Financial Literacy
Final Exam
Course Introduction
Financial Literacy is designed to equip students with essential knowledge and practical skills to make informed financial decisions in their personal and professional lives. The course covers fundamental topics such as budgeting, saving, investing, credit management, banking, and understanding loans and interest rates. Students will explore the principles of responsible money management, risk assessment, financial planning, and the impact of economic factors on personal finances. Through real-world case studies, interactive activities, and financial tools, learners will develop the competence and confidence needed to set financial goals, analyze financial options, and build a secure financial future.
Recommended Textbook
Personal Finance An Integrated Planning Approach 8th Edition by Ralph R Frasca
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16 Chapters
1996 Verified Questions
1996 Flashcards
Source URL: https://quizplus.com/study-set/3348 Page 2
Chapter 1: Financial Planning: Why Its Important to You
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66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/66520
Sample Questions
Q1) The four-step approach to financial planning begins by evaluating your success in goal achievement.
A)True
B)False
Answer: False
Q2) Business cycles are likely to persist in the future.
A)True
B)False Answer: True
Q3) In the future,the government is likely to play a greater role in providing retirement benefits.
A)True
B)False Answer: False
Q4) As your consumption increases during a period of time,the satisfaction you enjoy from it usually increases at an even greater rate.
A)True
B)False Answer: False
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Chapter 2: The Time Value of Money: All Dollars Are Not
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66 Verified Questions
66 Flashcards
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Sample Questions
Q1) John cashed in an annuity contract and received $10,000.John bought the contract 24 years ago for $5,000.These amounts indicate a contract rate of approximately 3%.
A)True
B)False
Answer: True
Q2) The first step in goal planning is setting up a budget.
A)True
B)False Answer: False
Q3) Compounding is the process of increasing present value to future values.
A)True
B)False
Answer: True
Q4) Given identical data,the future value of an ordinary annuity is greater than the future value of an annuity due.
A)True
B)False Answer: False
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Chapter 3: Financial Statement and Budgets: Where Are
You Now and Where Are You Going
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115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/66518
Sample Questions
Q1) The primary purpose of the monthly review and control is
A)to indicate future revised spending amounts,assuming some prior variances.
B)to revise action plans.
C)to identify family members causing unfavorable variances.
D)make sure the previous month's budget is balanced.
Answer: A
Q2) A loan associated with a margin account is classified as a current liability.
A)True
B)False
Answer: False
Q3) Unanticipated (unplanned)inflation makes it easier to reach our financial goals.
A)True
B)False
Answer: False
Q4) Current liabilities are often defined as those
A)payable immediately.
B)payable within one year.
C)payable over the same maturity as the asset they financed.
D)that can be liquidated without decreasing your existing net worth.
Answer: B
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Chapter 4: Taxes: the Governments Share of Your Rewards
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/66517
Sample Questions
Q1) Alicia has a tax credit of $100 and a marginal tax rate of 28%.Alicia's income tax will be reduced by how much as a result of the credit?
A)$28
B)$128
C)$100
D)None of the above;her taxes will increase by $100.
Q2) For individuals with income below specified limits,a contribution to a traditional IRA is taken as
A)a gross income addition.
B)an adjustment (deduction)to gross income.
C)an itemized expense.
D)a credit.
Q3) Income tax withheld by your employer is reported on employers' W-2 forms. A)True B)False
Q4) Social Security tax rates are progressive,similar to the federal income tax rates.
A)True
B)False
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Chapter 5: Liquidity Management: Managing Current
Assets and Current Liabilities
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97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/66516
Sample Questions
Q1) In most cases,you have unlimited access to a passbook savings account.
A)True
B)False
Q2) Series I bonds offer better tax advantages than Series EE bonds.
A)True
B)False
Q3) Lou Hinton's savings account (offering 12% simple interest)showed the following activity for the month of June:
Opening balance $2,000
6/10 Deposit 1,000
6/20 Withdrawal ( 800)6/30 Ending Balance 2,200
Interest earned in June with the minimum balance method would be
A)$20.00.
B)$22.00.
C)$30.00.
D)unknown.
Q4) A cashier's check is written by a bank and drawn against the bank when paid. A)True
B)False
7
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Chapter 6: Short-Term Credit Management: Consumer Credit
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138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/66515
Sample Questions
Q1) "Credit blocking" is the industry term for
A)illegally denying credit to individuals because of their race or gender.
B)reducing your credit limit because of an anticipated charge.
C)legally denying credit to individuals who have a past record of credit abuse.
D)denying high-risk individuals access to low-cost lines of credit.
Q2) In applying for credit,you should omit all data having to do with your net worth since lenders may wish to attach it as collateral.
A)True
B)False
Q3) The only sensible argument for using credit is that you lack sufficient resources to purchase with cash.
A)True
B)False
Q4) A student loan consolidation is a method for dealing with delinquent student borrowers.
A)True
B)False
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Chapter 7: Consumer Durables: the Personal Auto
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109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/66514
Sample Questions
Q1) If a product is sold "as is"
A)it is covered by neither express nor implied warranties.
B)it is not covered by an express warranty,but is covered by an implied warranty.
C)it is not covered by an implied warranty,but can still be covered by an express warranty.
D)it can still be covered by both express and implied warranties.
Q2) One common characteristic of open-end leases is that
A)the length of the lease may be automatically extended by the lessee.
B)the total cost of the lease remains unknown until the end of the leasing period.
C)the monthly payments are variable and open-ended.
D)all of the above are common characteristics of open-end leases.
Q3) Most auto manufacturers have arbitration programs.
A)True
B)False
Q4) One significant benefit of leasing is that you don't have to worry about excessive wear and tear on the car.
A)True
B)False
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Page 9
Chapter 8: Housing: the Cost of Shelter
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152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/66513
Sample Questions
Q1) With an open listing agreement
A)the first agent to list your home is entitled to half the commission on the sale.
B)the first agent to list your home is entitled to the full commission on the sale.
C)any agent can broker your home.The commission goes to the agent who locates a buyer.
D)The broker who is willing to sell your home for the lowest commission receives an exclusive right to sell.
Q2) The Federal National Mortgage Corporation recommends that you total monthly debt payments,including housing expenses,not exceed
A)33 to 36 percent of your gross monthly income.
B)14 to 18 percent of your gross monthly income.
C)46 to 50 percent of your gross monthly income.
D)60 to 64 percent of your gross monthly income.
Q3) Loans for mobile homes are typically financed like other personal property loans at interest rates above those on conventional home mortgages.
A)True
B)False
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Chapter 9: Financial Markets and Instruments: Learning the Investment Environment
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117 Verified Questions
117 Flashcards
Source URL: https://quizplus.com/quiz/66512
Sample Questions
Q1) "Investor's Business Daily" is a radio show focusing on investment news.
A)True
B)False
Q2) A mutual fund is a pooling arrangement.
A)True
B)False
Q3) Although discount brokers offer lower commissions,your account is not insured by SIPC.
A)True
B)False
Q4) The maintenance margin requirement is greater than the initial margin requirement.
A)True
B)False
Q5) A long position reflects the expectation of price increases.
A)True
B)False
Q6) The NYSE is an example of an organized exchange.
A)True
B)False
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Chapter 10: Investment Basics: Understanding Risk and Return
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86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/66511
Sample Questions
Q1) Which method of investing probably involves the most risk?
A)Using the CAPM as a guide to select securities
B)Using a market-timing strategy to manage a portfolio
C)Using a buy-and-hold approach to manage a portfolio
D)Using DRIPS and dollar cost averaging to build a portfolio
Q2) The returns on Asset A are strongly,positively correlated with Asset B's returns;thus,holding the two assets together will
A)significantly reduce portfolio risk.
B)significantly increase portfolio risk.
C)have little or no effect on portfolio risk.
D)significantly increase portfolio return.
Q3) Examining evidence of returns on common stocks and Treasury bills indicates that common stocks had
A)the higher rate of return and the greater risk.
B)the lower rate of return and the greater risk.
C)the lower rate of return and the less risk.
D)the higher rate of return and the less risk.
Q4) Business risk refers to problems encountered by simply going into business.
A)True
B)False
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Chapter 11: Stocks and Bonds: Your Most Common Investments
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186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/66510
Sample Questions
Q1) Which of the following is not considered when calculating the cost basis for a stock?
A)Inflation
B)Purchase price
C)Recording fees
D)Commissions
Q2) Inkle,Inc.has $200,000 of 10% bonds outstanding (which pay $20,000 interest)and $100,000 of 12% preferred stock (which pay $12,000 dividends).Assume that Inkle's earnings in the upcoming year will be either $50,000 or $100,000.Given these two possibilities,common stockholders' share of earnings will be either ________ or
A)$38,000;$88,000
B)$30,000;$68,000
C)$18,000;$68,000
D)$18,000;$88,000
Q3) In comparison to traditional Treasury bonds,inflation-indexed bonds
A)have a lower coupon rate.
B)have a higher coupon rate.
C)have an equal coupon rate.
D)have an equal coupon rate,but are issued with lower par values.
Page 13
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Chapter 12: Mutual Fundsother Pooling Arrangements:
Simplifying, Maybe Improving Investment Performance
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120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/66509
Sample Questions
Q1) Load fund have generally not outperformed no-load funds. A)True
B)False
Q2) A portfolio plan should
A)seek to maximize the portfolio's value,regardless of risk.
B)consider the investor's goals and risk-tolerance level.
C)try to make the most possible money in the shortest possible time.
D)specify general,rather than concrete,objectives.
Q3) One of the biggest mistakes investors frequently make in managing their 401(k)retirement investments is being excessively conservative.
A)True
B)False
Q4) In a limited partnership,limited partners are inactive in managing the business. A)True B)False
Q5) A variable ratio plan adjusts a portfolio by A)holding asset weights constant.
B)increasing or decreasing all asset weights in response to income changes.
C)increasing the weight of assets that have performed well in the recent past.
D)increasing the weight of assets that have performed poorly in the recent past.
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Chapter 13: Property and Liability Insurance: Protecting Your Lifestyle Assets
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154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/66508
Sample Questions
Q1) Uninsured motorists' coverage pays only for property damage.
A)True
B)False
Q2) A small business in your home
A)is typically covered for property loss,but not business related liabilities,under your homeowners' policy.
B)Is typically covered for minor business related liabilities,but not property loss,under your homeowners' policy.
C)Is typically covered for both property loss and minor business related liabilities under your homeowners' policy.
D)can be included under your homeowners' coverage with a business pursuits endorsement.
Q3) The cost of personal liability coverage is unrelated to the year,make,or model of your car.
A)True B)False
Q4) Other-than-collision auto coverage pays only for damages due to theft.
A)True
B)False
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Chapter 14: Health Care and Disability Insurance: Protecting Your Earning Capacity
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137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/66507
Sample Questions
Q1) Through the use of a medical directive,you can indicate the type of life support you are willing to receive when you are no longer able to speak for yourself.
A)True
B)False
Q2) HMOs provide only minimal basic health care coverage.
A)True
B)False
Q3) The preferred hospital insurance is hospital indemnity insurance.
A)True
B)False
Q4) Workers' compensation provides comprehensive health insurance coverage.
A)True
B)False
Q5) The preferred strategy for holding down the cost of disability income protection is to choose
A)a longer elimination period.
B)a shorter benefit period.
C)a less inclusive definition of disability.
D)a policy with an A+ rating.
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Chapter 15: Life Insurance and Estate Planning: Protecting Your Dependents
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186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/66506
Sample Questions
Q1) Which of the following would be included in the Transition Fund?
A)Insurance policies
B)College tuition
C)Probate costs
D)Lifestyle assets
Q2) In which of the following policies does the face amount of the policy decrease over time?
A)Whole life
B)Renewable term
C)Decreasing term
D)Universal life
Q3) The nonforfeiture clause ensures that
A)cash value is protected by financial reserves.
B)sales commissions are paid in the event of a prematurely terminated policy.
C)you do not lose the cash value of the policy if you cease making payments.
D)beneficiaries do not have to forfeit the proceeds to other claimants on the death estate.
Q4) Everything in the will is subject to legal interpretation and challenge.
A)True
B)False
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Chapter 16: Retirement Planning: Planning for Your
Long-Term Needs
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119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/66505
Sample Questions
Q1) For those who continue to work while drawing Social Security retirement benefits,
A)there is no reduction in benefits for those past normal retirement age.
B)there is a reduction in benefits for those under age 70 and earning more than a specified threshold amount.
C)there is no reduction in benefits for anyone presently retired,but this will be changed for future retirees.
D)there is a $1 reduction in benefits for every $3 earned starting with the first dollar of earned income for all retirees regardless of age.
Q2) You may be entitled to receive the funds in your retirement plan under which of the following conditions?
I.retirement.
II.disability.
III.termination of employment.
IV.financial hardship.
A)only I
B)only I and II
C)only I,II,and IV
D)I,II,III,or IV
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