Basic Finance
Chapter Exam Questions
Course Introduction
Basic Finance introduces students to the fundamental principles and concepts of financial management. The course covers essential topics such as time value of money, financial statement analysis, budgeting, the role of financial markets, risk and return, and basic investment evaluation techniques. Emphasis is placed on understanding the financial decision-making process for individuals and organizations, including topics like capital structure, working capital management, and personal finance. Through practical examples and problem-solving exercises, students gain the skills necessary to analyze financial information and make informed financial decisions in both their professional and personal lives.
Recommended Textbook
Personal Finance 4th Canadian Edition by Jack Kapoor
Available Study Resources on Quizplus
15 Chapters
1246 Verified Questions
1246 Flashcards
Source URL: https://quizplus.com/study-set/3273
Page 2
Chapter 1: Personal Financial Planning in Action
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/64981
Sample Questions
Q1) Briefly explain three types of financial and economic risks that tend to affect everyone.
Answer: Interest rate risk: Changing interest rates affect your costs when you borrow and your benefit when you invest. Inflation Risk: Raising prices causes lost buying power Liquidity Risk: Some investments may be more difficult to convert to cash or to sell without significant loss in value. Product Risk: Products may be flawed or services may not meet your expectations.Retailers may not honour their obligations.
Q2) Inflation reduces the buying power of money.
A)True
B)False Answer: True
Q3) Changes in interest rates don't affect your financial planning. A)True B)False Answer: False
Q4) Household size is a major influence on personal financial planning decisions. A)True
B)False Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Money Management Skills
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/64974
Sample Questions
Q1) To determine a person's solvency,which financial document should be consulted?
A) Cash flow statement
B) Budget
C) Debt consolidation statement
D) Personal balance sheet
E) Credit report
Answer: D
Q2) Definite financial obligations are referred to as variable expenses.
A)True
B)False
Answer: False
Q3) An individual retirement account is an example of a(n)____________ asset.
A) liquid
B) common
C) investment
D) household
E) budgeted
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Taxes in Your Financial Plan
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/64973
Sample Questions
Q1) Estimated quarterly tax installments must be made by those who
A)are employed in a foreign country.
B)receive dividends.
C)work for the government.
D)owe year-end taxes of over $2000 for both the current year and either of the two preceding years.
E)have been caught committing fraud.
Answer: D
Q2) Taxes are not only considered in financial planning in April.
A)True
B)False
Answer: True
Q3) Real-estate property taxes are significant but not a major source of revenue for local governments.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Financial Services: Savings Plans and Payment Accounts
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/64972
Sample Questions
Q1) The funds deposited in a chequing account can be restricted for use by A)a holding period.
B)outstanding cheques.
C)interest earned.
D)service charges.
E)electronic banking.
Q2) Based on the following information,what amount would be SUBTRACTED from the BANK BALANCE side of a chequing account reconciliation? Service charge
$6,Outstanding cheques $260,Interest $3.00,Deposit in transit $65
A)$260
B)$65
C)$67
D)$68
E)$266
Q3) Time deposits are more commonly referred to deposits made to savings accounts and investment certificates.
A)True
B)False
Q4) What are the main types of financial institutions used by consumers?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Consumer Credit: Advantages, Disadvantages,
Sources, and Costs
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/64971
Sample Questions
Q1) When a creditor looks at the borrower's attitude toward credit obligations,which of the 5 Cs of credit is she analyzing?
A) Capacity
B) Capital
C) Character
D) Collateral
E) Conditions
Q2) The borrower's attitude toward his or her credit obligations is called A) capacity.
B) capital.
C) character.
D) collateral.
E) conditions.
Q3) "Shopaholics" and young adults are most vulnerable to misusing credit.
A)True
B)False
Q4) How can you protect yourself against credit/debit card fraud?
Q5) What are the two general rules of measuring credit capacity?
Q7) How do creditors determine your credit-worthiness? Page 7
Q6) What are the two basic types of credit? Give examples of both.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 6: Consumer Purchasing Strategies and Wise
Buying of Motor Vehicles
Available Study Resources on Quizplus for this Chatper
87 Verified Questions
87 Flashcards
Source URL: https://quizplus.com/quiz/64970
Sample Questions
Q1) Credit costs usually do not vary.
A)True
B)False
Q2) What can you do if you are unable to meet your credit obligations?
Q3) Banks often encourage you to make the maximum payment.
A)True
B)False
Q4) After you have selected a product,you should buy it immediately before the store runs out of it.
A)True
B)False
Q5) Consumer credit counseling services are basically concerned with A) lending the money to destitute people.
B) giving debtors food and shelter.
C) helping destitute debtors to relocate in less expensive areas.
D) preventing and solving the problems related to credit overextension.
E) getting you more credit
B)False Page 9
Q6) The fairest method of calculating interest is the average daily balance method. A)True
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 7: Selecting and Financing Housing
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/64969
Sample Questions
Q1) Renting would be most appropriate for people who
A) have limited funds currently available.
B) have difficulty establishing credit.
C) want to reduce their taxes.
D) enjoy remodeling their residence.
E) desire the financial benefits of increased equity.
Q2) Which of the following would increase the speed of equity growth for a homebuyer?
A) making a down payment of 10 percent instead of 20 percent
B) obtaining a mortgage interest rate of 9 percent instead of 8 percent
C) obtaining a 15-year mortgage instead of a 30-year mortgage
D) making larger deposits to the escrow account
E) making smaller deposit to the escrow account
Q3) Financial guidelines suggest that you should "spend no more than 10 to 20 percent of your take home pay on housing".
A)True
B)False
Q4) What factors influence the type of housing a family will select?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Home and Automobile Insurance
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/64968
Sample Questions
Q1) Purchasing a technology stock that may or may not increase in price is an example of ___________ risk.
A) speculative
B) pure
C) commercial
D) personal
E) liability
Q2) Most home insurance policies provide coverage for
A) earthquake damage.
B) flood damage.
C) an umbrella liability.
D) basic personal liability.
E) medical payments.
Q3) A home made of wood is more expensive to insure than a comparable brick structure.
A)True
B)False
Q4) What factors affect the cost of home insurance?
Q5) Which type of automobile insurance is usually considered to be most important?
Page 12
Q6) What events are commonly covered in a homeowner's insurance policy?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Health and Disability Income Insurance
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/64967
Sample Questions
Q1) Which of the following is not an important trade off in purchasing disability income insurance?
A) waiting period
B) amount of down-payment
C) duration of benefit.
D) accident and sickness coverage.
E) guaranteed renewability.
Q2) In most cases,your employer pays part or all of the cost of disability income protection plan.
A)True
B)False
Q3) Disability income insurance benefits provide regular cash income lost by employees as the result of an accident,illness,or pregnancy.
A)True
B)False
Q4) Most people buy life insurance to protect someone who depends on them from financial losses caused by their death.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 10: Financial Planning With Life Insurance
Available Study Resources on Quizplus for this Chatper
93 Verified Questions
93 Flashcards
Source URL: https://quizplus.com/quiz/64980
Sample Questions
Q1) Choose four of the investment alternatives presented in Chapter 10 and describe how the factors of safety,risk,income,growth,and liquidity affect that investment alternative.
Q2) Once you have painstakingly developed a financial plan,it is not wise to change it.
A)True
B)False
Q3) For an investor who wants to speculate,which of the following investments would be appropriate?
A) red-chip stocks
B) options
C) utility stocks
D) corporate bonds
E) preferred stock issues
Q4) The fees for investor services and newsletters may range between $30 and $750 a year.
A)True
B)False
Q5) Describe the sources of investment information investors can use to evaluate a potential investment.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 11: Investing Basics and Evaluating Bonds
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/64979
Sample Questions
Q1) MasterCracked Manufacturing has after-tax profits that total $725,000.If the firm has 250,000 shares,what is the amount of earnings per share?
A) $1.25
B) $2
C) $2.90
D) $2.50
E) It is impossible to calculate earnings per share with this information.
Q2) The price-earnings ratio is calculated by dividing the earnings per share of a stock by its fair market value.
A)True
B)False
Q3) A large-cap stock is a stock issued by a company that has capitalization of $150 million or less.
A)True
B)False
Q4) The NASDAQ is an electronic marketplace for over 10,000 different stocks.
A)True
B)False
Q5) What is the primary difference between common stock and preferred stock?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 12: Investing in Stocks
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/64978
Sample Questions
Q1) In reality,there is no guarantee that convertible bondholders will convert to common stock even if the price of the common stock does increase.
A)True
B)False
Q2) The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 8 percent,what is the approximate market value for the 6 percent bond?
A) $1,000
B) $800
C) $750
D) $600
E) $500
Q3) A bond with a price quotation of 100 sells for $100.
A)True
B)False
Q4) A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 13: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/64977
Sample Questions
Q1) Which of the following factors would not affect the relationship between an individual's investment goals and the goals of a mutual fund?
A) the investor's age
B) the investor's family situation
C) the investor's income
D) the investor's future earning power
E) the investor's age,the investor's family situation,the investor's income,and the investor's future earning power would affect the relationship between an investor's investment goals and the goals of a mutual fund.
Q2) A mutual fund that invests in investment grade corporate and government debt is called a(n)____________ fund.
A) balanced
B) equity
C) segregated
D) income
E) bond
Q3) Index funds are bought at beginning-of-day prices.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 14: Starting Early: Retirement and Estate Planning
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/64976
Sample Questions
Q1) Your expenses for leisure activities will probably increase during retirement.
A)True
B)False
Q2) Your first step in retirement planning is to:
A) estimate your spending needs.
B) analyze your current assets and liabilities.
C) adjust your spending needs for inflation.
D) evaluate your planned retirement income.
E) determine if you'll have to work during retirement.
Q3) What is the importance of retirement planning?
Q4) Why is it important to review your assets and liabilities before your retirement?
Q5) When you are nearing retirement,it is a good idea to:
A) increase the face value of your life insurance.
B) increase your property insurance coverage.
C) keep your life insurance intact.
D) decrease the face value of your life insurance.
E) swap your old life insurance policy with a new one.
Q6) What types of retirement living expenses can be lowered or eliminated?
Q7) What types of expenses might increase during retirement?
Page 18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Daily Spending Diary
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/64975
Sample Questions
Q1) Estate planning involves
A) handling your property while you are alive.
B) dealing with what happens to your property after your death.
C) your family's financial security in the event of your death.
D) your family's financial security in the event of your spouse's death.
E) handling your property while you are alive; planning how your property will be distributed after your death; and planning your family's financial security in the event of your death or your spouse's death are all part of estate planning.
Q2) What are the legal aspects of estate planning?
Q3) Estate planning is useful only to rich and elderly people.
A)True
B)False
Q4) Which of the following is not a potential tax that may be incurred at death?
A) income tax due to deemed disposition rules
B) provincial probate taxes
C) estate taxes
D) U.S.estate taxes on U.S.assets
E) Canadian estate taxes on U.S.assets
Q5) How do wills and trusts help in planning your estate?
To view all questions and flashcards with answers, click on the resource link above. Page 19