1.   All of the following are benefits of a 401 (k) retirement plan except:

            A)   funds can be withdrawn at any time.

            B)   earnings are tax-deferred.

            C)   contribution into the plan reduces your taxable income.

            D)   employers will often match part of the employee's contribution.

      2.   Preparing and living with a personal budget is:

            A)   not necessary if your have sufficient income.

            B)   similar to activities needed to handle the finances of a small business.

            C)   often times more effort than the benefit received.

            D)   an excellent technique to prepare for a career in accounting.

      3.   Investing in a home is generally considered:

            A)   a poor choice when compared to renting.

            B)   a wise investment.

            C)   a luxury that should be postponed as long as possible.

            D)   a good decision only if paid in full with cash.

      4.   The number of workers paying into social security for each retiree receiving social security benefits is:

            A)   fixed by law.    B)  increasing.    C)  decreasing.    D)  relatively constant.

      5.   When purchasing with a credit card, it's important to remember that ________ after the first 25 or 30 days.

            A)   payment in full is due    B)  no returns are allowed    C)  interest is charged    D)  savings are available

      6.   According to the boxed material entitled Spotlight On Small Business, women entrepreneurs often find:

            A)   difficulty in getting access to credit.

            B)   they are not eligible for special programs available to minorities.

            C)   success in providing goods and services to the government.

            D)   fulfillment and independence that would not be possible when working for someone else.

      7.   As an employee of New Hampshire Industries, Kathleen has an opportunity to invest pre-tax income in an employer-sponsored retirement plan.  Her employer will contribute 50 cents for every dollar that Kathleen contributes to this fund. This is an example of a(n):

            A)   IRA plan.    B)  401 (k) plan.    C)  Keogh plan.    D)  social security plan.

      8.   For a young person, one of the worst place to keep your long-term investments is in a:

            A)   duplex.    B)  bank.    C)  share of Microsoft stock.    D)  share of General Motors stock.

      9.   The increase in the number of retirement plans approved by the federal government likely indicates that:

            A)   the government budget is approaching a surplus.

            B)   most people have faith in the troubled social security system.

            C)   social security cannot be counted on to provide an individual with ample funds for retirement.

            D)   we enjoy the value of saving more and consuming less now.

    10.   Given a tax rate of 28%, what is the after-tax cost of a $2,000 contribution to a traditional IRA?

            A)   $  560    B)  $1,440    C)  $2,000    D)  zero

    11.   According to the boxed material entitled Making Ethical Decisions, if a court declares that you are bankrupt after you knowingly piled up debts for luxuries and vacations, you will likely:

            A)   have to repay most of your debts.

            B)   have to repay all of your debts incurred for non-necessities.

            C)   work out a repayment plan with the government and your creditors.

            D)   be forgiven of all or most of the debt.

    12.   A likely result of the problems in the social security system is that we will have:

            A)   higher social security taxes.                                           C)   a younger retirement age.

            B)   expanded cost-of-living adjustments.                             D)   enhanced benefits.

    13.   A contract that calls for regular payments to an individual for life or for a fixed period of time is called a(n):

            A)   annuity.    B)  retirement provision.    C)  mutual fund.    D)  credit card with payback provisions.

    14.   Which of the following would be the best investment?

            A)   A small home in a great location.                                   C)   A large home in a deteriorating neighborhood.

            B)   A saving account in a bank.                                          D)   A moderate size home in a rural setting.

    15.   A Roth IRA offers employees an incentive to save for their retirement by:

            A)   deferring taxes on income contributed to the IRA.

            B)   eliminating taxes on the withdrawals from the IRA.

            C)   eliminating taxes on the income contributed to the IRA.

            D)   deferring taxes on the earnings of the IRA.

    16.   All of the following are options available for an IRA except:

            A)   stocks.    B)  bonds.    C)  small business loans.    D)  mutual funds.

    17.   Which of the following is an indication that the government has recognized that social security benefits are insufficient to provide funds for a comfortable retirement?

            A)   The government has provided cost of living adjustments to social security recipients.

            B)   The government has invested the contributions in high yielding investment securities.

            C)   The government has established incentives for workers to save their own money for retirement.

            D)   The government has worked to balance the federal budget.

    18.   Which of the following is a disadvantage of credit cards?

            A)   They can be used to record purchases for income tax and financial planning purposes.

            B)   They may offer consumers a cash payback.

            C)   They are used by businesses for identification and assured payment.

            D)   They enable consumers to easily spend more than they are able to pay.