When money earns interest on interest, it is said to be compounding.

1. When money earns interest on interest, it is said to be compounding.

2. True

3. Since real estate brokers are licensed and bonded, they are required to give you unbiased information about real estate purchases

4. False

5. A personal loan is different from a credit card in that it is normally used to finance one large purchase

6. True

7. On an amortization schedule, more interest and less principle is paid each month as the loan matures.

8. False

9. Before you start an investment program, you should ensure liquidity by having money in financial institutions or in money market securities.

10. True

11. Long term liabilities are debts that will be paid at least three years into the future.

12. False

13. Goals with a time frame five or more years into the future are called intermediate-term goals

14. False

15. The traditional IRA allows tax-deductible contributions of up to $4000 for individual who are not covered by employer-sponsored retirement plans or meet income qualifications if they have an employer plan.

16. True

17. Defined contribution employer- sponsored retirement plans provide you a specific amount of income when you retire, based on factors such as your salary and years of employment.

18. False

19. In order to be valid, a will must be dated, signed, and witnessed.

20. True

21. The amount of income that you receive from Social Security when you retire is dependent on the number of years you earned income and your average level of income.

22. True

23. The most important element in FICO credit scoring is your payment history.

24. True

25. If no one else relies on your income, life insurance may not be necessary.

26. True

27. Advantages of whole life insurance policies are that they provide long-term coverage, the rates are fixed, and they have a savings or cash value feature.

28. True

29. A _________________ is established to transfer assets tax-free from a company retirement plan.

30. Rollover IRA

31. If you are about to invest in a stock that has excellent growth potential over the next few years and the investment is to be part of your retirement, the best place to do this would be in

32. Roth IRA

33. The bond par value or face value is the amount the investor will get paid when the bond matures.

34. True

35. A personal balance sheet summarizes

36. Assets, liabilities, and net worth

37. Another term for your wealth calculated by deducting money that you owe from the value of the things you own is

38. Net worth

39. Compounding is the process of obtaining present values; discounting is the process of obtaining future values.

40. False

41. Employers have an option of wheter or not to match an employees Social Security and Medicare taxes

42. False

43. Cash advances on credit cards normally cost you interest from the date of the advance and also a transaction fee of 1 to 2 percent

44. True

45. One of the disadvantages of credit cards is that they allow you to spend beyond your means

46. True

47. The term ARM stands for

48. Adjustable rate mortgage

49. Capital gains from mutual funds can be received if the mutual fund makes a profit on the shares it sells or if an individual investor realizes a gain on the sale of mutual fund shares

50. True