What Do You Know? Quiz #5

Taking Stock of Your Personal Finances

by Cynthia Needles Fletcher, Ph.D.
Iowa State University Extension
Associate Professor
Human Development and Family Studies

Here's how our quiz works.

Every two to three weeks a different Iowa State University Extension staff person will present a challenging quiz on an interesting consumer-oriented topic. To play the "game," all you have to do is think about the answers to the questions. You can check your answers by clicking your mouse on the highlighted word or phrase in each question. It's an open book type of game. You can grade your own paper.

Good Luck with the "What Do You Know?" quiz. Drop Cynthia Fletcher an e-mail message and tell her how you like the quiz.

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This is the time of year when money is on everyone's mind. Holiday bills are due, 1099 forms and IRS instruction booklets are filling our mailboxes, and decisions about IRAs and 403(b) retirement funds are being made. It's a good time to take stock of your knowledge of personal finance.

1. Who said, "The income tax has made more liars out of the American people than golf has?"

a. Steve Forbes

b. Benjamin Franklin

c. Arnold Palmer

d. Will Rogers

2. Capital gains are currently treated the same as ordinary income for federal tax purposes.

True or False

3. It's a good idea to have an emergency fund equal to three to six months' living expenses.

a. True

b. False

c. It Depends

4. Let's say you have a $2,000 balance at 18 percent on your credit card. The issuer announces that it has slashed the required minimum payments to just 2 percent of the outstanding balance. If you make these minimum payments, how long will it ta ke to pay off this debt?

a. 3 years

b. 5 years

c. 10 years

d. 31 years

5. How much interest will you pay on this credit card debt (refer to question 4)?

a) $360

b) $400

c) $2,931

d) $4,931

6. Suppose you have a $50,000 home mortgage at 8 percent and your monthly payment is $375. How much interest could you save if you added $100 each month to the payment?

a. $10,000

b. $20,500

c. $37,500

d. $50,000

7. If you had your nest egg invested in the average diversified U.S. stock mutual fund in 1995, your money would have gained

a. 8 percent

b. 18 percent

c. 28 percent

d. 31 percent

8. "Advance directives" are

a. disclosure forms required by law prior to the signing of real estate contracts

b. documents that enable you to make decisions about your medical care in the future

c. the actual name given to the instructions that flash on the screen at ATM machines

d. all of the above

9. This really is the "golden age" of retirement. The majority of retirees receive a pension income.

True or False

10. The most bitter squabbles about money have occurred over

a. failure to record ATM withdrawals in check registers

b. decisions to "do it myself" versus hiring a professional

c. tax returns

d. all of the above

For more information on family finances, the following Iowa State University Extension publications are available at your local ISU Extension Office or through Extension Distribution:

Money Mechanics (Pm-1452 to Pm-1463), a 12-part introduction to family finances. Single copies free.

Getting Organizes (Pm-1121), a booklet full of forms to organize permanent records. Cost: $2.00

Taking Control of Life and Death Health Care Decisions (NCR 398), a self-study course to learn more about advanced directives. Cost: $12.50