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With all investments, as the risk goes up, the return goes down.


The Roth IRA is an after-tax investment that grows tax free


Never buy something you do not fully understand.


Shelf positioning forces the buyer to associate a value with the product.


Never roll over your 401(k) when you leave a company.


If we used a race analogy to describe building wealth, it would be most like a sprint


Rate of return matters when it comes to compound interest.


Diversification means to spread around.


Once you have a fully-funded emergency fund, put 10% of your income into retirement plans.


Your first Baby Step is to pay off all of your debt.


Most often identity theft is committed by strangers.


There are two major credit bureaus: TransUnion and Experian.


The fastest growing group of bankruptcy filers is senior citizens.


The power of cash is immediate


In order to have a FICO score, you must have debt.


The envelope system includes using credit cards for emergencies.


The average mutual fund has anywhere from 90-200 companies in it.


You do not need renter's insurance if you live in a dorm at college


Liquidity is the availability of your money.


You need a credit card in order to rent cars and check in to hotels.


Cash advance and title pawn companies charge roughly the same interest rates and fees on loans as a credit card company.


Henry Ford and J.C. Penney were pioneers of the use of credit.


Using a credit card is a good way to find a bargain


You should always use a realtor when selling a home.


Term life insurance is more expensive because it funds a savings plan.


Spending cash is more painful than using a debit card.


Men and women have different views about money.


Personal finance is 20% behavior, 80% head knowledge.


The average job is five years in length.


Not every state has FICA tax withholdings


There is no interest charged on debit card purchases


The number one cause of divorce in this country is money issues.


Walk away power means you leave if you don't get the price you want.


A good age to open a checking account is between the ages of 13 and 15.


The purpose of insurance is to increase your investments.


Increasing your deductible usually decreases the premium.


There are two parts to FICA: Medicare and Social Security


If your mortgage payment exceeds 25% of your net income, you have bought more house than you can afford.


Your salary is the most important motivation for working.


It usually takes three months for your budget to begin working well.


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

a. Monthly Social Security benefits are not going to be enough to live on comfortably
b. You are depending on another to take care of you
c. The system may not be able to pay promised benefits in the future
d. All of the above

Which is a type of insurance to avoid?

a. Long-term care insurance
b. Accidental death insurance.
c. Identity theft insurance
d. Disability insurance

What is the difference between gross pay and net pay?

a. Gross pay is before taxes, net pay is after taxes
b. Gross pay is after taxes, net pay is before taxes
c. There is no difference between the two
d. The difference is determined primarily by your current tax bracket

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

a. You have a good paying job and you have worked there for three years
b. You have an emergency fund
c. You have at least 10% down
d. Both b and c

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

a. Federal
c. State
d. All are mandatory withholdings

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

a. Get an umbrella policy
b. Decrease your deductible
c. Increase your deductible
d. Increase your liability

Which is not a characteristic of cash?

a. Visual
b. Walk away power
c. Emotional
d. Immediacy

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

a. 8-10 years old
b. Wait until they are18 years old
c. 13-15 years old
d. When they have a job

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

a. Couponing
b. Instant mailing
c. Rebating
d. 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?

a. Walk away
b. Ask about 90 days same-as-cash
c. Shut up
d. All of the above

A written cash flow plan is done every:

a. Three months
b. Month
c. Six months
d. Time your income changes

Which statement is not true about extended warranties?

a. Most warranties are about 50-60% commission
b. Only 12% of the warranty covers the statistical probability of the item breaking
c. You are better off to self-insure through your emergency fund
d. Warranties are like insurance in that they transfer the risk

What is true about your strengths and personality?

a. Your personality changes as you grow
b. You grow the most in your areas of strength
c. You will grow the most in your areas of weakness
d. Both a and b

The primary reason for insurance is to:

a. Transfer risk
b. Increase your assets
c. Save for college
d. All of the above

Why is cash value life insurance not a good investment?

a. Returns are historically low
b. When you die, the insurance company keeps the cash value
c. The fees deducted from your return are high
d. All of the above

Which of the following will not likely lead to reduced insurance rates?

a. Good grades
b. Speeding ticket
c. Driving an older car
d. Shopping around

A collector is taught to:

a. Be compassionate
b. Help the debtor set priorities
c. Be firm, yet nice
d. Evoke strong emotion

Which of the following is not a regulatory agency?

a. SEC
c. IRS
d. Bank of America

Which is not part of the Federal Fair Debt Collections Practices Act?

a. Restricts calling times of collectors to the hours of 8:00 A.M. - 9:00 P.M.
b. Requires creditors to correct any inaccuracies on your account
c. Allows you to insist a creditor stop all contact with a cease and desist letter
d. Allows you to request that a creditor stop calling your place of employment

Which is true about the practice of marketing credit cards to teenagers?

a. Teens are the number one target of credit card companies in America today.
b. Brand loyalty to your first card is incredible, so credit card companies work hard to win you over first.
c. Colleges are losing more students to credit card debt problems than to academic failure.
d. All of the above

In order to effectively manage money, you need a:

a. Budget
b. Online checking account
c. Computer
d. High paying job

Which of the following is not one of the three keys to finding a bargain?

a. Patience
b. Fast talking
c. Negotiate everything
d. Know where to look

A ___________ is usually over $300, but can vary depending on the person.

a. Opportunity cost
b. Significant purchase
c. Buying motive
d. Both a and b

How much more do you spend on purchases when you use credit instead of cash?

a. 3-5%
b. 10-20%
c. 12-18%
d. No difference in spending

Which is not a precaution to prevent your identity from being stolen?

a. Shred all documents that contain account information
b. Keep your Social Security card on you at all times
c. Create passwords using a combination of letters, numbers and characters
d. Never buy anything on the internet if you are using a public internet café

Which of the following is not covered under a bankruptcy?

a. Student loans
b. Medical bills
c. Car loan
d. Credit card debt

What is a key feature in computing your FICO score?

a. Debt
b. Your annual gross income
c. How much money you have in savings
d. All of the above

What concept is best explained by the statement, "Money spent here cannot be spent there"?

a. Significant purchases
b. Law of diminishing return
c. Opportunity cost
d. Delayed gratification

An overdue payment is called:

a. Foreclosure
b. Repossession
c. Delinquency
d. Surrender of collateral

Which is a true statement regarding the use of credit cards and paying the balance off each month?

a. This is the only responsible use of credit.
b. You are spending an average of 12-18% more when you use a credit card.
c. You are less apt to buy on impulse rather than thinking about a purchase.
d. You tend to think more before making purchases

The Baby Steps can best be described as:

a. A process for getting out of a financial mess in a systematic way
b. A series of seven sequential steps that help you plan, save and manage money
c. A series of steps that will work in good times and in bad times
d. All of the above

The risk return ratio says:

a. When risk goes down, the return generally will go up
b. When the risk goes up, the return generally will go down
c. When the risk goes up, the return generally will go up
d. There is no correlation between risk and return

Which is a good investment?

a. Gold
b. Commodities
c. Mutual Funds
d. Single Stocks

The most aggressive mutual funds tend to be from:

a. Companies that are a little younger and growing
b. Companies that are overseas
c. Companies that are older and well established
d. All of the above

What definition best explains an IRA?

a. A type of investment at a bank
b. A type of investment at a bank or investment firm that has good tax benefits
c. The tax treatment on virtually any type of investment
d. Investment that uses pre-tax dollars

If you have $3,000 invested in a Roth IRA, what is true about your contribution?

a. You have already paid taxes on the money so it will grow tax free
b. You will pay taxes only on the growth of $3,000
c. Both a and b
d. None of the above

Which of the following is a risk to consider when investing?

a. You could lose all of your money
b. Inflation
c. Your money is not liquid
d. All of the above are risks

If you own 50 shares of stock that you purchased for $40 a share, and the price increases to $70 per share, your profit is:

a. $20
b. $1500
c. $2000
d. $3500

The saving habits of Ben and Arthur best illustrate what principle of saving?

a. Rate of return matters
b. The amount of the initial investment is key
c. The length of time money is invested matters
d. Both a and c
e. The Rule of 72

What is the best way to buy a car?

a. Purchase used (two years or older)
b. Leasing
c. 0% financing on new or used
d. Purchase new at the end of the year

Oil and gold


Checking your bank statement against your account register


Bargaining for a lower price


Fee for an overdrawn account

Non-Sufficient Fund

Life insurance for a specified period of time

Term Life Insurance

With investments, as the risk goes up, so should the hopeful return.

Risk Return Ratio

Place your emergency fund in this type of account:

Money Market

Movement of tax-deferred retirement money from one plan to another


The true cost of something in terms of what you give up

Opportunity Cost

Combining separate debt payments into one single payment

Debt Consolidation

The amount you pay annually, quarterly or monthly for insurance


The value of your house over and above what you owe


Borrowing money and paying over time


Most expensive way to finance a new car


Experian, TransUnion, Equifax

Credit Bureaus

Spend every dollar on paper before the month begins

Zero Based Budget

Emotional, visual and has immediacy


Lists your personal, work and education history


Loan payments on a house


The availability of your money


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