Family Life Cycle & Budgeting
After Creating his budget, John realized his expenses exceeded his income. To resolve this issue, he can do which of the following?
A. Invest more in the stock market
B. Eat out less frequently
C. Go on a shopping spree
D. Work fewer hours
B. Eat out less frequently
CDs are similar to savings accounts because of they have which of the following?
A. High interest rates
B. A fixed term
C. A fixed rate
D. Accrue interest
D. Accrue interest
T or F - Short-term goals cover a time period of one to two years
False
T or F - Anyone can open a 401K savings plan
False
Focal point of developing a personal finance plan; require constant updating as a result of the chsnging family life cycle
The number of categories in the family life cycle.
What is 8.
Savings accounts are like money market accounts because of which of the following?
A. They have a limited number of withdrawals
B. They have a low rate of return
C. They have a high minimum balance requried.
D. Check writing is authorized
A. They have a limited number of withdrawals.
Budgeting finances requires calculating ____ and ____.
A. Income; Expenses
B. Investments; Savings
C. Utility; opportunity cost
D. Inflation; taxes
A. Income; Expenses
A. Can be withdrawn at any time
B. Applies a 10 percent tax penalty on any withdrawals made before the age of 59.5
C. Does not require taxes paid on the interest
D. Does not reduce tax liability.
B. Applies a 10 percent tax penalty on any withdrawals made before the age of 59.5
Explains how a person changes financial position, earnings, consumption, and savings throughout the life cycle.
A budget helps prevent debt by detailing which of the following.
A. Listing Expenses
B. Showing current debts.
C. Identifying shortages before they happen
D. Creating new income
C. Identifying shortages before they happen
Unlike Roth IRAs, traditional IRAs have which of the following characteristics?
A. Restricts the amount if cash which can be contributed
B. Allows individuals to save for retirement.
C. Has tax benefits
D. Requires taxes be paid on interests
D. Requires taxes be paid on interests
____ explains how a person changes financial position, earnings, consumption, and savings throughout the life cycle.
A. Financial Evolution
B. Money life cycle
C. Portfolio growth
D. Family life cycle
D. Family life cycle
Common stock differs from preferred stock in which of the following ways?
A. Voting rights
B. Exchange rates.
C. Callable features.
D. liquidity.
A. Voting rights.
Allows users to withdraw and deposit money at anytime, used for daily expenses; usually free.
What are Checking Accounts.
The family life cycle helps marketers define which of the following?
A. Target market
B. Budget expenses
C. Someone's age
D. Family Size
A. Target market
Mutual funds can be described as which of the following statements?
A. Comes in two types, common and preferred.
B. Are professionally managed.
C. Provides ownership in a company.
D. Provides cushion for unforeseen financial conditions in an emergency.
B. Are professionally managed.
Budgets assist in reorganizing finances to reduce __ or increase __.
A. Problems; Happiness
B. Funds; Expenses
C. Debt; Savings
D. Consistency; Originality
C. Debt; savings
A ___ account has a higher rate of return, but a ___ account has a lower required minimum balance
A. Savings; money market
B. Money market; savings
B. Money market; savings
Earn interest over time, but have limited number of transfers and withdraws allowed.
What are Savings Accounts.
Because the family life cycle changes, goals require which of the following?
A. Long term target dates
B. Priorities
C. Lots of thought
D. Constant updating
D. Constant updating
CDs are a common way to save money and are offered by most financial institutions. CD stands for-
A. Compact Disc
B. Certificate of Development
C. Certificate of Deposit
D. Canadian Dollar
B. Certificate of Deposit
If income exceeds expenses, which of the following is recommended?
A. Increase income sources.
B. Go on vacation.
C. Decrease income sources.
D. Research investment and savings options.
D. Research investment and savings options.
Which of the following accurately describes stocks?
A. Employee-sponsored retirement benefit plans
B. Savings accounts which include tax benefits
C. Investments providing ownership of public companies
D. Contributions for the government required of people.
C. Investments providing ownership of public companies
Investment in publicly traded companies; provides ownership in a company.