Family Financial Management
Chapter Exam Questions
Course Introduction
Family Financial Management explores the principles and practices involved in effectively managing the financial resources of families across the life cycle. The course covers topics such as budgeting, saving, investing, credit use, insurance, retirement planning, and tax considerations, all within the context of diverse family structures and changing economic environments. Emphasis is placed on goal-setting, decision-making, and the development of strategies to achieve financial stability and well-being for individuals and their families.
Recommended Textbook
Focus on Personal Finance An Active Approach to Help You 4th Edition by Jack R. Kapoor
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14 Chapters
1753 Verified Questions
1753 Flashcards
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Page 2
Chapter 1: Personal Financial Planning in Action
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) Financial decisions related to income include all of the following except
A) Spending
B) Saving
C) Sharing
D) Taking
E) All of these are financial decisions
Answer: D
Q2) What are the main activities of personal financial planning?
Answer: The main components of personal financial planning are obtaining,planning,saving,borrowing,spending,managing risk,and investing,as well as retirement and estate planning.
Q3) The step in the personal financial planning process that follows "Create and implement your financial action plan" is
A) Review and revise your financial plan
B) Identify alternative courses of action
C) Determine your current financial situation
D) Evaluate your alternatives
E) Develop your financial goals
Answer: A
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Page 3
Chapter 2: Money Management Skills
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111 Flashcards
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Sample Questions
Q1) Given the following information from June 30,2012,calculate cash inflows,cash outflows,and cash surplus or deficit for Tim Carter: Answer: 11ea6ea1_4fd5_4bb6_8f54_7f3d77300809_TB2409_00 Cash inflows = SalaryDeductions + Interest earned = $5,500 - 1,700 + 75 = $3,875
(Note: The book example shows deductions being reduced from gross salary to determine net salary in calculating cash inflows.)
Cash outflows = Rent + Parking + Food and dining out + Clothing + Insurance + Cell phone = $1,000 + 250 + 395 +150 + 200 + 100 = $2,095.
Cash surplus = Cash inflows less cash outflows = $3,875 - 2,095 = $1,780.
Q2) In an organized system,birth and marriage certificates belong in a safe deposit box. A)True B)False
Answer: True
Q3) One method to spend more money is to use a direct deposit system from payroll. A)True
B)False Answer: False
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Page 4
Chapter 3: Taxes in Your Financial Plan
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119 Flashcards
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Sample Questions
Q1) The maximum amount (in 2010)that an individual can give another in a year without being subject to federal taxes is
A) All gifts are taxable.
B) $10,000.
C) $13,000.
D) $15,000.
E) No gifts are taxable.
Answer: C
Q2) The average tax rate is the taxes paid on the next dollar of income.
A)True
B)False
Answer: False
Q3) Which of the following is NOT a tax credit?
A) Adoption tax credit
B) Domestic tax credit
C) Earned income credit
D) Foreign tax credit
E) Retirement tax credit
Answer: B
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Page 5
Chapter 4: Financial Services: Savings Plans and Payment Account
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Earnings on savings can be measured by the A) Compounding.
B) Liquidity.
C) Minimum deposit.
D) Rate of return.
E) Safety.
Q2) When Imogene brought a necklace to a _______,she received a loan based on its value.
A) commercial bank
B) check-cashing outlet
C) pawnshop
D) payday loan facility
E) rent-to-own center
Q3) Money market funds are not covered by federal deposit insurance.
A)True
B)False
Q4) The FDIC insures a depositor's savings account up to $200,000 per insured financial institution.
A)True
B)False
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Chapter
Sources, and Costs
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) Consumer credit refers to the use of debit cards for personal needs.
A)True
B)False
Q2) The higher your FICO score,the more risk you pose to creditors.
A)True
B)False
Q3) Which of the following items should be shredded to protect yourself from identity theft?
A) Magazines
B) Papers with personal information
C) Envelopes
D) Privacy notices that are received with credit card statements
E) Newspaper ads
Q4) When used effectively,credit can help a consumer have more and enjoy more.
A)True
B)False
Q5) The first sign of stolen identity might be that you get bills for a credit card account that you never opened.
A)True
B)False
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Chapter 6: Consumer Purchasing Strategies and Wise
Buying of Motor Vehicles
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) Abigail checked out brands and prices of blue jeans at several stores.She was comparison shopping.
A)True
B)False
Q2) A fixed operating cost for a vehicle is
A) Depreciation.
B) Gasoline and oil.
C) Maintenance and repairs.
D) Parking.
E) Tires.
Q3) The average used car costs about _______ less than the average new car.
A) $0
B) $1,000
C) $10,000
D) $25,000
E) $50,000
Q4) One of the first steps in a car purchase negotiation should be a discussion of the trade-in vehicle.
A)True B)False
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Chapter 7: Selecting and Financing Housing
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Sample Questions
Q1) When Nancy buys her house,the mortgage company will probably conduct a(n)
A) Appraisal.
B) Contingency clause.
C) Dual agent.
D) Earnest money.
E) Purchase agreement.
Q2) Lonnie wanted to sell his house but didn't know what price to ask.He should consider all of the following except
A) Current mortgage rates.
B) Demand in the housing market.
C) His original cost.
D) Recent selling prices of comparable homes in the area.
E) The appraised value of his home.
Q3) Elaine purchased her living unit in a building with five other separate units.She purchased a
A) Condominium.
B) Duplex.
C) Manufactured home.
D) Single-family dwelling.
E) Townhouse.
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Chapter 8: Home and Automobile Insurance
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115 Flashcards
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Sample Questions
Q1) If you choose to avoid the risk of a traffic accident by not driving to work,you are using
A) Risk avoidance.
B) Risk reduction.
C) Risk assumption.
D) Risk shifting.
E) Risk increasing.
Q2) List three types of coverage in a homeowner's insurance policy.
Q3) Emergency road service coverage includes coverage for a tow to a service station as well as repairs to make the vehicle drivable.
A)True
B)False
Q4) The actual cash value method of settling claims is based on the replacement cost of an item less depreciation.
A)True B)False
Q5) A household inventory should be stored in a home office. A)True B)False
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Chapter 9: Health and Disability Income Insurance
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Sample Questions
Q1) Georgia has a health insurance policy that includes a deductible of $600 and a coinsurance of 20%.If her total bill is $4,000,how much will she be required to pay?
A) $400
B) $600
C) $1,200
D) $1,280
E) $3,400
Q2) With a guaranteed renewable health insurance policy,the insurer is permitted to raise premiums for all members of a group.
A)True
B)False
Q3) A health reimbursement account is an employer-funded plan.
A)True
B)False
Q4) Some policies consider the average fee for a service in a particular geographical area.They then use that amount to set a minimum payment for policyholders.
A)True
B)False
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Page 11
Chapter 10: Financial Planning With Life Insurance
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Sample Questions
Q1) People buy life insurance for many reasons.List three of these reasons.
Q2) Don and Diane are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family,which includes two children,ages 5 and 9.They have determined that their annual income is $65,000 and their net worth is now $150,000.Using both the easy method and the "nonworking" spouse method,calculate the amount of life insurance they should carry.Remember that they want to be certain that they have enough coverage,so
Q3) If you change your mind about your insurance policy,you have 60 days to return it to receive a refund of your premium.
A)True
B)False
Q4) Explain three of the following riders:
a.Waiver of premium disability benefit.
b.Accidental death benefit.
c.Guaranteed insurability option.
d.Cost-of-living protection.
e.Accelerated benefits.
f.Second-to-die.
Q5) Compare and contrast life insurance and annuities.
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Chapter 11: Investing Basics and Evaluating Bonds
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) When comparing the interest rates for U.S.government securities,which of the following is correct?
A) Treasury bonds < Treasury bills < Treasury notes
B) Treasury bills < Treasury notes < Treasury bonds
C) Treasury notes < Treasury bills < Treasury bonds
D) Treasury bills < Treasury bonds < Treasury notes
E) Treasury bonds < Treasury notes < Treasury bills
Q2) The taxable equivalent yield for a municipal bond will be lower than the tax-exempt yield for that bond.
A)True
B)False
Q3) The potential return of any investment should be directly related to the risk that the investor assumes.
A)True
B)False
Q4) List five items that appear in a corporate bond quote.
Q5) The usual face value of a corporate bond is $100.
A)True
B)False
Q6) If a bond is quoted at a price of 108,what is its current price?
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Chapter 12: Investing in Stocks
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Sample Questions
Q1) Megan decided to start investing in stocks.Which of the following should she do first?
A) Base her investing decisions on hot tips she hears at work.
B) Buy stocks based solely on her stockbroker's recommendation.
C) Choose stocks based on recommendations from her family members.
D) Pick stocks at random.
E) Research the corporations she is interested in as well as their industries.
Q2) A.J.wants to buy a stock at its current market price.He should use a market order.
A)True
B)False
Q3) Which of the following is some of the information found on a financial website such as www.finance.yahoo.com?
A) Company name, last price, target price, price change.
B) 52-week price range, number of shares traded (volume).
C) Market capitalization.
D) Dividend paid and yield.
E) All of this information is included.
Q4) Is the Internet a valid tool to use for evaluating stocks?
Why or why not?
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Page 14
Chapter 13: Investing in Mutual Funds
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101 Flashcards
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Sample Questions
Q1) A contingent deferred sales load is known as all of the following except
A) Back-end load.
B) B fund.
C) Redemption fee.
D) Only two of these are correct.
E) All of these are correct.
Q2) What percentage of all mutual funds are closed-end funds?
A) 6%
B) 13%
C) 36%
D) 85%
E) 93%
Q3) Which class of shares charges a commission when shares are purchased?
A) A
B) B
C) C
D) K
E) Q
Q4) What are the two primary reasons that investors purchase mutual funds?
Q5) How is the price per share for open-end mutual funds determined?
Page 15
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Chapter 14: Starting Early: Retirement and Estate Planning
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144 Flashcards
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Sample Questions
Q1) Explain the importance of an executor and a guardian.
Q2) Only one will may legally be written during a person's lifetime.
A)True
B)False
Q3) About one out of every three Americans currently collects some form of Social Security benefit.
A)True
B)False
Q4) What percentage of American workers are covered by Social Security?
A) 15%
B) 50%
C) 78%
D) 97%
E) 100%
Q5) David went to his Uncle Edward for advice about spending money in retirement.What advice would you expect Uncle Edward to share about specific types of expenses that probably will increase or will decrease?
Q6) When should you review and possibly rewrite your will?
Q7) Under what circumstances would a rollover IRA be appropriate?
Q8) Describe a defined contribution plan.
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