W!SE Review 25 Even 1

Comparison shopping for a car is necessary because

• each dealer sells cars with different colors

• lenders want to be sure consumers get the best price

• the price for the car can vary a great deal

• it is a requirement to qualify for car insurance

An important feature of a good financial goal is that the goal

• has a specific time frame

• is appropriate for the person’s age.

• can last throughout the person’s life

• will take at least ten years for the person to achieve

What strategy can help a person achieve her goal to buy a house?

• Using credit cards to pay for expenses

• Paying for large purchases in cash

• Following a budget that allows for savings

• Applying for more credit cards to increase her credit score.

Which of the following quotes is sound financial advice?

• “He who hesitates is lost.”

• “A penny saved is a penny earned.”

• “Don’t put off today what can be done tomorrow.”

• “The window of opportunity may only open once.”

Mandatory deductions from a person’s paycheck include

• federal withholding tax and FICA.

• school taxes and contributions to a retirement account.

• regressive taxes and employee automatic savings

• property taxes and employee benefits

Which of the following is the source of income for most people aged 20-35?

• Dividends.

• Wages/salary

• Rent.

• Mortgage payments.

When a person has a balanced budget that includes savings then

• net income = discretionary income.

• total expenses = savings.

• total income = total expenses – savings.

• total expenses + savings = total income.

The “time value of money” means that

• money paid out today has less value than if the money is paid out in the future.

• money received today is worth more than the same amount of money received in the

  future.

• the more time a person has to save, the lower the return on the money.

• the longer money is held, the less likely it will be spent.

A person who dies will have his assets distributed as he wanted as long as he has

• a will.

• a doctor.

• an accountant

• a financial plan

Don and Bill work together in the finance department of the same company and earn the same

salary. Bill spends his free time taking work-related classes to improve his computer skills. Don

spends his free time socializing with friends or watching TV. After five years, what is most likely to

be true?

• Don will make more because he is more physically fit.

• Don will make more because Bill is likely to become over qualified.

• Bill will likely make more money because he is more valuable to his company

• Don and Bill will continue to make the same amount of money