Introduction to Financial Literacy
Final Exam Questions
Course Introduction
Introduction to Financial Literacy introduces students to the fundamental principles of personal finance, equipping them with the knowledge and skills necessary to make informed decisions about managing money. The course covers topics such as budgeting, saving, credit and debt management, banking, investing, insurance, and the basics of taxes. Through real-life scenarios and practical exercises, students will develop the ability to plan for their financial future, understand the risks and benefits of financial products, and recognize the impact of financial decisions on their lives and long-term goals.
Recommended Textbook
Personal Finance 4th Canadian Edition by Jack Kapoor
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15 Chapters
1246 Verified Questions
1246 Flashcards
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Page 2
Chapter 1: Personal Financial Planning in Action
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Sample Questions
Q1) Increased consumer spending will usually cause:
A) lower consumer prices.
B) reduced employment levels.
C) lower tax revenues.
D) higher employment levels.
E) lower interest rates.
Answer: D
Q2) Increased consumer spending will usually cause:
A) lower consumer prices.
B) reduced employment levels.
C) lower tax revenues.
D) lower interest rates.
E) higher employment levels.
Answer: E
Q3) Planning to buy a house is an example of a durable product goal.
A)True
B)False
Answer: False
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Chapter 2: Money Management Skills
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75 Flashcards
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Sample Questions
Q1) A person's lifestyle is a reflection of his or her values,goals,career,and family situation.
A)True
B)False
Answer: True
Q2) The payment items that should be budgeted first are
A) variable expenses.
B) investment funds.
C) fixed expenses.
D) unplanned living expenses.
E) entertainment expenses.
Answer: C
Q3) Liabilities are cash and items of value that can be easily converted to cash.
A)True
B)False
Answer: False
Q4) Most Canadians have an adequate savings for emergencies.
A)True
B)False
Answer: False
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Chapter 3: Taxes in Your Financial Plan
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65 Flashcards
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Sample Questions
Q1) The principal purpose of taxes is to control economic conditions.
A)True
B)False
Answer: False
Q2) A tax credit is an amount subtracted directly from the amount of taxes owed.
A)True
B)False Answer: True
Q3) Which of the following is an example of a tax credit?
A)mortgage interest
B)amounts withheld for social insurance
C)individual retirement account contributions
D)caregiver and medical expenses
E)net business income
Answer: D
Q4) Tax assistance from an attorney is less common than using a tax service.
A)True
B)False Answer: True
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Chapter 4: Financial Services: Savings Plans and Payment Accounts
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60 Flashcards
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Sample Questions
Q1) When preparing a bank reconciliation,interest earned on your chequing account is subtracted from the bank statement balance.
A)True
B)False
Q2) A "free" chequing account with a minimum balance of $500 has an opportunity cost of lost interest.
A)True
B)False
Q3) Mortgage and loan companies specialize principally in home mortgages and long-term loans.
A)True
B)False
Q4) A trust has the purpose of
A)solving a person's financial problems.
B)obtaining low-interest loans.
C)handling daily money management activities.
D)managing the assets of a person.
E)improving a person's budgeting skills.
Q5) What are the main types of financial institutions used by consumers?
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Chapter 5: Consumer Credit: Advantages, Disadvantages,
Sources, and Costs
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100 Flashcards
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Sample
Questions
Q1) Which of the following is not an example of revolving credit?
A) a line of credit.
B) a credit card loan.
C) overdraft protection.
D) charge cards.
E) automobile loans.
Q2) Department stores and gasoline companies are good places to obtain your first credit card.
A)True
B)False
Q3) Your friends and neighbors can get credit information about you.
A)True
B)False
Q4) The use of credit indicates personal and financial instability.
A)True
B)False
Q5) A car loan is an example of a consumer loan.
A)True
B)False
Q6) What can you do if your identity is stolen? Page 7
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Page 8
Chapter 6: Consumer Purchasing Strategies and Wise
Buying of Motor Vehicles
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Sample Questions
Q1) Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.
A)True
B)False
Q2) Banks often encourage you to make the maximum payment.
A)True
B)False
Q3) An increasing number of bankruptcy filers are well-educated middle-class baby boomers.
A)True
B)False
Q4) If you declare bankruptcy,you do not have to pay alimony,child support,or educational loans.
A)True
B)False
Q5) What are two key concepts to keep in mind as you shop for credit?
Q6) With a larger down payment,you'll probably pay a higher interest rate on your loan.
A)True B)False
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Chapter 7: Selecting and Financing Housing
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Sample Questions
Q1) Which of the following is typically excluded from a lease agreement?
A) the conditions under which the landlord may enter the apartment.
B) the tenant's right to sublet the rental unit.
C) A list of utilities,appliances etc that are included in the rental amount.
D) the penalty for missing rental payments.
E) restrictions regarding specific activities (e.g.remodeling).
Q2) Most people select a place of residence based on available financial resources,needs,and lifestyle.
A)True
B)False
Q3) Real estate agents will provide you with services using an hourly rate.
A)True
B)False
Q4) Ease of mobility is an advantage of renting.
A)True
B)False
Q5) The amount of the down payment will affect the amount of mortgage a person can afford.
A)True
B)False
10
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Chapter 8: Home and Automobile Insurance
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Sample Questions
Q1) A home made of wood is more expensive to insure than a comparable brick structure.
A)True
B)False
Q2) The purpose of a household inventory is to
A) reduce insurance costs.
B) lower the chance of negligence
C) obtain personal property floater coverage.
D) increase liability coverage.
E) verify owned property.
Q3) The legal responsibility for the financial cost of another person's losses or injuries is referred to as
A) theft.
B) robbery.
C) liability.
D) assigned risk.
E) collusion.
Q4) What factors affect the cost of home insurance?
Q5) What events are commonly covered in a homeowner's insurance policy?
Q6) Which type of automobile insurance is usually considered to be most important?
Page 11
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Chapter 9: Health and Disability Income Insurance
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Sample Questions
Q1) Just about every worker is covered by disability income insurance.
A)True
B)False
Q2) You probably have little or no need for life insurance if you are
A) married and your spouse works.
B) divorced and have two children.
C) a single person living alone or with parents.
D) gainfully employed.
E) a household with several children.
Q3) What are the two types of life insurance? What are the major types and subtypes?
Q4) Even though it is expensive,you should consider the accidental death benefit in a life insurance policy.
A)True
B)False
Q5) Which statement is correct about whole life insurance?
A) Whole life insurance is cheaper than term life.
B) Policy holders overpay in the later years of the policy.
C) Whole life premiums increase with your age.
D) Whole life insurance is the best choice for most people.
E) Whole life insurance builds up cash value.
Page 12
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Chapter 10: Financial Planning With Life Insurance
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Sample Questions
Q1) All except which one of the following are good ways to acquire money for starting an investment program?
A) Pay bills first,and then save a reasonable amount of money for investment.
B) Participate in an elective savings program offered by your employer.
C) Make a special savings effort one month per year.
D) Borrow money specifically for investment purposes.
E) Take advantage of gifts,inheritances,and windfalls.
Q2) Which of the following investments has the best rate of return when adjusted for inflation?
A) savings accounts
B) corporate bonds
C) Canadian treasury bills
D) common stocks
E) preferred stocks
Q3) Desktop information services provide instantaneous access to real-time historical financial data,news and many other services.
A)True
B)False
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Chapter 11: Investing Basics and Evaluating Bonds
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Sample Questions
Q1) Today,it is possible for investors to access a corporation's home page in order to evaluate an investment in its stock.
A)True
B)False
Q2) A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called a
A) dollar cost averaging.
B) dividend reinvestment plan.
C) buy and hold technique.
D) regulated transaction.
E) secured transaction.
Q3) A request that a stock be bought or sold at the current market price is called a ____________ order.
A) market
B) limit
C) stop
D) round
E) discretionary
Q4) What is the primary difference between common stock and preferred stock?
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Chapter 12: Investing in Stocks
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Sample Questions
Q1) A registered coupon bond is registered for interest,but not for the principal amount.
A)True
B)False
Q2) What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?
A) 20.0%
Q3) Because bonds are considered debt financing that must be repaid at maturity,the corporation's financial stability has little effect on the bond's value between the issue date and the maturity date.
A)True
B)False
Q4) A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.
A)True
B)False
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Chapter 13: Investing in Mutual Funds
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Sample Questions
Q1) If a mutual fund charges a front-end load of 3%,how much must the investor pay per unit if the NAVPS is $10.00?
A) $9.70
B) $10.00
C) $10.16
D) $10.31
E) $13.00
Q2) Which of the following statements is true?
A) Real estate funds offered by insurance companies as an alternative to conventional mutual funds.
B) Bond funds seek to achieve a high level of income and liquidity.
C) Mortgage funds have a higher risk then bond funds.
D) Ethical funds are typically guided by moral criteria.
E) Segregated funds are often considered a subset of specialty funds.
Q3) A mutual fund that is eligible for tax credits is referred to as a labour sustenance venture capital corporation.
A)True
B)False
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16
Chapter 14: Starting Early: Retirement and Estate Planning
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Sample Questions
Q1) Which one of the following expenditures for retirees is likely to decrease?
A) food and medical care
B) federal income taxes
C) expenses for leisure activities
D) medical expenses
E) insurance
Q2) At age 65,the life expectancy of a man is 14 years.
A)True
B)False
Q3) Why is it important to review your assets and liabilities before your retirement?
Q4) Which one of the following is a true statement about retirement planning?
A) I should update my retirement plan periodically.
B) My pension benefits will increase to keep pace with inflation.
C) Saving just a little bit won't help.
D) My employer's health insurance plan will cover my medical expenses.
E) Medicare will cover my medical expenses.
Q5) What is the principal difference between a life annuity and a fixed-term annuity?
Q6) How can retirees avoid housing traps?
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Chapter 15: Daily Spending Diary
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Sample Questions
Q1) A handwritten will is called a(n):
A) formal will.
B) holographic will.
C) statutory will.
D) letter of last instruction.
E) informal will.
Q2) In the year of death,the estate's executor must file a final (terminal)tax return.
A)True
B)False
Q3) Never having been married does not eliminate the need to organize your papers.
A)True
B)False
Q4) An inheritance tax is levied on the right of an heir to receive all or part of the estate and life insurance proceeds of a deceased person.
A)True
B)False
Q5) What are the legal aspects of estate planning?
Q6) What is estate planning? What are the personal aspects of estate planning?
Q7) How do wills and trusts help in planning your estate?
Page 18
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