Personal Finance Final Exam Review Multiple Choice

Front

Why do you plan for retirement instead of relying on Social Security to take care of you?

Back

Monthly Social Security benefits are not going to be enough to live on comfortably, You are depending on another to take care of you, The system may not be able to pay promised benefits in the future.

Front

What is the difference between gross pay and net pay?

Back

Gross pay is before taxes, net pay is after taxes.

Front

In general, a good way to save on insurance premiums is to:

Back

Increase your deductible

Front

A written cash flow plan is done every: Three months, Month, Six months, Time your income changes

Back

Month

Front

Which statement is not true about extended warranties? Options: Most warranties are about 50-60% commission, Only 12% of the warranty covers the statistical probability of the item breaking, You are better off to self-insure through your emergency fund, Warranties are like insurance in that they transfer the risk

Back

Warranties are like insurance in that they transfer the risk

Front

What is true about your strengths and personality? Options: Your personality changes as you grow, You grow the most in your areas of strength, You grow the most in your areas of weakness, Your personality changes as you grow and you grow the most in our areas of strength

Back

You grow the most in your areas of strength

Front

The primary reason for insurance is to: Transfer risk, Increase your assets, Save for college, All of the answers are correct

Back

Transfer risk

Front

Why is cash value life insurance not a good investment? Options: Returns are historically low, When you die, the insurance company keeps the cash value, The fees deducted from your return are high, All of the answers are correct

Back

All of the answers are correct

Front

Which of the following will not likely lead to reduced insurance rates? Good grades, Speeding ticket, Driving an older car, Shopping around

Back

Speeding ticket

Front

A collector is taught to:

Back

Evoke strong emotion