Financial Planning for Individuals
Question Bank
Course Introduction
Financial Planning for Individuals is designed to equip students with the fundamental concepts and practical tools necessary for managing personal finances effectively. The course covers key topics such as budgeting, saving, investing, retirement planning, insurance, tax strategies, and estate planning. Emphasis is placed on goal setting, analyzing financial statements, risk assessment, and the development of a comprehensive financial plan tailored to different life stages. By the end of the course, students will have a solid understanding of how to make informed financial decisions, optimize their personal resources, and achieve both short- and long-term financial objectives.
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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Chapter 1: Personal Financial Planning in Action
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90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/55824
Sample Questions
Q1) The potential for difficulty to convert an investment to cash is referred to as ____________ risk.
A) interest-rate
B) inflation
C) income
D) personal
E) liquidity
Answer: E
Q2) Inflation reduces the buying power of money.
A)True
B)False
Answer: True
Q3) Many Americans have money problems because of
A) Poor planning and weak money management habits
B) Too many clearly defined goals
C) Proper use of credit
D) Not enough advertising to make effective decisions
E) Controlled spending
Answer: A
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Page 3
Chapter 2: Money Management Skills
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) Which of the following is NOT a liquid asset?
A) Savings/money market accounts
B) Cash value of life insurance
C) Checking account balance
D) Coins in a jar at home
E) Retirement investments
Answer: E
Q2) The current financial position of an individual or family is best presented with the use of a
A) Budget.
B) Cash flow statement.
C) Balance sheet.
D) Bank statement.
E) Time value of money report.
Answer: C
Q3) Money management refers to annual financial activities necessary to manage personal economic resources.
A)True
B)False
Answer: False
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Chapter 3: Taxes in Your Financial Plan
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Using the following table,calculate the taxes for an individual with taxable income of $25,000.
Answer: 11ea6ea1_4fd2_6579_8f54_d191a03e88d3_TB2409_00 Taxes = (10% × $8,500)+ {15% × ($25,000 - $8,500)} = $850 + $2,475 = $3,325.
Q2) A tax imposed on the value of a person's property at the time of death is called a(n)
A) Estate tax.
B) Excise tax.
C) Income tax.
D) Real estate tax.
E) Sales tax.
Answer: A
Q3) Individuals who have high income reported on Form 1099 may be required to pay estimated tax payments.
A)True
B)False
Answer: True
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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) Franklin is planning for a purchase of a vehicle in two years.Since he wants to be certain that his funds are safe (insured),which of the following should he use?
A) A credit card.
B) A trust.
C) A loan.
D) A savings account.
E) A home mortgage.
Q2) Investments and tax assistance,both tools for financial planning,are also known as A) Checking accounts.
B) Trusts.
C) Loans.
D) Savings accounts.
E) Financial services.
Q3) Liquidity and rate of return refer to the same thing.
A)True
B)False
Q4) Discuss the relationship between inflation and interest rates.
Q5) What financial services are available from banking online?
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Chapter 5: Consumer Credit:
Sources, and Costs
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) If you think your identity has been stolen,which of the following actions does the Federal Trade Commission recommend you take immediately?
A) Report it to your neighbor.
B) Call 911.
C) Contact your local bank.
D) File a police report.
E) All of these steps should be taken immediately.
Q2) Which of the following can result from a failure to repay a loan?
A) Bankruptcy.
B) Loss of income.
C) Loss of a good reputation.
D) Damage to family relationships.
E) All of these answers may be a result of the failure to repay a loan.
Q3) Which of the following is an example of closed-end credit?
A) A mortgage loan.
B) A department store credit card.
C) Overdraft protection.
D) A bank line of credit.
E) All of these are examples of closed-end credit.
Q4) Identify at least four warning signs that you may be in financial trouble.
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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) Which of the following is the best way to state a problem?
A) I need to have a car.
B) I need transportation.
C) I need a motorcycle.
D) I need to have a minivan.
E) I need to have an SUV.
Q2) The phases of buying are problem identification,preshopping activities,evaluating alternatives,selection and purchase,and postpurchase activities.
A)True
B)False
Q3) Tamra went to a restaurant and had an unpleasant experience that sent her to the hospital.The problems at the restaurant should be handled by
A) Arbitration.
B) The county health department.
C) A lawsuit.
D) Mediation.
E) The doctor who treated her.
Q4) What are three sales techniques that should be avoided when buying a car?
Q5) What is the difference between mediation and arbitration?
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Chapter 7: Selecting and Financing Housing
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) Home improvements will definitely increase the selling price of a house.
A)True
B)False
Q2) What factors should you consider when determining how much you can afford for your home?
Q3) A landlord has the right to sublet an apartment.
A)True
B)False
Q4) A balloon mortgage has fixed monthly payments for a period of time.At the end of that time,the entire principal balance must be paid in full.
A)True
B)False
Q5) The opportunity to have another person take over rent payments and live in the rental unit is called (a)
A) Lease.
B) Lessee.
C) Lessor.
D) Rental agreement.
E) Subletting.
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Chapter 8: Home and Automobile Insurance
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) A policy that supplements your basic personal liability coverage is called a(n)
A) Endorsement.
B) Homeowner's insurance.
C) Medical payments coverage.
D) Supplementary policy.
E) Umbrella policy.
Q2) Which of the following is NOT correct about renter's insurance?
A) The broad form covers personal property against perils specified in the policy.
B) Renter's insurance covers the building and other structures on the site.
C) The comprehensive form protects personal property against perils not specifically excluded in the policy.
D) Typical coverage pays only the actual cash value of one's losses.
E) Renter's insurance includes personal property protection, additional living expenses, and personal liability.
Q3) Risk management is an organized plan for protecting yourself,your family,and your property.
A)True
B)False
Q4) Discuss the amount of home insurance you should have.
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Chapter 9: Health and Disability Income Insurance
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118 Verified Questions
118 Flashcards
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Sample Questions
Q1) Administrative costs in the United States consume half of the health care dollars.spent.
A)True
B)False
Q2) What are the main differences between FSAs,HRAs,and HSAs?
Q3) Georgia has a health insurance policy that includes a deductible of $500 and a coinsurance of 20%.If her total bill is $3,000,how much will she be required to pay?
Q4) Which of the following is INCORRECT about dread disease policies?
A) They are illegal in many states.
B) Each policy covers a wide range of conditions.
C) They play upon unrealistic fears.
D) These policies are usually sold through the mail, in newspapers, and magazines, or by door-to-door salespeople.
E) They cover diseases that are already covered if you are insured under a major medical plan.
Q5) How are FSAs and HSAs similar?
Q6) Identify at least three types of health insurance coverage.
Q7) What is guaranteed renewability?
Q8) Why is disability income insurance important?
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Chapter 10: Financial Planning With Life Insurance
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Jeff and Erica have two children.They plan to purchase life insurance using this formula: (18 - Youngest child's age)× $10,000.Which method are they using to determine their life insurance needs?
A) Easy method
B) Dual income, no kids method
C) Formal calculation method
D) Nonworking spouse method
E) Family needs method
Q2) Which of the following statements is incorrect?
A) A deferred annuity allows an individual to receive payments from an annuity at some future date.
B) An immediate annuity allows an individual to receive payments from an annuity beginning at once.
C) A life insurance policy allows the beneficiary to receive proceeds at some future date.
D) An annuity is more advisable for people in poor health than for those who are likely to live longer than average.
E) An insurance company will calculate the annual amounts to pay each person for an annuity.
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12
Chapter 11: Investing Basics and Evaluating Bonds
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) Which of the following risks deals with fluctuations due to economic conditions?
A) Inflation
B) Interest rate
C) Business failure
D) Market
E) Stock
Q2) Investors choose safe investments because they know there is a moderate chance that these investments will become worthless.
A)True
B)False
Q3) Asset allocation is the process of spreading your assets among several different types of investments to increase risk.
A)True
B)False
Q4) As investors age,their investments typically become more aggressive.
A)True
B)False
Q5) Describe the steps you can take to manage an economic crisis.
Q6) List five items that appear in a corporate bond quote.
Page 13
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Chapter 12: Investing in Stocks
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155 Flashcards
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Sample Questions
Q1) List two long-term investing techniques.
Q2) Why does a company split its stock?
A) The stock is trading at a low price, and the company wants to increase its stock value.
B) It wants fewer shares outstanding.
C) The stock is trading at a high price, and the company wants to bring the price in line with a theoretical ideal range.
D) It wants the total market capitalization to be lower than the current level.
E) The company wants to guarantee that the stock price will increase.
Q3) This ratio uses the market price per share of the stock and the earning per share.
A) Book value per share
B) Earnings per share
C) Market price per share
D) Net income
E) Price-earnings ratio
Q4) Why might you want to invest in common stocks?
Q5) The main goal of dollar cost averaging is buying high and selling low.
A)True
B)False
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Chapter 13: Investing in Mutual Funds
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101 Flashcards
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Sample Questions
Q1) Melinda wants to withdraw some money from her mutual fund.Which of the following is not an option available?
A) Write a check
B) Sell a certain number of shares each investment period
C) Withdraw a fixed percentage of asset growth
D) Withdraw all income dividends and capital gain distributions earned each investment period
E) Withdraw all principal and leave interest dividends and capital gain distributions in the account
Q2) Thomas wants to invest in a fund that invests in stock,bonds,and money market instruments.Which of the following will meet his needs?
A) Asset allocation funds
B) Aggressive growth funds
C) Junk bond funds
D) Midcap funds
E) Short-term corporate bond funds
Q3) What is a mutual fund?
Q4) What are the two primary reasons that investors purchase mutual funds?
Q5) What is a balanced fund?
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Chapter 14: Starting Early: Retirement and Estate Planning
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Jacob is updating his estate planning and wants to set up the legal document to leave everything to his wife.He is writing a(n)
A) Exemption trust will.
B) Guardian will.
C) Simple will.
D) Stated amount will.
E) Traditional marital share will.
Q2) If you have children and are writing your will,you need to do all of the following except
A) Select a guardian.
B) Write the will with the help of an attorney.
C) Select an executor.
D) Sign the will in front of two witnesses.
E) Select beneficiaries.
Q3) Cindy's net worth should increase each year as she moves closer to her retirement. A)True
B)False
Q4) To whom does Social Security provide retirement benefits?
Q5) Identify four legal documents associated with estate planning.
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