TRUE OR FALSE REVIEW

PERSONAL FINANCE

TRUE OR FALSE

Economies of scale is the negative impact growth will have on an economy?

False

Definition of 'Economies Of Scale'

The cost advantage that arises with increased output of a product

TRUE OR FALSE

Net Income can be calculated by multiplying your hourly wage by the number of hours you work.

False

Net Income is the amount of take home pay that remains after payment of taxes and other deductions. Gross Income can be calculated by multiplying your hourly wage by the number of hours you work.

TRUE OR FALSE

Debts are bad

False

Excessive debt is bad however some debt is necessary. Think of the business that borrows money to increase production, think of borrowing money to purchase a home.

TRUE OR FALSE

Diversification will increase risk to your portfolio.

False

A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.

TRUE OR FALSE

Contributions to your 401(k) plan are not taxed.

True

The tax deferment features of a 401k plan are its main advantage

TRUE OR FALSE

Technically, a lease gives you ownership of the property for the life of the lease?

False

Ownership of the property remains with the lessor.

TRUE OR FALSE

Time value of money applies to assets that appreciate and depreciate.

True

TRUE OR FALSE

Cost-benefit analysis helps you identify the product with the cheapest initial cost.

False

Definition of 'Cost-Benefit Analysis'

A process by which business decisions are analyzed. The benefits of a given situation or business-related action are summed and then the costs associated with taking that action are subtracted. Some consultants or analysts also build the model to put a dollar value on intangible items, such as the benefits and costs associated with living in a certain town. Most analysts will also factor opportunity cost into such equations.

TRUE OR FALSE

A debit to your bank account will increase your balance.

True

True or False

Your monthly cell phone bill is reflected on your Credit Report.

False

Neither your on-time Verizon cell phone payments nor any slightly late or stand-alone missed payments will appear on your credit report for the same reason: Verizon only reports mobile phone accounts to the credit bureaus once payments are so late that the account has been closed.