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FP 120 Week 3 Individual Assignment Week 3 Quiz

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FP 120 Week 3 Individual Assignment Week 3 Quiz
Complete the Week 3 Quiz
Please answer the following multiple choice questions. When done please post to your individual Grade Book tab or into your individual class e-mail account. You have until the end of this class week (Monday mid-night Arizona time to complete this quiz and have it posted for grading). Good luck to all of you I am sure you will all do a great job on this.
  1. The key to financial freedom is to:
    1. Get a higher-paying job, so you have more money to buy the things you want
    2. Always live below your means but within your needs, regardless of your income
    3. Borrow money at a low interest rate and invest it to hopefully get a higher average annual rate of return
    4. Make sure you have enough coming in each month to equal what's "going out" in spending
2.    You are on the path to financial freedom when:
  1. You get more pleasure out of saving than spending
  2. You have just enough to cover your monthly bills
  3. You have an eight-month savings plan tucked away
  4. You have all your credit cards paid off in full
3.    The best way to start taking control of your financial life is to:
  1. Promise yourself that starting today, you will not spend more each month than you earn
  2. Create a budget!
  3. Understand that you define your money; your money can never define you
  4. Hire a financial advisor to create an investment program for your retirement plan
4.    If the money you have coming in each month (your take-home pay) is less than the money going out each month to pay the bills, you should:
  1. Make up the difference by using a credit card with a very low interest rate
  2. Stop paying your credit card in full; paying just the minimum due gives you more money each month
  3. Look through your spending for the single biggest expense you can eliminate completely to make your income equal your outgo
  4. Find ways to trim spending from multiple spending categories till you have made up the shortfall
5.    To intelligently reduce your spending over the long term:
  1. Mark all the "needs" in your spending categories and get rid of them completely
  2. Never carry cash or credit cards on your person
  3. Consider scaling back on the frequency of certain expenses, such as how many times a month you eat out or go to the movies
  4. Limit your trips to stores or malls to just once a month
6.    If you have your heart set on a $100 purchase that you want but you know you can't afford, your best move is to:
  1. Stand in your truth and do not make the purchase
  2. Ask a friend or family member for a loan that you promise to repay
  3. See if you can cut your spending on other items by $100, so you can afford the purchase
  4. Wait for it to go on sale; once it is 20% less expensive, it's a great deal
7.    The smart way to pay for things when you have credit-card debt is to:
  1. Use only a debit card that has overdraft protection
  2. Use only a debit card that does not have overdraft protection
  3. Use only a credit card that has a 0% interest rate so you can pay it off over time
  4. Pay with cash
8.    Why isn't it smart to rely only a debit card?
  1. Not all stores accept debit cards.
  2. You might be unable to make a purchase if your card is rejected because your balance is too low.
  3. It's becoming harder and harder to earn rewards on debit cards.
  4. Your debit-card transactions are not reported to the credit bureaus.
9.    Your emergency savings fund should be enough to cover:
  1. $1,000 in unexpected expenses, such as a car repair
  2. Your rent or mortgage for three months
  3. All your living expenses for eight months
  4. A 10% increase in your monthly spending for "needs"
10. The best way to build an emergency fund is:
  1. As quickly as possible--it is the only money goal you should focus on until you have eight months of living costs saved up
  2. Over time, through automatic monthly deposits into an easily accessible account at a financial institution
  3. To open credit cards with high credit limits you can tap into in case of an emergency
  4. To borrow from friends or family
11. The best place for your emergency savings fund is:
  1. In a liquid account at a bank or credit union that offers you the highest interest rate possible
  2. In a fireproof safe within your home; you want to be able to get to your money quickly in an emergency!
  3. In your checking account or your debit-card account so you can get it right away--keep a mental note of what part of your balance is to be spent only on emergencies
  4. In a Roth IRA--you can always withdraw your contributions without a penalty or tax
12. How do you make sure the money you deposit at a bank or credit union is 100% safe--that you are guaranteed to get every penny back no matter what?
  1. Keep the money in a checking or savings account, not a money-market fund.
  2. Keep cash in a safe-deposit box at a bank that you have access to seven days a week.
  3. Just make sure your balance is never more than $50,000 at a single bank or credit union, because that is the limit that financial institutions can guarantee.
  4. Confirm that a bank is a member of the Federal Deposit Insurance Corp. (FDIC) or a credit union is a member of the National Credit Union Share Insurance Fund (NCUSIF), and never have more in your account than the maximum insured amount.
13. What is the maximum dollar amount the FDIC ensures in a single account?
  1. $150,000
  2. $200,000
  3. $250,000
  4. $500,000
14. Why should couples pay bills together?
  1. To keep an eye on each other
  2. Because it reduces the finger-pointing and blame game when there is a shortfall
  3. Because misery loves company
  4. To see who is spending more on wants
15. What should you do with items in your home you have not used for six months to a year?
  1. Start to use them right now, or you will have wasted the money you spent to buy them.
  2. Box them up and put them in the garage or storage just to get them out of your living space.
  3. Gather them up and donate them to a charity, or try to sell them at a garage sale and donate what does not sell.
4.  Ask yourself why you bought this item in the first place if you have not been using it.
16. How much money should you have in your emergency savings account?
1.    An amount equal to eight months of your living expenses
2.    An amount that will safely cover your bills for three to six months
3.    An amount between $2,500 and $5,000 to cover sudden, unexpected expenses
4.    Three months of your wages
17. Level term life insurance is best described as:
1.    Life insurance that remains in effect for a person's entire life (the term)
2.    Life insurance in which you pay the policy in full over a set period (the term), but the policy remains in force for life
3.    Life insurance that provides coverage at a fixed rate of payments for a set period of time (the term)
but the policy remains in force for life
4.    Life insurance that provides coverage at a fixed rate of payments for a set period of time (the term)
5.    Life insurance that pays out upon the policyholder's death and also accumulates value during the policyholder's lifetime.
18.  A good way to reduce the cost of your car, home, and health insurance is to:
1.    Raise the deductibles on your policies
2.    Reduce your coverage to the minimum
c.    Keep your auto and home policies with different companies
d.    Suspend your coverage for a limited time
19.  The four documents you must have to protect your family are:
a.    A will, an irrevocable trust, an advance directive, and a durable power of attorney
b.    A will, a living revocable trust, a durable power of attorney, and an advance directive
c.    A prenuptial agreement, a will, a bypass trust, and a living will
d.    An emergency information form, a will, a living revocable trust, and an advanced directive.
20.  If your income drops and you can no longer afford private school for your children, you should:
a.    Put your family first by reducing retirement contributions and using the money to pay for tuition for your children
b.    Use your emergency savings to cover tuition until your income increases
c.    Consider moving your child to a good public school, even if you have to move to a different community
d.    Apply for a private education loan at your bank or credit union

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