Introduction to Financial Literacy
Exam Solutions
Course Introduction
Introduction to Financial Literacy provides students with a foundational understanding of personal finance principles and practices. This course covers essential topics such as budgeting, saving, credit management, investing, and responsible financial decision-making. Students will learn to analyze financial information, understand the impact of economic factors on personal finances, and develop strategies to achieve short- and long-term financial goals. Emphasis is placed on practical skills and informed decision-making to promote financial well-being throughout various stages of life.
Recommended Textbook
Personal Finance 2nd Edition by Robert B. Walker
Available Study Resources on Quizplus
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
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/65328
Sample Questions
Q1) Passive income is money you receive from A)investments and savings.
B)salaries.
C)tips and wages.
D)All of the options are correct.
Answer: A
Q2) In order to increase their probability of attainment,goals should have a specific end date.In 55 months,Clare wants to have her college loans paid off,in 24 months,she wants to start a family,and in 15 months,she wants to take a trip to China.Which goal category is Clare pursuing?
A)Intermediate goals
B)Long-term goals
C)Short-term goals
D)Attainable goals
Answer: A
Q3) Being frugal means never spending money.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Planning and Budgeting
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/65327
Sample Questions
Q1) Which financial statement allows you to find your net cash flow for a specific period?
A)Personal Cash Flow Statement
B)Balance Sheet
C)Expense Statement
D)Net Worth Statement
Answer: A
Q2) What is a budget variance?
A)When your budgeted spending equals your actual spending for the month
B)Expenses that vary from month to month,like groceries,dining out,and entertainment
C)The difference between a planned expenditure and the actual amount spent
D)The difference between how much you spend on fixed expenses and variable expenses
Answer: C
Q3) An example of opportunity cost would be that of eating out vs.packing your lunch,saving $5.00 each day.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Financial Instruments and Institutions
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/65326
Sample Questions
Q1) Which of the following is not included in the dependent life stage?
A)Certificate of deposit
B)College savings plan
C)Student loans
D)Savings account
Answer: C
Q2) Which is not a benefit of overdraft protection?
A)Saves you money in overdraft fees
B)Saves your reputation
C)Saves you time
D)Allows you to not have to balance your checking account
Answer: D
Q3) With a reverse mortgage,upon the death of the last surviving homeowner,if there is negative equity in the home,the survivors will owe money to the bank.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Time Value of Money
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/65325
Sample Questions
Q1) If you have $3,000 today with a 5% APY,how much will you have 2 years from now?
A)$3,200.50
B)$3,307.50
C)$3,100.50
D)$3,500.25
Q2) The ________ frequently interest is compounded,the ________ the yield. A)more; lower B)more; higher C)less; higher D)less; same
Q3) If you put $1,000 into an account earning 5% interest annually,how much will you have in five years?
A)$5,000.00
B)$1,276.28
C)$1,050.50
D)$1,500.00
Q4) The annual percentage yield (APY)is the effective monthly rate of return taking into account the effect of compounding interest.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Consumer Credit: Credit Cards and Student Loans
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/65324
Sample Questions
Q1) For a good credit score,never carry a balance of more than ________ of your credit limit on your credit card.
A)25%
B)30%
C)50%
D)60%
Q2) There are no advantages to the use of credit cards and they should be avoided at all cost.
A)True
B)False
Q3) Which student loan does not accrue interest during school?
A)Parent Plus.
B)Unsubsidized.
C)Subsidized.
D)No student loans accrue interest during school.
Q4) The application used to determine financial need is called what?
A)FAFSA
B)SAFSA
C)AFFSA
D)FAASF
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Credit Bureau Reports and Identity Theft
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/65323
Sample Questions
Q1) Information regarding a criminal conviction can remain on a credit report indefinitely.
A)True
B)False
Q2) Which of the following does not have an adverse effect on your credit score?
A)Multiple credit report requests
B)Opening new accounts
C)Having a mix of both revolving and installment credit
D)Having large outstanding balances
Q3) Which of the following are ways to improve your FICO credit score?
A)Pay your bills on time
B)Limit the number of new credit accounts
C)Keep credit card balances low
D)All of the options are correct.
Q4) The three national credit reporting agencies in the United States are TransUnion,Equifax,and Experian.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Auto and Home Loans
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/65322
Sample Questions
Q1) Identify which item is not an advantage of buying a house versus renting.
A)Increase in equity
B)Tax advantages
C)Maintenance
D)All of the choices are correct.
Q2) A real estate agent works for the ________.
A)buyer
B)seller
C)buyer or seller
D)buyer and seller
Q3) Second mortgages can be extremely risky.
A)True
B)False
Q4) Car lease payments are usually
A)lower than loan payments.
B)higher than loan payments.
C)never a good investment.
D)about the same as loan payments.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Debt,foreclosure,and Bankruptcy
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/65321
Sample Questions
Q1) Bankruptcy will discharge a student loan.
A)True
B)False
Q2) Olivia found herself in over $10,000 worth of credit card debt after she graduated from college.Most of her purchases on her credit cards came from purchases at the mall which included clothing,shoes,and purses.She also used her credit cards to finance her vacation to Mexico during spring break.Overwhelmed by her high credit card balances,Olivia has decided she wants to start digging herself out of credit card debt.What is the first step she should take?
A)Increase her income
B)Stop using her credit cards
C)Stop buying things she cannot afford
D)Create a realistic budget and use the envelope system
Q3) The fastest way to get out of debt is to
A)buy things you don't need.
B)don't to not buy things you cannot afford.
C)refinance to get better interest rates.
D)All of the choices are correct.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Tax Management
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/65320
Sample Questions
Q1) What is the extra tax a person has to pay on top of his or her regular income tax?
A)Average tax rate
B)Alternative minimum tax
C)Marginal income tax
D)None of the answers are correct.
Q2) Tax laws change each year.
A)True
B)False
Q3) What are the two kinds of education credits?
A)Hope and lifetime learning
B)Early and late
C)First and second
D)First and last
Q4) Which of the following is not a type of tax we typically have to pay?
A)Gift tax
B)Sales tax
C)Retirement tax
D)Property tax
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Insurance: Covering Your Assets
Available Study Resources on Quizplus for this Chatper
88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/65319
Sample Questions
Q1) What is the purpose of an umbrella insurance policy?
A)To protect your assets in the event of a liability lawsuit and if you reach your liability limits on your other policies
B)To protect your assets in the event of a flood or storm damage
C)To protect your assets in the event of water damage
D)To shield your property from hail damage
Q2) A homeowner's or renter's insurance policy usually contains liability insurance for accidents that occur there to safeguard you if someone else should be hurt on your property.
A)True
B)False
Q3) Life insurance protects you at the time of your death by providing a sum of money to cover your financial needs in place of your income.
A)True
B)False
Q4) The insurance declaration page focuses on what items are excluded from coverage. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Investment Basics
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/65318
Sample Questions
Q1) The value of a dollar is
A)driven by the stock market.
B)steadily increasing.
C)controlled by the U.S.Treasury.
D)related to inflation.
Q2) Which instrument is not typical for persons in the independent financial life stage?
A)Direct deposit into savings account
B)529 college savings plan
C)Quality stock
D)Roth IRA
Q3) Over the past 75 years,inflation has grown on average ________ /year,money in the bank has averaged a ________ return,and the stock market has averaged
A)1.1%; 3.3%; 3.3%
B)3.1%; 3.9%; 12.4%
C)12.4%; 3.9%; 3.1%
D)12.4%; 12.4%; 12.4%
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Mutual Funds
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/65317
Sample Questions
Q1) What do the axes on the Morningstar Style Box indicate?
A)The vertical axis shows whether the mutual fund holds the stocks of large,medium,or small capitalized companies.
B)The horizontal axis is based on company valuation,whether the stocks are from value-based companies (based on the price/earnings ratio),growth companies,or a blend of value and growth.
C)Both options are correct.
D)Neither option is correct.
Q2) An advantage of buying mutual funds from a full-service broker or financial planner is ________.
A)no fees or commissions
B)professional advice and help in making your investment decisions
C)knowing that all full-service brokers and financial planners do everything in the best interests of their customers
D)knowing that your returns are guaranteed
Q3) No-load funds often outperform load funds--especially when you consider that 100% of the investment is working for you.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Stocks
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/65316
Sample Questions
Q1) The ________ is a technology-heavy market index.
A)Russell 2000
B)NASDAQ 100
C)S&P 500 Stock Index
D)Dow Jones Industrial Average (Dow)
Q2) 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
Q3) What is the current ratio if the short-term asset balance is $5,000,000 and the short-term liabilities balance is $500,000?
A).01
B)10
C)1
D)100
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Bonds
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/65315
Sample Questions
Q1) Bond call provisions allow the bond issuer to ________ than the current interest rates.
A)sell back the bond before the maturity date,if the coupon rates paid are lower
B)sell back the bond before the maturity date,if the coupon rates paid are higher
C)buy back the bond before the maturity date,if the coupon rates paid are lower
D)buy back the bond before the maturity date,if the coupon rates paid are higher
Q2) You purchased a $10,000 convertible bond from Ajax Corporation at issue.At the time the bond was issued,Ajax's stock traded at $15 per share.Ajax offered a conversion privilege of 20 shares of common stock per $1,000 in bonds.This stock now trades at $60.Assuming there are no costs to convert the bonds to stock,what is the minimum the bond would be trading for on the open market?
A)$10,000 plus accrued interest
B)$11,000 plus accrued interest
C)$3,000 plus accrued interest
D)$12,000
Q3) Some bonds are traded on stock exchanges or in the over-the-counter market.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Real Estate Investments
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/65314
Sample Questions
Q1) What is the difference between equity REITs and mortgage REITs?
A)Equity REITs invest in mortgage loans,and mortgage REITs invest money directly in property.
B)Equity REITs invest money directly in property,and mortgage REITs invest in mortgage loans that finance the development of properties.
C)Equity REITs are riskier and are usually scams while mortgage REITs are never of any risk.
D)None of the options are correct.
Q2) What options do you have in real estate investment if you do not have the time or skill to be a landlord?
A)Stay out of the business
B)Flip real estate
C)Quit your job so you have the time; the tax advantage will be worth it
D)Invest in a real estate investment trust (REIT)
Q3) Which of the following items would be considered real estate property?
A)Boat
B)Motor coach
C)House
D)All options are correct.
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Retirement and Estate Planning
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/65313
Sample Questions
Q1) 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 by providing a majority of your pre-retirement income.
A)True
B)False
Q2) To be safe,you need ________ of your preretirement annual salary to live comfortably at retirement.
A)30%
B)50%
C)60%
D)80%
Q3) Once you start drawing on your Social Security retirement funds,________.
A)your amount is set for life
B)you will receive an adjustment for inflation on your birthday
C)the amount you receive will be recalculated based on your life expectancy and your physician's report of your health
D)you will receive an annual adjustment each January for inflation most years
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Financial Planning for Life
Available Study Resources on Quizplus for this Chatper
23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/65312
Sample Questions
Q1) Frugality is not about being cheap or about deprivation; instead it is about being creative and finding savings and more efficient ways to achieve your objectives.
A)True
B)False
Q2) Which is not a way to simplify your life?
A)Prioritize
B)Minimize
C)Organize
D)Procrastinate
Q3) How often should someone assess their insurance coverage,wills,etc.?
A)Monthly
B)Annually,or whenever major life changes occur
C)Quarterly
D)Whenever they spend money
Q4) When should you review your budget?
A)Once a week
B)Once a month
C)Once a year
D)Whenever you can
To view all questions and flashcards with answers, click on the resource link above. Page 19