1. According to the rule of 72, a savings account will

Grow by 2% every 7 years. Grow by 7% every 2 years. Double in 7 years at 12%. Double in 12 years at 6%.

2. Under the SMART approach to financial goals, the M stands for

Measurable Money Modality Mindfulness

3. According to Kapoor et al, there are how many components of financial planning?

4 6 7 8

4. If you purchased a term life insurance policy, where would the cash value show on your personal financial statements?

Under assets on the personal balance sheet. Under liabilities on the personal balance sheet. It would not show on either the personal balance sheet or cash flow statement. Term life has no cash value. In the cash flow statement

5. If you saved $5,000 per year for 30 years in your retirement account, and earn 7% per year, it would grow to

358,222 228,000 472,304 749,325

6. Which type of investment has high income, excluding capital gains?

Common stocks Corporate bonds Government bonds Municipal bonds

7. If you purchased an IBM corporate bond that pays 5% per year with a face value of $1,000 in the recent past, and now comparable bonds with similar quality currently pay 4% per year, the approximate market value of the IBM bond would be

1040 1090 1140 1250

8. A $10,000 savings account earning 4% compounded daily would be worth _____ in one year.

10,400 10,408 10,498 10,540

9. According to the text, which age group generally has the highest credit score on average?

55 plus 45 - 54 35 - 44 18 - 34

10. If you bought a car with a loan amount of $25,000 with an interest rate of 5%, then your monthly payments for a 5 year loan would be

198 259 338 472

11. Preferred stock is _____ in the capital structure.

Above stocks and below bonds Above both stocks and bonds Below both stocks and bonds Below stocks and above bonds

12. According to mutual fund research, which funds tend to outperform most other mutual funds in the long term?

Closed-end funds S&P 500 Index fund Actively managed funds Bond funds

13. What reason is NOT given for the high cost of health care in the United States, according to the text?

High administrative costs Use of sophisticated and expensive technology Regulations Expensive insurance premiums

14. According to the easy method of calculating life insurance needs, if your salary is $50,000 per year, you should get about ______ of coverage.

$245,000 $350,000 $500,000 $1,350,000

15. What is the suggested amount of preretirement earnings retirees should have to be comfortable during the golden years, according to the text?

40% 50% 60% 70%

16. Assume John Smith is now 67 years old. He wants to retire and sees that he saved $300,000 in his retirement account which he plans to supplement with his Social Security benefit. Using Exhibit 14-5 (page 473) in the text, how much money can he withdraw each month if he thinks he'll live another 30 years? (Assume next egg goes to zero.)

$561 $1,074 $1,683 $3,000

17. If your wealthy aunt gave you $13,000 as a gift, how much taxes would she have to pay the federal government for 2016?

Zero 10% 15% 20%

18. Using Exhibit 3-5 in Chapter 3 in the text, what would be the federal tax for a married couple filing jointly who had taxable income of $70,000?

1,700 9,500 9,750 17,000

19. In 2012, according to the text, if a person died with wealth of $2.5 million, she would have to pay _____ in federal estate taxes.

Zero 10% 15% 20%

20. What is the title of the person who performs the tasks of carrying out the will?

The trustee The sponsor The guardian The executor