).
• Ability to pay taxes on distributions.
• Possibility of receiving an employer match on your contributions.
• Ability to invest up to 25% of your annual income.
• Opportunity to save $5,000 per year.

39. Tanya is a single low-income working parent, and Fred is a single high-income working parent. Because of her status, Tanya, but not Fred, may be eligible for the

• Withholding credit.
• Alternative minimum tax.
• Earned income credit.
• Itemized deduction credit.
• Student deduction.

40. According to the Fair Credit Billing Act, if a creditor fails to follow the rules that apply to correcting any billing errors, you have the right to sue for

• Three times the actual damages.
• Actual damages.
• Nothing.
• Actual damages plus twice the amount of any finance charges.
• The amount owed on the item in question.

41. Investments and tax assistance, both tools for financial planning, are also known as

• Financial services.
• Loans.
• Savings accounts.
• Trusts.
• Checking accounts.

42. A college ID that includes prepaid amounts for meals is called a debit card.

• True
• False

43. The average tax rate is the taxes paid on the next dollar of income.

• True
• False

44. Paul Jacoby wants to deposit money today for a vacation that he plans to take to Asia after he graduates from Graduate School. Which formula should he use to determine the amount of money he will have available for his vacation?

• Future value of an annuity
• Present value of a single amount
• Future value of a single amount
• Simple interest
• Present value of an annuity

45. Consumer credit refers to the use of debit cards for personal needs.

• True
• False

46. Which of the following would increase the interest rate for a loan?

• Short time to maturity
• Lower consumer prices
• Higher down payment
• Constant interest rates
• Poor credit rating

47. If your taxes due are greater than the amount you had withheld for the year, you should expect a refund after you complete your federal income taxes.

• True
• False

48. Adolph has a low income and needs legal assistance. He should make use of (a)

• Lawyer.
• Class action lawsuit.
• Small claims court.
• Legal aid society.
• Prepaid legal services.

49. Zoe signed the back of her check with the words "for deposit only." She used a(n)

• Individual account.
• Deposit ticket.
• Restrictive endorsement.
• Special endorsement.
• Blank endorsement.

50. A budget system that can be kept on notebook paper or budgeting paper is called a

• Physical budget.
• Computerized budget.
• Allocated budget.
• Written budget.
• Mental budget.

51. The document that would be most useful to track the current value of investment accounts is the

• Budget.
• All of these.
• Balance sheet.
• None of these.
• Cash flow statement.

52. Timothy Carter has net monthly income of $3,800. He has a monthly auto loan payment of $350, a student loan payment of $150, a mortgage payment of $1,200, and a credit card minimum payment of $45. What is his debt-payments-to-income ratio?

• 42.0%
• 14.3%
• 36.7%
• 45.9%
• 13.2%

53. Which of the following sources would be the LEAST helpful when purchasing a vehicle?

• Media information with purchasing advice.
• Independent testing organizations like Consumers Union.
• Online sources with product information.
• Personal contacts to learn about product performance.
• Your cousin who has never purchaseda car.

54. The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

• Income tax rate.
• Marginal tax rate.
• Total tax rate.
• Average tax rate.
• AMT.