Question 1: A (n) _____ tax is imposed on the value of an individual's property at the time of his or her death.
- inheritance
- excise
- gift
- personal property
- estate
Question 2: Interest earnings of $2,400 from a taxable investment for a person in a 28% tax bracket would result in after-tax earnings of
- $672.
- $1,728.
- $2,400.
- $3,333.
- $8,571.
Question 3: A person has $3,000 in medical expenses and an adjusted gross income of $34,000. If taxpayers are allowed to deduct the amount of medical expenses that exceed 7.5% of adjusted gross income, what would be the amount of the deduction in this situation?
- $225
- $450
- $2,550
- $3,000
- $34,000
Question 4: Mary has earned money from a limited partnership, so she would need to report this as _____ income.
- passive
- capital gain
- portfolio
- earned
- excluded
Question 5: _____ allows for a certain amount of money to be deducted from adjusted gross income, and the total can be based upon yourself, a spouse, and the number of dependents
- A tax credit
- An exemption
- An exclusion
- Earned income
- Portfolio income.
Question 6: A person's taxes are affected by an exclusion because
- the amount of taxable income is reduced.
- itemized deductions will increase.
- itemized deductions will decrease.
- a person's tax rate will be lowered.
- the number of exemptions a person can claim will increase.
Question 7: Expenses that a taxpayer is allowed to deduct from adjusted gross income are called _____.
- exemptions
- exclusions
- itemized deductions
- tax credits
- passive income
Question 8: Taxes owed can be reduced through _____.
- the standard deduction
- a tax credit
- an itemized deduction
- an exclusion
- an exemption
Question 9: In order for a dependent to qualify as an exemption, he or she must
- be married.
- receive more than one half of his or her support from the taxpayer.
- be under age 16.
- be registered in school.
- be a relative.
Question 10: People who _____ must make estimated quarterly tax payments.
- are employed in a foreign country.
- receive dividends.
- work for the government.
- do not have adequate amounts withheld from income.
Question 11: A person is best served by investing in _____ when interest rates are rising.
- short-term savings instruments
- long-term savings instruments
- short-term loans
- variable-rate loans
Question 12: A notable difference between a lost debit card and a lost credit card is that _____.
- a credit card carries more risk of loss to the cardholder
- a debit card carries more risk of loss to the cardholder
- there is no cardholder liability if either type of card is lost
- there is no difference in liability
Question 13: An example of a place where one will encounter high fees for loans when borrowing money is a _____.
- credit union
- savings and loan association
- pawnshop
- commercial bank
- mutual savings bank
Question 14: _____ are the major products offered by investment companies.
- Interest-bearing checking accounts
- Variable-rate loans
- Credit card accounts
- Savings bonds
- Mutual funds
Question 15: One of the characteristics of a certificate of deposit is that it can have
- high interest-rate risk.
- low safety for savers.
- limited liquidity.
- a variable rate of return.
- no minimum deposit amount.
Question 16: U.S. savings bonds provide the following advantage.
- Interest earned is exempt from federal income taxes.
- Interest earned is deferred for federal tax purposes.
- A constant rate of earnings
- They can be converted to other types of investments.
Question 17: A savings account in which interest is compounded _____ would have the highest effective yield.
- daily
- annually
- semiannually
- monthly
- weekly
Question 18: If a person wants to earn a relatively higher savings rate on his or her money, he or she may select a _____ at a commercial bank
- regular savings account
- regular checking account
- share draft
- money market account
Question 19: Service fees would be _____ in the bank reconciliation process.
- added to the bank statement balance
- subtracted from the bank statement balance
- added to the checkbook balance
- subtracted from the checkbook balance
Question 20: When an individual borrows money to purchase a new home, he or she will be charged a _____.
- prime rate
- discount rate
- mortgage rate
- Treasury bond rate
- corporate bond