FM Unit 1 Test Review

Front

What is 6% of a monthly net pay of $3,437.50?

Back

$206.25

Front

What is 9% of a monthly net pay of $3,437.50?

Back

$309.38

Front

Why is insurance a method of managing risk?

Back

Insurance limits a person’s financial loss if an asset is lost, stolen, or damaged.

Front

Is net income a higher dollar amount than gross income?

Back

False

Front

What does a financial plan NOT include?

Back

Bankruptcy

Front

Define net pay.

Back

Net pay is the amount of money an employee takes home after deductions such as taxes and insurance.

Front

What is gross income?

Back

Gross income is the total income earned before any deductions.

Front

What is the purpose of budgeting?

Back

Budgeting helps individuals plan their finances by tracking income and expenses.

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses remain constant each month, while variable expenses can change.

Front

What is the importance of saving for retirement?

Back

Saving for retirement ensures financial security in later years when income may be reduced.