Question 1: A (n) _____ tax is imposed on the value of an individual's property at the time of his or her death.

• inheritance
• excise
• gift
• personal property
• estate

Question 2: Interest earnings of $2,400 from a taxable investment for a person in a 28% tax bracket would result in after-tax earnings of

• $672.
• $1,728.
• $2,400.
• $3,333.
• $8,571.

Question 3: A person has $3,000 in medical expenses and an adjusted gross income of $34,000. If taxpayers are allowed to deduct the amount of medical expenses that exceed 7.5% of adjusted gross income, what would be the amount of the deduction in this situation?

• $225
• $450
• $2,550
• $3,000
• $34,000

Question 4: Mary has earned money from a limited partnership, so she would need to report this as _____ income.

• passive
• capital gain
• portfolio
• earned
• excluded

Question 5: _____ allows for a certain amount of money to be deducted from adjusted gross income, and the total can be based upon yourself, a spouse, and the number of dependents

• A tax credit
• An exemption
• An exclusion
• Earned income
• Portfolio income.

Question 6: A person's taxes are affected by an exclusion because

• the amount of taxable income is reduced.
• itemized deductions will increase.
• itemized deductions will decrease.
• a person's tax rate will be lowered.
• the number of exemptions a person can claim will increase.

Question 7: Expenses that a taxpayer is allowed to deduct from adjusted gross income are called _____.

• exemptions
• exclusions
• itemized deductions
• tax credits
• passive income

Question 8: Taxes owed can be reduced through _____.

• the standard deduction
• a tax credit
• an itemized deduction
• an exclusion
• an exemption

Question 9: In order for a dependent to qualify as an exemption, he or she must

• be married.
• receive more than one half of his or her support from the taxpayer.
• be under age 16.
• be registered in school.
• be a relative.

Question 10: People who _____ must make estimated quarterly tax payments.

• are employed in a foreign country.
• receive dividends.
• work for the government.
• do not have adequate amounts withheld from income.

Question 11: A person is best served by investing in _____ when interest rates are rising.       

• short-term savings instruments
• long-term savings instruments
• short-term loans
• variable-rate loans

Question 12: A notable difference between a lost debit card and a lost credit card is that _____.

• a credit card carries more risk of loss to the cardholder
• a debit card carries more risk of loss to the cardholder
• there is no cardholder liability if either type of card is lost
• there is no difference in liability

Question 13: An example of a place where one will encounter high fees for loans when borrowing money is a _____.

• credit union
• savings and loan association
• pawnshop
• commercial bank
• mutual savings bank

Question 14: _____ are the major products offered by investment companies.

• Interest-bearing checking accounts
• Variable-rate loans
• Credit card accounts
• Savings bonds
• Mutual funds

Question 15: One of the characteristics of a certificate of deposit is that it can have

• high interest-rate risk.
• low safety for savers.
• limited liquidity.
• a variable rate of return.
• no minimum deposit amount.

Question 16: U.S. savings bonds provide the following advantage.

• Interest earned is exempt from federal income taxes.
• Interest earned is deferred for federal tax purposes.
• A constant rate of earnings
• They can be converted to other types of investments.

Question 17: A savings account in which interest is compounded _____ would have the highest effective yield.

• daily
• annually
• semiannually
• monthly
• weekly

Question 18: If a person wants to earn a relatively higher savings rate on his or her money, he or she may select a _____ at a commercial bank

• regular savings account
• regular checking account
• share draft
• money market account

Question 19: Service fees would be _____ in the bank reconciliation process.

• added to the bank statement balance
• subtracted from the bank statement balance
• added to the checkbook balance
• subtracted from the checkbook balance

Question 20: When an individual borrows money to purchase a new home, he or she will be charged a _____.

• prime rate
• discount rate
• mortgage rate
• Treasury bond rate
• corporate bond