Family Financial Management Test Preparation
Course Introduction
Family Financial Management explores the principles and practices necessary for effective financial decision-making within families. The course covers topics such as budgeting, saving, investing, credit management, insurance, retirement planning, and understanding financial products and services. Students will learn how to analyze financial situations, develop short- and long-term financial goals, and create comprehensive plans to achieve financial stability and security. Emphasis is placed on the impact of life stages, economic conditions, and cultural factors on family financial choices, equipping students with practical skills for managing household finances responsibly.
Recommended Textbook
Personal Finance 2nd Edition by Robert B. Walker
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17 Chapters
1143 Verified Questions
1143 Flashcards
Source URL: https://quizplus.com/study-set/3290
Page 2
Chapter 1: Money Matters: Values, vision, mission, and You
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) What is the "best" career?
A)Making lots of money
B)Doing something you love and are passionate about
C)Doing something you do not like
D)Doing nothing
Answer: B
Q2) The acronym for setting good goals is SMART.What does each letter in SMART stand for?
A)Smart,Measurable,Attainable,Real,Time
B)Specific,Measurable,Attainable,Reliable,Time
C)Specific,Measurable,Attainable,Realistic,Time
D)Serious,Measurable,Attainable,Reachable,Time
Answer: C
Q3) A personal mission statement reflects
A)your strengths.
B)your passions.
C)your stakeholders.
D)All of the options are correct.
Answer: D
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Page 3
Chapter 2: Planning and Budgeting
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63 Verified Questions
63 Flashcards
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Sample Questions
Q1) The median annual earnings for full-time workers age 25 and older in 2009 was $8,805 higher for someone with an associate's degree than for someone with A)a bachelor's degree.
B)a high school degree.
C)a graduate degree.
D)a PH.D.
Answer: B
Q2) An easy form of sticking to a budget is to have envelopes for every category in your budget and to place cash in each envelope to match your budgeted amount.
A)True
B)False
Answer: True
Q3) Which is an example of an asset?
A)Student loans
B)Car payments
C)Laptop
D)Electricity bill
Answer: C
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Chapter 3: Financial Instruments and Institutions
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74 Verified Questions
74 Flashcards
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Sample Questions
Q1) Which of the following is known as a negotiable instrument?
A)Checks
B)Cash
C)Credit card
D)Debit card
Answer: A
Q2) What are financial intermediaries?
A)They accept money for deposits and then lend the money for a profit.
B)They provide a place to discuss money.
C)They provide a place to think about and consider investments.
D)Wall Street firms
Answer: A
Q3) What are 529 plans?
A)Qualified tuition plans
B)Prepaid tuition plans
C)College savings plans
D)Both prepaid tuition plans and college savings plans
Answer: D
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Chapter 4: Time Value of Money
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55 Verified Questions
55 Flashcards
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Sample Questions
Q1) The process of discounting involves knowing how much money you would have had to deposit today in order to have a specific amount in the future.
A)True
B)False
Q2) Each dollar bill has a serial number starting with the letter of the district in which it was printed.
A)True
B)False
Q3) The process whereby the value of an investment increases exponentially over time is called:
A)annual percentage rate
B)time value
C)annual percentage yield
D)compounding
Q4) The APY earned on $10,000 at 12% interest compounded monthly over the course of one year is the same rate as if compounded daily.
A)True
B)False
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Chapter 5: Consumer Credit: Credit Cards and Student Loans
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79 Verified Questions
79 Flashcards
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Sample Questions
Q1) A total debt-to-income ratio of 30% or higher,including housing payments,makes you a high credit risk.
A)True
B)False
Q2) Which of the following is not a reason that people apply for credit and end up getting into debt?
A)Overdraft protection
B)Getting enticed by low introductory rates
C)Not paying any more than the minimum payment
D)Strong temptation of instant gratification
Q3) Your previous balance is $100.You charge $100 more on January 2<sup>nd</sup> and your month-end balance is $200.What method would cost the most with 12% APR?
A)Adjusted balance method
B)Average daily balance method
C)Minimum finance charge
D)Both the adjusted balance method and the average daily balance method
Q4) You should always look for an alternative to payday loans.
A)True
B)False
7
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Chapter 6: Credit Bureau Reports and Identity Theft
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96 Verified Questions
96 Flashcards
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Sample Questions
Q1) The three national credit reporting agencies in the United States are TransUnion,Equifax,and Experian.
A)True
B)False
Q2) ________ is when someone steals your personal information to commit theft or fraud.
A)Stealing
B)Identity theft
C)Phishing
D)Lying
Q3) Which of the following are ways to improve a FICO score?
A)Open new credit cards
B)Transfer balances to one credit card
C)Pay bills on time and pay as agreed
D)All of the options are correct.
Q4) What is an advantage of having a good credit score?
A)You have never been in debt.
B)It is easier to get credit in an emergency.
C)You will be making money for yourself rather than someone else.
D)You won't fall into perma-debt.
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Chapter 7: Auto and Home Loans
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62 Verified Questions
62 Flashcards
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Sample Questions
Q1) What types of home equity loans are there?
A)Home equity line of credit (HELOC)
B)Fixed-rate/fixed-term
C)Balloon payment loans
D)All of the choices are correct.
Q2) One disadvantage to renting is ________.
A)you are able to move easily
B)its low initial cost
C)you gain equity as you pay
D)you do not gain any equity in the rented property
Q3) When purchasing a home,a real estate broker can help you do all of the following except
A)find companies to conduct inspections.
B)identify financing options.
C)review your legal documents relating to title.
D)help you find a lender.
Q4) PMI is required when purchasing a home with a down payment greater than 20 percent of the purchase price.
A)True
B)False
Page 9
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Chapter 8: Debt,foreclosure,and Bankruptcy
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70 Verified Questions
70 Flashcards
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Sample Questions
Q1) Paying rent,gas,and utilities and buying groceries are examples of what kind of spending?
A)Necessary
B)Non-essential
C)All of the choices are correct.
D)None of the choices are correct.
Q2) Budgeting and money journaling are helpful tools for realizing where you are financially and what you can trim.
A)True
B)False
Q3) Which of the following are early warning signs of financial problems?
A)Not having an emergency fund.
B)Living paycheck-to-paycheck.
C)Charging essentials like gas and groceries with a payday loan.
D)All of the choices are correct.
Q4) Using your credit card to buy a motorcycle you know you can't afford is
A)breaching a moral obligation.
B)liquidation.
C)forbearance.
D)starting a reinstatement program.
10
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Chapter 9: Tax Management
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84 Verified Questions
84 Flashcards
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Sample Questions
Q1) Why was the alternative minimum tax (AMT)designed?
A)To keep the rich from living tax-free
B)To get rid of regular income tax
C)So only one tax would be issued
D)So taxpayers with mortgage interest deductions could pay less
Q2) Which tax form is available for anyone to use?
A)1040EZ
B)1040A
C)1040
D)43110
Q3) Tax credits directly reduce the amount of tax owed dollar-for-dollar.
A)True
B)False
Q4) You should consider your marginal tax rate when deciding how and when to sell investments.
A)True
B)False
Q5) Exemptions and deductions reduce taxable income.
A)True
B)False
11
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Chapter 10: Insurance: Covering Your Assets
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) When purchasing homeowner's or renter's insurance,replacement value
A)only reimburses you for the amount originally spent to acquire personal property.
B)costs less than purchase price insurance.
C)will reimburse you for the amount required to replace your personal property at today's values.
D)will give you money to replace the property up to the value insured.
Q2) The insurance declaration page focuses on what items are excluded from coverage. A)True
B)False
Q3) Health insurance plans fall into three categories: fee-for-service,high-deductible,and managed care.
A)True
B)False
Q4) Factors impacting the premium costs of disability insurance include length of coverage,renewability,cancellation,automatic adjustments,health,and occupation. A)True
B)False
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Chapter 11: Investment Basics
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56 Verified Questions
56 Flashcards
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Sample Questions
Q1) If you are managing your own portfolio,you need to re-evaluate your investment goals,risk tolerance,portfolio returns,and asset allocation on at least ________ basis.
A)a monthly
B)an every-other-month
C)an every-6-months
D)an annual
Q2) A Coverdell Education Savings Account is similar to a Roth IRA in that the contributions to the accounts are after-tax and they grow free of federal income tax.
A)True
B)False
Q3) What percentage of your investments should be part of Tier III,the 'high-risk,high-return' zone?
A)5%
B)10%
C)20%
D)Whatever percent of money you can lose without fear of bankruptcy
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13
Chapter 12: Mutual Funds
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Mutual funds are now regulated by the ________.
A)Investment Company Act of 1940
B)Federal Trust and Banking Administration (FTBA)
C)FDIC
D)NCUI
Q2) How is a mutual fund's expense ratio calculated?
A)Total operating expenses
B)Total operating expenses for year/12 months
C)Total operating expenses divided by average dollar value of the fund's assets
D)Average monthly operating expenses divided by average asset value
Q3) Net asset value is calculated by the total value of all the assets the ________.
A)fund holds
B)fund holds for the historical average for one year,divided by the number of mutual fund shares outstanding
C)fund holds,divided by the number of mutual fund shareholders
D)fund holds,divided by the number of mutual fund shares outstanding
Q4) All mutual funds have an expense ratio which they use to assess operating expenses to the owners of the mutual fund.
A)True
B)False
Page 14
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Chapter 13: Stocks
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68 Verified Questions
68 Flashcards
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Sample Questions
Q1) A ________ sets a minimum or maximum price before your stock trade is converted to a market order and sent to the stock exchange.
A)market order
B)limit order
C)stop order
D)day order
Q2) Most IPOs involve companies going through a transitory growth period,which makes it easy to predict future value.
A)True
B)False
Q3) Which of the following describes a bear market?
A)The market prices are increasing.
B)The market is going up and down with no determined trend.
C)Stock market indexes have decreased 20% or more over at least a two-month period.
D)Your stock portfolio is losing money.
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15
Chapter 14: Bonds
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71 Verified Questions
71 Flashcards
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Sample Questions
Q1) Some bonds are traded on stock exchanges or in the over-the-counter market.
A)True
B)False
Q2) The higher the rating on the bond,the ________.
A)higher the interest rate the issuer has to pay
B)higher the coupon rate to attract investors
C)lower the coupon rate needed to attract investors
D)None of the choices are correct; the rating has no effect on the interest rate and does not rate the risk of a bond.
Q3) Buying and selling corporate bonds is as easy as buying and selling stocks,given that bonds tend to trade every few days and there are fewer buyers and sellers.
A)True
B)False
Q4) Which is not a debt obligation that the U.S.Treasury issues?
A)U.S.savings bonds
B)Federal Agency Stock (e.g.FNMA or FRDMAC)
C)Treasury bills,notes,and bonds
D)Treasury Inflation-Protected Securities (TIPS)
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Page 16
Chapter 15: Real Estate Investments
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) A type of real estate investment in which a person or company buys property for a low price with the intention of improving it and reselling it quickly is called
A)a REIT.
B)rental property.
C)flipping property.
D)turnover property.
Q2) Which of the following is not true when it comes to asset appreciation?
A)It is taxed at your capital gains rate if property is held for more than one year.
B)If you sell property and buy a like property,the IRS allows you to reinvest 100% of the equity.
C)Capital appreciation is the difference between the selling price and the purchase price.
D)It is a great way to build your real estate portfolio without paying taxes on gains until liquidation.
Q3) A partnership provides the partners holding the property unlimited liability protection.
A)True
B)False
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17
Chapter 16: Retirement and Estate Planning
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49 Flashcards
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Sample Questions
Q1) A 401(k)plan is used to save for ________.
A)college
B)retirement
C)unemployment
D)None of the options are correct.
Q2) A person who has made a legally valid will is ________.
A)intestate
B)testate
C)relaxed
D)impoverished
Q3) The Social Security Act was signed into law in 1935 by President Franklin D.Roosevelt and was meant to provide a safety net against poverty brought on by all of these except A)unemployment.
B)illness.
C)disability.
D)All of the options are correct.
Q4) Those who are self-employed can invest in a simplified employee pension plan.
A)True
B)False
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Chapter 17: Financial Planning for Life
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23 Flashcards
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Sample Questions
Q1) To reach financial success,you should create a(n)________ and develop the discipline to stick with it.
A)reward
B)movie night
C)routine
D)celebratory attitude
Q2) How many times a year should you review your monthly budget?
A)At least 10 times a year
B)At least 12 times a year
C)Once a year
D)Twice a year
Q3) Which is not a way to create balance in your life?
A)Reduce your obligations
B)Eliminate the nonessentials
C)Think back to your values
D)Get more money
Q4) It is important to prioritize,minimize,organize,and economize things that exhaust you in your life.
A)True
B)False
Page 19
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