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WISE TEST QUESTIONS &
ANSWERS
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Question: What is the definition of budget variance?
CORRECT ANSWER : the difference between the
budgeted amount and the actual amount that you spend
Question: What does the debt ratio show?
CORRECT ANSWER : shows the relationship between
debt and net worth.
Question: What does a lower debt ratio indicate?
CORRECT ANSWER : The lower the ratio the better off
financially the person is.
Question: How is the debt ratio calculated?
CORRECT ANSWER : calculated by dividing liabilities
by net worth
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Question: What is an excise tax?
CORRECT ANSWER : government imposes a tax on
specific goods and services such as alcohol, cigarettes, gasoline, and airline
Question: What are capital gains?
CORRECT ANSWER : are profits made from the sale of
capital assets such as stocks and bonds
Question: When are capital gains tax deferred?
CORRECT ANSWER : tax deferred until the asset is sold,
Question: How are long-term capital gains taxed?
CORRECT ANSWER : If held over one year are
considered long-term capital gains and are taxed at a lower tax rate or in some cases are not taxed at all.
Question: What are variable expenses?
CORRECT ANSWER : change from one period to
another, examples Electricity and food expenditures
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Question: Which option will help you the least in
managing your money?
CORRECT ANSWER : get advice from your friends
Question: What is financial planning?
CORRECT ANSWER : the process of developing and
implementing a coordinated series of actions to achieve financial success.
Question: What should financial plans need to be?
CORRECT ANSWER : need to be reviewed and adjusted
to accommodate changing needs and goals.
Question: What is an emergency fund?
CORRECT ANSWER : Should be an important
consideration when saving money
Question: What does liquidity refer to?
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CORRECT ANSWER : being in cash or easily convertible
to cash, How easily an asset can be converted into cash
Question: What factors does Social Security benefits
depend on?
CORRECT ANSWER : benefits depends on the person's
earnings over a lifetime of work
Question: What type of credit do department store charge
cards offer?
CORRECT ANSWER : open-end credit
Question: What is a mortgage loan?
CORRECT ANSWER : closed-end credit, made at a
specified interest rate for a specified time period.
Question: What is a collateralized loan?
CORRECT ANSWER : A loan that is secured by
collateral, properties or assets that are subject to seizure on default.