To ensure that some of your retirement savings will not be subject to income tax upon withdrawal, you would contribute to:
A traditional individual retirement account (IRA)
A Roth IRA
A 401(k) plan
A money market account
According to the U.S. Department of Energy, which of the following is the largest user of energy in the average American home, accounting for more than 40% of the utility bill?
Lighting
Cooling
Heating
Heating water
Which of the following is a good way to build your credit score?
Pay your credit card bill on time and in full
Only apply for credit you need
Have a diverse mix of credit
All of the above
You’re entitled to one free credit report every 12 months from each of the national credit reporting bureaus.
True
False
Net income is also known as which of the following?
Take-home pay
Money left after all bills are paid
Pre-tax income
Salary
Which term is defined as “the rate at which the value of a currency is falling and consequently the general level of prices for goods and services is rising.”
Inflation
Deflation
Compound interest
Interest rate
Most negative information (like late payments) remains on your credit report for how long?
One year
Seven years
20 years
Forever
Checking your credit report lowers your credit score.
True
False
It’s usually less expensive to pay off which debt first?
Student loan
Personal loan
That with the highest interest
Auto loan
Which of the following is an advantage of a 401(k) retirement plan over an Individual Retirement Plan?
An employer may contribute to a 401(k)
Funds withdrawn from a 401(k) are not taxed
You can contribute an unlimited amount to a 401(k) each year
The government guarantees the return of investment of a 401(k)
When interest rates increase, savers earn more interest and borrowers pay more interest.
True
False
Your credit score is calculated based on all of the following factors except:
Amounts owed
Length of credit history
Income
Payment history
If you purchase a bond and interest rates rise, what will happen to the price of the bond?
Stay the same
Rise
Fall
If you buy a company’s stock…
You have lent money to the company
You own a part of the company
The company will return your original investment to you with interest
The company will return your original investment
An auto loan with which of the following terms will result in the lowest total finance costs?
Shortest repayment term
Longest repayment term
Lowest monthly payment
If you deposit $100 and it earns 5% compounding interest each year, you'll have $110 at the end of the second year.
True
False
A diversified investment portfolio reduces an investor’s risk of loss.
True
False
The interest you earn on both your original deposit and on the interest that your money earns is known as what?
Annual percentage rate
Amortization
Compound Interest
Double interest
What’s the earliest age you can begin receiving social security?
60
62
66
70