ECONOMICS FINAL

Question 1

Which statement is true about liquidity?

Answer 1

the more liquid an investment, the less return

Question 2

True or False: Commodities and futures are extremely speculative and carry a high risk.

Answer 2

True

Question 3

What is the KISS rule of investing?

Answer 3

Keep it Simple, Stupid

Question 4

Which of the following is not necessarily a wise, long-term investment? Gold, Viaticals, futures

Answer 4

all of these

Question 5

Which one is not a type of annuity?
fixed, stable, none of these, variable

Answer 5

stable

Question 6

True or False: A certificate of deposit is the best place to keep an emergency fund.

Answer 6

False

Question 7

Long-term investments properly diversified include the following mutual funds:

Answer 7

Growth, growth and income, international, aggressive growth

Question 8

True or False: A single stock is the best place to keep your emergency fund.

Answer 8

False

Question 9

The ____ IRA grows tax-free

Answer 9

Roth

Question 10

Never save for college using:

Answer 10

lottery tickets, savings bonds, pre-paid tuition

Question 11

T or F; Pre-tax contributions are ones the government lets you invest money in before taxes have been taken out of your income.

Answer 11

True

Question 12

T or F: When you leave a company, don’t move your money from that retirement account.

Answer 12

False

Question 13

T or F: Savings bonds are a good way to save for college

Answer 13

False

Question 14

What should you do with your retirement accounts when you leave a company?

Answer 14

direct transfer

Question 15

Baby Step 5 is:

Answer 15

college funding

Question 16

Which is not a retirement plan? 529, 401(k), 457, 403(b)

Answer 16

529

Question 17

If your company provides a 100% match up to 6%, how much should you personally contribute to your 401(k) if you earn $35,000 (not including the money the company contributed)?

Answer 17

$2,100

Question 18

Which is not a benefit of the Roth IRA?

Answer 18

allows unlimited contributions

Question 19

T or F: Baby Step 7 is to pay off your house

Answer 19

False

Question 20

T or F: Real estate agents are usually worth the price

Answer 20

True

Question 21

Which is not a type of mortgage? Veterans Administration, Lease to Own, Reverse, Conventional

Answer 21

Lease to Own

Question 22

How much do you need for a down payment in order to avoid paying PMI?

Answer 22

20%

Question 23

T or F: Your rent or mortgage payment should be at least 25% or more of your take-home pay.

Answer 23

True

Question 24

T or F: Friends or relatives always make the best real estate agents.

Answer 24

False

Question 25

Which is not an investment benefit of homeownership? grows virtually tax free, lower tax bracket, forced savings plan, inflation hedge

Answer 25

lower tax bracket