Practice Quiz

FINRA Series 6

Category - Series 6

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A person’s discretionary income is:
  1. the amount that can be allocated to speculative investments.
  2. his income after tax.
  3. the income that he has left to spend or save after having paid taxes on the income and for all of the necessities, e.g., housing, food, clothing, transportation, utilities, etc.
  4. the amount of his income that is needed to pay his regular monthly bills, e.g., rent, food, gasoline, utilities, health insurance, etc.
Explanation
Answer: C - A person’s discretionary income is the income that he has left to spend or save after having paid taxes on the income and for all of the necessities, e.g., housing food, clothing, transportation, utilities, etc. His income after tax is referred to as his disposable income.
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