Personal Finance Final Exam Review Multiple Choice

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

• 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
• All of the answers are correct

Which is a type of insurance to avoid?

• Long-term care insurance
• Accidental death insurance
• Identity theft insurance
• Disability insurance

What is the difference between gross pay and net pay?

• Gross pay is before taxes, net pay is after taxes
• Gross pay is after taxes, net pay is before taxes
• There is no difference between the two
• The difference is determined primarily by your current tax bracket

You are ready to buy a home under the following conditions:

• You have a good paying job and have worked there for three years
• You have an emergency fund
• You have at least 10% down
• You have an emergency fund and you have at least 10% down

Which tax may or may not be withheld from your paycheck depending on where you live?

• Federal
• FICA
• State
• All are mandatory withholdings

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

• Get an umbrella policy
• Decrease your deductible
• Increase your deductible
• Increase your liability

Which is not a characteristic of cash?

• Visual
• Walk away power
• Emotional
• Immediacy

What is a good age for kids to open their first checking account?

• 8-10 years old
• Wait until they are 18 years old
• 13-15 years old
• When they have a job

Sending in a proof of purchase to get free gifts or cash back is called:

• Couponing
• Instant mailing
• Rebating
• Online negotiating

Joe tries to bargain at an electronic store but is unable to get the price down to where he wants it. What should his next step be?

• Walk away
• Ask about 90 days same as cash
• Shut up
• All of the above