True or false

Question 1

It is possible that canceling an old credit card with no balance due could hurt your credit score.

Answer 1

True

Question 2

If an individual gets several quotes on a new mortgage within a two week period, it should not immediately impact their credit score. The credit score may later be impacted by the size of the mortgage and related monthly payments.

Answer 2

True

Question 3

True or False?

Having mortgage debt is generally considered better than having credit card debt.

Answer 3

True

Question 4

True or False?

It is illegal for an employer to review your credit report as part of the application process.

Answer 4

False

Question 5

True or False?

Insurance companies are allowed to review and consider your credit score before quoting a premium.

Answer 5

True

Question 6

True or False?

Assume you have three credit cards, each having a balance due of $500 for a total of $1,500. Each card has a different interest rate ranging from 12% to 20%. The minimum payment on each card is $10. If the minimum payment is not made, there is a $50 penalty.

If you only have $500 to pay on your credit cards this month, the best way to minimize your interest cost is to pay an equal amount of money on each card.

Answer 6

False

Question 7

True or False?

Studies show that most Americans have saved a sufficient amount saved in their 401-K accounts to enjoy a comfortable retirement.

Answer 7

False

Question 8

True or False?

In general, applying for and receiving new credit cards will tend to decrease your FICO score.

Answer 8

True

Question 9

True or False?

Assume that your parents have more liabilities than assets as a result of a $100,000 of credit card debt. In the event of their death, the children will inherit the credit card debt.

Answer 9

False

Question 10

True or False?

Borrowing on your 401-K plan is generally considered a good financial move.

Answer 10

False

Question 11

True or False?

You should always shop for a car loan before seeing the dealer, since the loan rates offered by dealers can be manipulated against the profit on the car and the value of the trade-in.

Answer 11

True

Question 12

True or False?

Debit cards have fewer protections if lost compared to credit cards, but credit cards can result in significant financial difficulties for individuals who misuse the card and incur credit card debt.

Answer 12

True

Question 13

True or False?

It is generally a good idea to co-sign a loan for another individual in the event they do not qualify for a loan.

Answer 13

False

Question 13

True or False?

A flat or inverted yield curve often signals a recession.

Answer 13

True

Question 14

True or False?

Consumers are allowed by law to receive a free copy of their credit report twice a year from each of the three credit reporting agencies.

Answer 14

False

Question 15

True or False?

Most experts recommend that consumers “freeze” their credit files as a result of recent data leaks at Equifax.

Answer 15

True

Question 16

True or False?

Incurring significant amounts of student debt will impact your future borrowing power for a home or car loan.

Answer 16

True

Question 16

True or False?

One of the best investments you can make is paying down high interest rate credit card debt. Essentially you are receiving a high after tax return risk free.

Answer 16

True

Question 17

True or False?

If you buy a larger size of a product, the price per unit (such as price per ounce) will always be lower.

Answer 17

False

Question 18

True or False?

The price per unit of items bought in a warehouse club such as Sams or Costco will always be lower than a regular retail store.

Answer 18

False

Question 19

True or False?

Retailers commonly offer new items at significantly higher prices, then plan to market the goods down later to ultimately achieve the desired gross margin goal.

Answer 19

True

Question 20

True or False?

In most cases, service warranty contracts provide excellent protection and are generally good deals.

Answer 20

False

Question 21

It is never a good idea to prepay something for a discount due to the risk involved.

Answer 21

False

Question 22

True or False?

When shopping for a car, you should immediately offer your current car as a trade-in to strengthen your bargaining power.

Answer 22

False

Question 23

True or False? Zero percent financing is always a great deal since a zero percent interest rate is lower than any bank would ever offer.

Answer 23

False

Question 24

True or False? Is is always advisable to have your auto financing arranged in advanced before you start negotiating on a car.

Answer 24

True

Question 25

True or False? Leasing cars is generally much cheaper than buying cars since the payment is so much lower.

Answer 25

False

Question 26

True or False? PITI stands for principal, interest, taxes and insurance.

Answer 26

True

Question 27

True or False? A homeowner decides to get a second mortgage at 7% to pay down credit card debt with an interest rate of 20%. While this appears to be a good move, the primary risk is that the homeowner could lose his/her home if they fail to make payments on the new second mortgage.

Answer 27

True

Question 28

True or False? When purchasing a home, homeowners should always get a building inspection in advance and purchase title insurance.

Answer 28

True

Question 29

True or False? The key to successful investing is asset class allocation, diversification, and appropriate use of taxable, tax deferred and tax free accounts.

Answer 29

True

Question 30

True or False? Average returns should always be used when evaluating stock performance since they are more accurate than geometric returns.

Answer 30

False

Question 31

True or False? If an investment advisor is acting as a fiduciary, then he or she is obligated to offer you financial products that are in your best interest. This means that fiduciaries are NOT likely to offer you "load" funds or mutual funds with high fees since these types of funds provide high commissions to the advisor and are not usually in your best interest.

Answer 31

True

Question 32

True or False? Most professional portfolio managers can't beat the returns of index funds over the long term.

Answer 32

True

Question 33

True or False? One can reduce the risk of out living your savings by starting to save early in life rather than in your 40s and 50s.

Answer 33

True

Question 34

True or False? If all of your money was invested in the S&P 500 Index, you would still have systematic or market risk as well as investment style risk.

Answer 34

True

Question 35

True or False? It is always a good idea to purchase disability insurance if offered by your employer.

Answer 35

True

Question 35

True or False? Recent money flows indicate that more money is moving from active to passive management (index funds) since most professional investors can not beat the market indexes over a long period of time.

Answer 35

True

Question 36

True or False? Studies show that day traders are usually well diversified and can achieve a higher return than professional Wall Street traders.

Answer 36

False

Question 37

True or False? If you resign from a job, you will not be entitled to unemployment compensation.

Answer 37

True

Question 38

True or False? Unused savings in a Health savings accounts (HSA) can be carried forward to future years. Unused savings can be invested and HSAs can only be used for PPO plans.

Answer 38

False

Question 39

True or False? The rules for flexible spending accounts generally require that employees use the money within the current year or forfeit unused savings.

Answer 39

True

Question 40

True or False? When you leave your job, you should always rollover your 401-K assets to a self directed rollover IRA.

Answer 40

True

Question 41

True or False? Most corporate (for profit) employers provide a pension benefit for their new employees.

Answer 41

False