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Chapter 14 Personal Finance complete test

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Chapter 14 Personal Finance - answers 49. When thinking about retirement, which of the following is correct? A. You'll spend less money when you retire. B. Saving just a little bit won't help. C. You can depend on Social Security and a company pension plan to pay your basic living expenses. D. The earlier you start saving, the better. E. Your pension benefits will increase to keep pace with inflation. - answers 50. When planning for retirement, you should review A. Housing. B. Life insurance. C. Investments. D. Assets. E. All of these. - answers 51. When planning for retirement, A. A mortgage should not affect your financial planning. B. Investments should be evaluated to determine whether their income can help cover living expenses. C. Keeping your current, large house will be cheaper to maintain than a move to a smaller house. D. Life insurance should be avoided. E. All of these are true. - answers 52. According to the text, which of the following will probably be your most valuable asset at retirement? A. Automobile. B. House. C. Investments. D. Life insurance. E. All of these. - answers 53. What steps should be taken in retirement planning? A. Conduct a financial analysis. B. Estimate retirement living expenses. C. Exceed budget amounts for spending. D. Conduct a financial analysis and estimate retirement living expenses. E. All of these are correct. - answers 54. An "average" older household spends most of its money on A. Entertainment. B. Food. C. Housing. D. Medical care. E. Transportation. - answers 55. An "average" older household spends more money on A. Clothing than on housing. B. Contributions than on medical care. C. Entertainment than on transportation. D. Housing than on contributions, entertainment, and clothing combined. E. Personal insurance than on food. - answers 56. When you retire, you will probably spend less money on A. Clothing. B. Health insurance. C. Medical care. D. Recreation. E. All of these. - answers 57. When you retire, you will probably spend more money on A. Clothing. B. Transportation. C. Taxes. D. Health insurance. E. All of these. - answers 58. When planning for retirement, inflation A. Decreases through retirement. B. Should be ignored since it will have no effect on retirement funding. C. Should be considered since income received earlier in retirement will buy more than the same amount received later in retirement. D. Is unimportant since pension income does not change in retirement. E. Should be recognized since it will increase the value of income received in retirement. - answers 59. Which of the following is not a source of retirement income? A. Annuity. B. Employer pension plan. C. Personal retirement plan. D. Public pension plan. E. All of these are sources of retirement income. - answers 60. All of the following are examples of defined contribution plans except A. Defined benefit plan. B. Money-purchase plan. C. Profit-sharing plan. D. Salary reduction plan. E. Stock bonus plan. - answers 61. When an employer promises to set aside a certain amount of money for each employee each year, it has set up a A. Defined benefit plan. B. Money-purchase plan. C. Profit-sharing plan. D. Salary reduction plan. E. Stock bonus plan. ...................................................continued.........................................................

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Chapter 14 Personal Finance



d - answers 49. When thinking about retirement, which of the following is correct?
A. You'll spend less money when you retire.
B. Saving just a little bit won't help.
C. You can depend on Social Security and a company pension plan to pay your basic
living expenses.
D. The earlier you start saving, the better.
E. Your pension benefits will increase to keep pace with inflation.

e - answers 50. When planning for retirement, you should review
A. Housing.
B. Life insurance.
C. Investments.
D. Assets.
E. All of these.

b - answers 51. When planning for retirement,
A. A mortgage should not affect your financial planning.
B. Investments should be evaluated to determine whether their income can help cover
living expenses.
C. Keeping your current, large house will be cheaper to maintain than a move to a
smaller house.
D. Life insurance should be avoided.
E. All of these are true.

b - answers 52. According to the text, which of the following will probably be your most
valuable asset at retirement?
A. Automobile.
B. House.
C. Investments.
D. Life insurance.
E. All of these.

d - answers 53. What steps should be taken in retirement planning?
A. Conduct a financial analysis.
B. Estimate retirement living expenses.
C. Exceed budget amounts for spending.
D. Conduct a financial analysis and estimate retirement living expenses.
E. All of these are correct.

, c - answers 54. An "average" older household spends most of its money on
A. Entertainment.
B. Food.
C. Housing.
D. Medical care.
E. Transportation.

d - answers 55. An "average" older household spends more money on
A. Clothing than on housing.
B. Contributions than on medical care.
C. Entertainment than on transportation.
D. Housing than on contributions, entertainment, and clothing combined.
E. Personal insurance than on food.

a - answers 56. When you retire, you will probably spend less money on
A. Clothing.
B. Health insurance.
C. Medical care.
D. Recreation.
E. All of these.

d - answers 57. When you retire, you will probably spend more money on
A. Clothing.
B. Transportation.
C. Taxes.
D. Health insurance.
E. All of these.

c - answers 58. When planning for retirement, inflation
A. Decreases through retirement.
B. Should be ignored since it will have no effect on retirement funding.
C.
Should be considered since income received earlier in retirement will buy more than the
same amount
received later in retirement.
D. Is unimportant since pension income does not change in retirement.
E. Should be recognized since it will increase the value of income received in
retirement.

e - answers 59. Which of the following is not a source of retirement income?
A. Annuity.
B. Employer pension plan.
C. Personal retirement plan.
D. Public pension plan.
E. All of these are sources of retirement income.

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