Introduction to Personal Finance Exam
Materials
Course Introduction
Introduction to Personal Finance provides students with foundational knowledge and practical skills required to manage individual and family finances. The course covers key topics such as budgeting, saving, banking, credit management, insurance, taxes, and basic investing. Emphasis is placed on developing responsible financial habits, understanding financial products and services, and making informed decisions to achieve short- and long-term financial goals. Through real-world scenarios and exercises, students gain confidence in handling money and planning for a secure financial future.
Recommended Textbook
Personal Finance 11th Edition by Jack R. Kapoor
Available Study Resources on Quizplus
19 Chapters
2490 Verified Questions
2490 Flashcards
Source URL: https://quizplus.com/study-set/2542
Page 2
Chapter 1: Personal Finance Basics and the Time Value of Money
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/50532
Sample Questions
Q1) A major activity in the planning component of financial planning is:
A) selecting insurance coverage.
B) evaluating investment alternatives.
C) gaining occupational training and experience.
D) allocating current resources for spending.
E) establishing a line of credit.
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) Opportunity costs refer to what a person gives up when making a decision.
A)True
B)False
Answer: True
Q4) What is meant by the term "Time Value of Money?"
Answer: Answers will vary.
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Financial Aspects of Career Planning
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/50531
Sample Questions
Q1) Which of the following trends is most likely to increase domestic career opportunities in manufacturing organizations?
A) Higher interest rates
B) Reduced consumer spending
C) Higher consumer prices
D) Increased imports
E) Increased exports
Answer: E
Q2) The purpose of a screening interview is to:
A) make business contacts.
B) reduce the number of applicants for a job.
C) locate potential people for advancement within the company.
D) judge the best qualified candidates for a position.
E) obtain information on available jobs in an area.
Answer: B
Q3) It is legal for an interviewer to ask you about your marital status.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Money Management Strategy: Financial
Statements and Budgeting
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/50530
Sample Questions
Q1) Allen Arnold has determined that the amount of money he spends on his mortgage payment, car insurance payment, and cable bill totals $1,200 each month. What type of expenses has Allen determined with this calculation?
A) Current liabilities
B) Long term liabilities
C) Net worth
D) Variable expenses
E) Fixed expenses
Answer: E
Q2) Explain why opportunity cost is an important concept in money management.
Answer: Answers will vary.
Q3) A family has a net worth of $156,000 and liabilities of $167,000, what is the amount of their assets?
A) $11,000
B) $156,000
C) $167,000
D) $323,000
E) $452,000
Answer: D
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Planning Your Tax Strategy
Available Study Resources on Quizplus for this Chatper
108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/50529
Sample Questions
Q1) For which of the following types of credit plans is the interest tax deductible?
A) Home equity loan
B) Auto loan
C) Credit card
D) Life insurance policy cash value loan
E) Personal cash loan from a credit union
Q2) What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return?
A) Office audit
B) Correspondence audit
C) Field audit
D) Taxpayer compliance measurement program audit
E) Random audit
Q3) Reductions from gross income for such items as individual retirement account contributions and alimony payments will result in:
A) adjusted gross income.
B) taxable income.
C) earned income.
D) passive income.
E) total exclusions.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Financial Services: Savings Plans and Payment Accounts
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/50528
Sample Questions
Q1) The Truth-in-Savings law requires that financial institutions:
A) provide insurance for savings accounts.
B) send customers monthly bank statements.
C) report annual percentage yield on savings.
D) offer adjustable rate savings accounts.
E) become members of the Federal Reserve System.
Q2) Which CD pays earnings based on the stock market?
A) Bump-up
B) Indexed
C) Callable
D) Global
E) Promotional
Q3) The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.
A) safety
B) cost
C) compounding
D) liquidity
E) convenience
Q4) What are the main types of financial institutions used by consumers?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Introduction to Consumer Credit
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/50527
Sample Questions
Q1) With a revolving line of credit, borrowings are permitted up to a specified limit and for a stated period.
A)True
B)False
Q2) Most of the information in your credit file may be reported for only ______ years.
A) 7
B) 9
C) 11
D) 13
E) 15
Q3) According to a recent survey, what percent of U.S. households carry one or more credit cards?
A) 40
B) 60
C) 75
D) 80
E) 90
Q4) What can you do if your identity is stolen?
Q5) How do creditors determine your credit-worthiness?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Choosing a Source of Credit: The Costs of Credit
Alternatives
Available Study Resources on Quizplus for this Chatper
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/50526
Sample Questions
Q1) What is(are) the signal(s) of potential debt problems?
A) Paying only the minimum balance each month
B) Missing payments or paying late
C) Using savings to pay normal bills
D) Depending on overtime to meet normal expenses
E) All of these are danger signals
Q2) The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.
A)True
B)False
Q3) Which of the following is not true about the Credit CARD Act of 2009?
A) States that teaser rates must be in effect for at least 6 months
B) Makes new disclosure statements clear and more timely
C) Requires card issuers to post their standard card agreements on the Internet
D) Allows card issuers to apply new (higher) interest rates to the existing card balances
E) Requires issuers to mail monthly statements at least 21 days before payment is due
Q4) Explain the Rule of 78s.
Q5) Explain simple interest.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Consumer Purchasing Strategies and Legal Protection
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/50525
Sample Questions
Q1) Which organization specializes in the testing of products for electrical and fire safety?
A) Consumers Union
B) Better Business Bureau
C) Consumer Product Safety Commission
D) Underwriters Laboratories
E) Federal Trade Commission
Q2) A cooperative is designed to:
A) solve consumer complaints.
B) test consumer products for quality.
C) sell products or services to members at reduced prices.
D) obtain brand-name items for less than wholesale cost.
E) lobby for changes in consumer protection laws.
Q3) Near-field communications (NFC) allows consumers to make purchases by waving their smartphones in front of a sensor when paying.
A)True
B)False
Q4) Distinguish between an implied warranty and an express warranty.
Q5) Explain the difference between arbitration and mediation.
Q6) What factors influence most people's buying decisions?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: The Housing Decision: Factors and Finances
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/50524
Sample Questions
Q1) Which of these is a common financial benefit of home ownership?
A) Low security deposit
B) Tax deductibility of the down payment
C) Amortization of the equity
D) Increased property value
E) No maintenance cost
Q2) The most commonly considered factor when selecting a home is the:
A) size of the home.
B) condition of the home.
C) location of the home.
D) local zoning laws.
E) current interest rates.
Q3) During which phase of the home-buying process would you assess types of housing units?
A) Price the property
B) Find and evaluate a property to purchase
C) Obtain financing
D) Determine home ownership needs
E) Close the purchase transaction
Q4) Explain how current interest rates can affect the price of a home.
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Property and Motor Vehicle Insurance
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/50523
Sample Questions
Q1) Georgia Owen was in an accident in which her car was totaled. What part of Georgia's automobile insurance would cover the damage to her car?
A) Bodily injury liability
B) Medical payments coverage
C) Property damage liability
D) Collision
E) Comprehensive physical damage
Q2) The purpose of insurance is to help protect you and your family against financial hardship due to hazard, accident, death, and similar risks.
A)True
B)False
Q3) Starting a small business that may or may not succeed is an example of ___________ risk.
A) speculative
B) pure
C) commercial
D) personal
E) liability
Q4) What coverages are commonly included in a homeowner's insurance policy?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Health, Disability, and Long-Term Care Insurance
Available Study Resources on Quizplus for this Chatper
159 Verified Questions
159 Flashcards
Source URL: https://quizplus.com/quiz/50522
Sample Questions
Q1) Which of the following is (are) an innovative way(s) concerned groups are containing health care costs?
A) Incentives to encourage preventive care
B) Encouragement of prepaid group practices
C) Establishment of community education programs
D) Encouragement by doctors to pay cash for routine medical costs
E) All of these
Q2) Hospital expense insurance pays part or all of the hospital bills for room, board, and other charges.
A)True
B)False
Q3) The affordability of which one of these is one of the most important social issues of our time?
A) Health care
B) Clothing
C) Automobiles
D) Vacations
E) Day care
Q4) What is disability income insurance? What are the major sources of disability income insurance?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Life Insurance
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/50521
Sample Questions
Q1) Jerry Lewis is thinking about purchasing some life insurance. He goes to a company that is owned by shareholders. What type of life insurance company has he visited?
A) Stock
B) Debt
C) Mutual
D) Exclusionary
E) Cooperative
Q2) A rider is any document attached to the policy that modifies its coverage by adding or excluding specified conditions or altering its benefits.
A)True
B)False
Q3) Which type of life insurance policy combines term insurance and investment elements?
A) Whole life
B) Ordinary life
C) Universal life
D) Adjustable life
E) Extended life
Q4) Explain how a guaranteed insurability option works and why it is beneficial.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Investing Fundamentals
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/50520
Sample Questions
Q1) Which one of the following investments offers the least amount of growth potential?
A) Real estate
B) Common stock
C) Mutual funds
D) Options
E) Preferred stock
Q2) An emergency fund should be deposited in a:
A) savings account at the highest available interest rate.
B) six-month certificate of deposit.
C) checking account.
D) safe place at home.
E) safe deposit box in a bank vault.
Q3) The decision to establish an investment plan is an important first step to accomplishing your financial goals.
A)True
B)False
Q4) Mutual funds range from very conservative to extremely speculative investments.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Investing in Stocks
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/50519
Sample Questions
Q1) To raise capital, many corporate financial managers prefer selling common stock because:
A) it doesn't have to be repaid until 10 to 15 years after it has been issued.
B) interest payments to stockholders are lower than interest paid to a bank.
C) common shareholders have no voting rights.
D) interest paid to stockholders is tax deductible.
E) the money obtained from stockholders does not have to be repaid.
Q2) Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The stock currently sells for $85 per share. The company earned $5 million after taxes. The annual dividend is $0.50 per share. The firm has assets of $125 million and liabilities of $25 million. What is the P-E ratio?
A) 10
B) 11
C) 13
D) 17
E) 20
Q3) Explain what dollar cost averaging is and why an investor would use the technique.
Q4) What is the primary difference between common stock and preferred stock?
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Investing in Bonds
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/50518
Sample Questions
Q1) Which of the following bonds would have the lowest interest rate? All of the bonds have 10 years to maturity.
A) Bond that is rated CCC
B) Debenture bond rated BBB
C) Mortgage bond rated AAA
D) Convertible bond rated BBB
E) High-yield bond rated CCC
Q2) Anyone who is in physical possession of a bearer bond can collect interest payments and the face value of the bond at maturity regardless of whether or not they are the rightful owner.
A)True
B)False
Q3) A type of bond that is unsecured and gives bondholders a claim secondary to that of other designated bondholders with respect to both income and assets is called a:
A) debenture bond.
B) mortgage bond.
C) subordinated debenture.
D) preemptive bond.
E) treasury bond.
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/50517
Sample Questions
Q1) The New American Enterprise Mutual Fund's portfolio is valued at $120 million. The fund has liabilities of $4 million, and the investment company sponsoring the fund has issued 5,800,000 shares. What is the fund's net asset value?
A) $120
B) $58
C) $40
D) $30
E) $20
Q2) Approximately ____________ percent of all mutual funds are open-end funds.
A) 5
B) 6
C) 30
D) 72
E) 92
Q3) The turnover ratio of a mutual fund measures the:
A) length of time a manager has been in charge of the fund.
B) amount of profit the fund earns from one investment period to the next.
C) number of months the average investor holds the fund before selling.
D) percentage of a fund's holdings that have changed during a 12-month period.
E) percentage of institutional investors who own the fund.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Investing in Real Estate and Other Investment
Alternatives
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/50516
Sample Questions
Q1) Home ownership rates are highest among those individuals in which age group?
A) Under 34
B) 35 - 44
C) 45 - 54
D) 55 - 64
E) 65 and over
Q2) Gold bullion poses storage problems.
A)True
B)False
Q3) Many investors buy land with the intention of subdividing it.
A)True
B)False
Q4) You gain entry to a shopping center investment by investing as little as $5,000 in a limited partnership.
A)True
B)False
Q5) The Tax Reform Act of 1986 adversely affected the investment potential of real estate syndicates.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Starting Early: Retirement Planning
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/50515
Sample
Questions
Q1) Pension plan portability enables you to carry earned benefits from one employer's pension plan to another's when you change jobs.
A)True
B)False
Q2) You can get a reverse mortgage annuity if:
A) you are willing to sell your house immediately.
B) you buy a new home and pay only a minimal down payment.
C) your mortgage is largely or completely paid off.
D) you owe more in monthly mortgage interest than the annuity amount.
E) you are willing to allow your principal mortgage balance to increase monthly.
Q3) Staying in their present home is the alternative preferred by most people who are approaching retirement.
A)True
B)False
Q4) The Social Security office will require you to provide proof of your age.
A)True
B)False
Q5) You can keep money in most retirement plans indefinitely.
A)True
B)False
20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Estate Planning
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/50514
Sample Questions
Q1) The American Taxpayer Relief Act of 2012 provides a permanent gift and estate tax exemption of how much for individuals?
A) $2.0 million
B) $4.5 million
C) $5.25 million
D) $6.75 million
E) $8.0 million
Q2) Your executor can be which of the following:
A) a family member.
B) a friend.
C) an attorney.
D) an accountant.
E) Your executor can be any of these.
Q3) A formal will may be either typed or on a preprinted form.
A)True
B)False
Q4) A credit-shelter trust is perhaps the most common estate-planning trust.
A)True
B)False
Q5) What are the federal and state tax considerations in estate planning?
Page 21
To view all questions and flashcards with answers, click on the resource link above.