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Exam 1- 35/40 Finc
Terms in this set (39)
Josh has decided to take a course at the local community college that could help him get a promotion at work. the course begins at 5 pm and goes til 9pm on monday nights. Josh normally works til 5pm each day but because of the drive he will need to leave work at 3 pm on class days. he currently earns 18.50 per hour. His employer contributes 10% of Joshs gross earnings to a 401k. if the class meets 16 times what is his opportunity cost?
Which of the following statements is true with regards to the 2008-2009 financial crisis?
the value of homes were cut in half or more
___ management involves decisions regarding how much money to retain in liquid form and how to allocate funds among short term investment instruments
During the past year Fritz spent 3,000 to take a cruise, bought stock costing 5,000 that by year end had increased to 6,000 and paid of a credit card of 3,500. what was the net effect on Fritzs net worth of these transactions?
Which of the following could save a smaller proportion of their earnings to achieve the same level of wealth
all of the following are true with regards to the demand of financial advisors except
-many people lack an understanding of finance
-many people are just not interested in making their financial decisions
-financial matters have become so difficult that making decisions alone is impossible
-the law requires that you use them before making investments (correct)
if you are interested in achieving a long term savings goal, then
you believe saving a small amount is better than saving nothing at all
a personal financial plan specifies financial goals and describes
spending, financing, and investment plans
___ management involves decisions regarding how much credit you need to support spending and which sources of credit to use
a plan for____ is needed to determine how much you could afford to borrow, the length of a loan, and to select a loan that charges competitive interest rates
when a person owns corporate stocks, government or corporate bonds, or mutual funds, these are called
if Jo ann had 4,000 in liquid assets and 1,000 in current liabilities she would have a liquidity ratio of
a family with $45,000 in assets and $22,000 in liabilities would have a net worth of
If you sell stock from your portfolio to pay off your car loan, your debt ratio of 0.5 will
investment assets are all of the following except
Many individuals tend to____ their cash inflows and ___ their outflows
If you save the same dollar amount from each paycheck during your career as your income increases, your savings rate will
davids liquidity ratio is 3. he has $1,000 in current liabilities. Therefore, he has ___ worth of liquid assets
Which of the following is a liquid asset
-stock held in IRA
-cash in savings account(correct)
if both a husband and wife are employed their consumption behavior will
John would like to save $1,500,000 by the time he retires in 30 years and believes he can earn an annual return of 8 percent. How much does he need to invest each year to achieve his goal?
the concept of the time value of money is based on
Byron is investing a mutual fund that claims that $1,000 today will be worth $5,000 in 5 years. What is he solving for?
At what annual rate would $200 grow to 497.60 in 5 years
Judy would like to have $200,000 saved in her retirement account in 20 years. At an interest rate of 10% how much should she contribute each year?
As the time period until receipt increases, the present value of the amount at a fixed interest rate
the future value of your savings and debt will affect all except which of the following?
-protecting your wealth
-financial planning costs
Which of the following decisions would involve the present value of a $1 ordinary annuity table?
you win a lawsuit and are offered a lump sum payment today at $100,000 or $15,000 a year for 20 years
if jimmy wants $25,000 in 5 years and can earn an 8% interest rate, how much does he need to invest today?
which of the following taxes is only paid on the first $110,100 of your salary
social security tax
Which of the following tax form is generally used by taxpayers whose filing status is married, has no dependents, and whose taxable income is less than $100,000
For qualified individuals, a contribution to a traditional IRA is an
If you are a surviving spouse you may continue to use the married filing jointly tax rates unless
you have children you can claim as an exemption
if you were to receive 100,000 from a corporation the most tax efficient way to receive it would be as
the standard deduction is smallest for
married filing separately, assuming over the age of 65 or blind
all of the following are types of non taxable income except
-child support payments
-casualty insurance reimbursements
-reimbursements of moving expenses by employer
Sallys adjusted gross income is $38,000. she does not own a home but has charitable contributions of $1500 and interest on her car of $2100. this year she also had medical expenses of $2000. She is allowed a standard deduction of $5950 and one personal exemption of $3800. What is her taxable income
which of the following items is not impacted by the taxpayers income level?
-amount withheld for social security
-college expense credits
-amount withheld for Medicare taxes
Which item below cannot be taken as an itemized deduction?
-child and dependent care expense (correct)
-real estate taxes
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