Wise Money Management Practice Quiz - Part II

In addition to monthly mortgage payments, each year a homeowner can expect to pay

• an assessment fee

• title insurance

• property tax

• a broker's fee

Can Cathy withdraw money from her IRA savings account?

• Money cannot be withdrawn from an IRA before age 59

• There is a 10% penalty on any money she takes out before age 59

• She can take out the money at any time since she made the deposits

• There is a 50% penalty if she does not start withdrawing money at age 59

Goals:

• Need to be realistic, have a target date, and, if possible, an associated cost

• Remain the same year after year, throughout life

• Need to reflect current income

• Are generally the same for middle class families

An important consideration when saving money for emergencies is:

• high growth potential

• high degree of safety and liquidity

• diversification

• return on investment

Julian is a single and recent college graduate who just got his first full-time job. Which of the following should be his first financial goal?

• buying a house

• buying a life insurance policy

• establishing a fund for emergencies

• creating a stock portfolio

An example of a fixed expense is:

• Entertainment

• Apartment Rent

• Restaurants

• Vacations

John's company will match his pre-tax contributions to the company's retirement plan, known as:

• A 401 (k)

• A Roth IRA

• A defined benefit plan

• A traditional plan

Ben's annual income is $30,000, and he contributed $3,000 to a traditional IRA in his local bank. What is his taxable income?

• $33,000

• $30,000

• $27,000

• $0 because he contributed to an IRA

Expenditures that remain constant from one time period to another are:

• Variable expenses

• Current expenses

• Fixed expenses

• Steady assets

When deciding between two job offers with a similar salary offer, a person should first consider:

• Travel time to the work location and the size of the organization.

• Retirement and health plans

• Tuition reimbursement and bonus potential

• Reputation of the organization