Financial Decision Making Review
Questions
Course Introduction
Financial Decision Making explores the fundamental principles and analytical tools used in making sound financial choices within organizations and in personal finance. This course emphasizes identifying, evaluating, and implementing decisions related to budgeting, investment, financing, and risk management. Students learn to interpret financial statements, assess the time value of money, and conduct cost-benefit analyses to inform strategic decisions. Case studies and practical applications help develop critical thinking and problem-solving skills essential for effective financial management in todays dynamic environment.
Recommended Textbook
Personal Financial Planning 13th Edition by Lawrence J. Gitman
Available Study Resources on Quizplus
15 Chapters
2759 Verified Questions
2759 Flashcards
Source URL: https://quizplus.com/study-set/3271
Page 2
Chapter 1: Understanding the Financial Planning Process
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/64933
Sample Questions
Q1) About 20% of Americans say retirement planning is their most pressing financial concern.
A)True
B)False
Answer: False
Q2) The amount of money we set aside for future consumption will be determined by
A) our level of current wealth.
B) how much we currently earn and spend.
C) our education level.
D) the current needs of our family.
E) the cost of life's necessities.
Answer: B
Q3) [Disney stock | Your car] would be considered a financial asset.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Using Financial Statements and Budgets
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/64934
Sample Questions
Q1) A house and land are examples of financial property.
A)True
B)False
Answer: True
Q2) The primary function of financial statements is to provide a picture of your [actual | projected] financial position.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Answer: A
Q3) Net worth achieves is highest level beginning at age 65 and increases throughout retirement years.
A)True
B)False
Answer: False
Q4) The savings ratio is useful in the evaluation of the balance sheet.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Preparing Your Taxes
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/64935
Sample Questions
Q1) Marginal tax and average tax rate refer to the same thing.
A)True
B)False
Answer: False
Q2) Typically state governments get most of their tax revenue from
A) property taxes and excise taxes.
B) sales taxes and income taxes.
C) licensing fees and income taxes.
D) excise taxes and sales taxes.
E) income taxes and property taxes.
Answer: B
Q3) You are preparing your own tax return.The least costly source for answering your questions would be
A) IRS 800 numbers.
B) private preparation service.
C) tax accountant.
D) tax lawyer.
E) local post office.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Managing Your Cash and Savings
Available Study Resources on Quizplus for this Chatper
193 Verified Questions
193 Flashcards
Source URL: https://quizplus.com/quiz/64936
Sample Questions
Q1) The rate of return on liquid assets is relatively high compared to other types of investments.
A)True
B)False
Q2) Funds in a ____ must remain on deposit for a stated time period in order to avoid an interest penalty.
A) certificate of deposit
B) U.S.Treasury bill
C) checking account
D) mutual fund
E) passbook savings
Q3) Many people choose a bank solely on [services | convenience].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) From the bank's perspective,ATM transactions are more costly than on-line banking transactions.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Making Automobile and Housing Decisions
Available Study Resources on Quizplus for this Chatper
220 Verified Questions
220 Flashcards
Source URL: https://quizplus.com/quiz/64937
Sample Questions
Q1) The affordability ratios used to qualify applicants for FHA and VA loans are more stringent than those used for conventional loans.
A)True
B)False
Q2) The Real Estate Settlement Procedures Act governs [mortgage regulations | mortgage closings].
A)for the first item
B)for the second item
C)if neither item will correctly complete the
Q3) ____ is a reason for owning your own home.
A) Pride of ownership
B) A feeling of permanence
C) A sense of stability
D) A tax shelter
E) All of these are reasons.
Q4) The first major expenditure most people make is to buy a [house | car].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Using Credit
Available Study Resources on Quizplus for this Chatper
178 Verified Questions
178 Flashcards
Source URL: https://quizplus.com/quiz/64938
Sample Questions
Q1) Bank credit cards often offer features such as buyer protection plans for a fee to all customers.
A)True
B)False
Q2) Credit bureaus
A) will send you a free copy of your credit report whenever you ask.
B) may charge up to $20 for a copy of your credit report.
C) are required to correct errors only when a creditor asks them to.
D) All of these
E) None of these
Q3) Unsecured lines of credit are easy to use and often use some form of collateral as default protection.
A)True
B)False
Q4) Nearly all credit cards have annual fees.
A)True
B)False
Q5) Credit reports on individual borrowers are issued by credit card issuers.
A)True
B)False
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Using Consumer Loans
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/64939
Sample Questions
Q1) Borrowers are more likely to ask for a(n)[single payment | installment payment] consumer loan.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) Credit unions dominate the consumer loan market.
A)True
B)False
Q3) Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) If your installment loan has a variable interest rate,
A) the rate will remain the same over the life of the loan.
B) the amount you borrowed will change with interest rates.
C) you cannot accurately predict the total interest you will pay on the loan.
D) you can calculate the total interest you will pay on the loan.
E) your monthly loan payment will change every month.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Insuring Your Life
Available Study Resources on Quizplus for this Chatper
157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/64940
Sample Questions
Q1) Avoiding alcoholic beverage while driving is an example of risk reduction.
A)True
B)False
Q2) Term life insurance is characterized by
A) level annual premiums throughout life.
B) premium amounts related to age.
C) inappropriateness for most person's life insurance needs.
D) non-convertibility.
E) cash value.
Q3) The beneficiary [will | will not] have to pay income taxes on the proceeds from a life insurance policy.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) The primary purpose of life insurance is to protect family members financially after one's death.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Insuring Your Health
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/64941
Sample Questions
Q1) Social security provides health care coverage to persons age ____ and those who are ____.
A) 55 and over; collecting disability under Social Security
B) 60 and over; collecting disability under Social Security.
C) 65 and over; collecting disability under Social Security
D) 60 and over; low income
E) 60 and over; low income.
Q2) The amount of health insurance reimbursement actually paid may be reduced by [internal limits | co-payment caps].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q3) An elimination period in disability income insurance is most closely analogous to which of the following cost sharing provisions in health insurance?
A) deductible
B) coinsurance
C) limit
D) cap
E) all of the above closely resemble an elimination period
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Protecting Your Property
Available Study Resources on Quizplus for this Chatper
194 Verified Questions
194 Flashcards
Source URL: https://quizplus.com/quiz/64942
Sample Questions
Q1) The Principle of Indemnity does NOT apply to life and health insurance.
A)True
B)False
Q2) Most HO policies [would | would not] contain a clause requiring you to carry insurance equal to a minimum percent of the replacement value of your home in order to be paid in full for small losses.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q3) Negligent acts must be [intentional | unintentional] in order to be insured.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) The federal government subsidizes the flood insurance program.
A)True
B)False
Q5) As a tenant,you would purchase a HO-3 policy.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Investment Planning
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/64943
Sample Questions
Q1) A limit order may be used either to buy or to sell.
A)True
B)False
Q2) Fifty shares of stock would constitute [an odd lot | a round lot].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q3) [Speculating | Investing] is considered to be a long term activity.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) NYSE Euronext is a part of the broker market totaling about [40% | 80%] of world equity markets.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q5) The Federal Reserve Board (Fed)has the power to raise and lower the margin requirements for stock purchases.
A)True
B)False
13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Investing in Stocks and Bonds
Available Study Resources on Quizplus for this Chatper
194 Verified Questions
194 Flashcards
Source URL: https://quizplus.com/quiz/64944
Sample Questions
Q1) The possibility that a corporation might fail is [economic | business] risk.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) Monte Jackson is considering the purchase of XYZ stock and would like to estimate its approximate yield if he holds it 5 years.The current price is $20 and Monte expects it would rise to $30 over the 5-year holding period.The expected dividend is $1.00 each year.
Q3) Only the strongest,most stable and safe-return companies can be called A) blue chip stocks.
B) growth companies.
C) income stocks.
D) defensive stocks.
E) cyclical stocks.
Q4) Treasury securities are yielding 6%.A growth stock with an expected return of 8% [would | would not] be considered a viable investment candidate by most investors.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/64945
Sample Questions
Q1) A hybrid REIT would invest only in real estate mortgages.
A)True
B)False
Q2) Asset allocation funds invest money in
A) stocks
B) bonds
C) real estate
D) a and b only
E) all of the above
Q3) Bond mutual funds are always less risky than stock mutual funds.
A)True
B)False
Q4) Mutual funds must value their securities [monthly | daily].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q5) ETFs are set up to protect investors from capital gains taxes better than most mutual funds can.
A)True
B)False
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Planning for Retirement
Available Study Resources on Quizplus for this Chatper
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/64946
Sample Questions
Q1) Major sources of retirement income include
A) social security.
B) annuities.
C) individual savings plans.
D) employer retirement and pension plans.
E) all of these.
Q2) Persons 50 and over are able to make larger contributions to IRAs than younger persons.
A)True
B)False
Q3) The employer retirement plan that is intended to promote employee productivity and allows the employer to vary the amount of annual contributions is a
A) Qualified defined contribution plan.
B) Thrift and savings plan.
C) Profit sharing plan.
D) 401(k)plan.
E) 403(b)plan.
Q4) Annuities may guarantee proceeds for a specific period or for a specific amount.
A)True
B)False
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Preserving Your Estate
Available Study Resources on Quizplus for this Chatper
177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/64947
Sample Questions
Q1) If you have a small estate,you should [contact an attorney | write your will yourself].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) Gift giving can reduce estate tax liability.
A)True
B)False
Q3) The [inheritance | pickup estate] tax costs neither the estate or the recipients of the estate anything in addition to the federal estate tax.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) An estate plan is good only as long as it fits the needs,desires,and circumstances of the parties involved.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17