WISE TEST REVIEW

What gives fiat money its value in the United States?

• Confidence in the U.S. government

• The amount of gold backing it

• Support from other countries

• Its use in other countries

How do you calculate a person’s net worth?

• Subtract liabilities from assets

• Add income and expenses

• Multiply savings by income

• Subtract taxes from gross income

Which of the following is an example of a liability?

• A car you own

• Money in a savings account

• A student loan

• A paid-off house

What does depreciation mean?

• A decrease in the value of an asset over time

• An increase in bank interest

• Paying off a loan early

• Earning more income than last year

Which of the following is a SMART financial goal?

• Save $500 for a new phone in 4 months

• Become rich fast

• Save whenever possible

• Spend less on fun stuff

Which of these is an example of a fixed expense?

• Groceries

• Gasoline

• Rent

• Entertainment

What is net income?

• Total pay before taxes

• Money earned before deductions

• Take-home pay after taxes and deductions

• Income from a side job

What is a key benefit of a Roth IRA?

• Withdrawals are tax-free in retirement

• It's only for self-employed workers

• You have to pay taxes when you take the money out in retirement

• There is no limit on how much you can contribute each year.

What is a 401(k) employer match?

• When your employer invests for you

• When your employer matches some of your retirement contributions

• When the government adds money to your account

• When you are required to match company stock

What can you do with your 401(k) when changing jobs to avoid penalties?

• Spend the money before switching

• Let your employer keep it

• Close the account

• Roll it into a new retirement account