Managing Personal Resources
Practice Exam
Course Introduction
Managing Personal Resources focuses on equipping students with the knowledge and skills necessary to effectively manage time, finances, energy, and personal talents. The course covers principles of goal setting, budgeting, decision-making, and resource allocation, enabling students to make informed choices that enhance their personal and professional lives. Emphasis is placed on developing strategies for balancing competing demands, fostering self-awareness, and cultivating lifelong habits that promote well-being and productivity. Through practical exercises and real-world examples, students learn to assess their resources, set realistic objectives, and implement action plans that align with their values and aspirations.
Recommended Textbook
Personal Finance 4 4th Edition by Lawrence J. Gitman
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15 Chapters
2587 Verified Questions
2587 Flashcards
Source URL: https://quizplus.com/study-set/3514 Page 2
Chapter 1: Understanding the Financial Planning Process
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/69803
Sample Questions
Q1) Long-term goals are typically for periods of over 6 years.
A)True
B)False
Answer: True
Q2) For most people,debts [increase constantly | increase and then decrease] during their lifetimes.
Answer: B
Q3) The primary determinant of your standard of living is your [wealth | propensity to consume].
Answer: A
Q4) About 20% of Americans say retirement planning is their most pressing financial concern.
A)True
B)False
Answer: False
Q5) Utility refers to the amount of satisfaction a person gets from buying certain items.
A)True
B)False
Answer: True
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Chapter 2: Using Financial Statements and Budgets
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Using time value of money is important when planning for long-term goals.
A)True
B)False
Answer: True
Q2) Financial planning is necessary only if you earn a lot of money.
A)True
B)False
Answer: False
Q3) Another term sometimes used instead of net worth is:
A) assets.
B) net debts.
C) long-term liabilities
D) equity.
E) liquid assets.
Answer: D
Q4) Another term sometimes used for net worth is [collateral | equity].
Answer: B
Q5) Rosa and Jose have liquid assets of $5,000 and other assets of $50,000.Their total liabilities equal $26,000.What is their net worth?
Answer: 11ea84e6_2e09_572f_abcc_134f20909c44_TB3853_00_TB3853_00
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Chapter 3: Preparing Your Taxes
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) The federal income tax is:
A) optional.
B) regressive.
C) progressive.
D) flat.
E) none of the above
Answer: C
Q2) Interest you paid on your [car | house] loan could be deducted.
Answer: B
Q3) A capital gain on an investment held for more than 12 months would be taxed at the same rate as ordinary income.
A)True
B)False
Answer: False
Q4) The IRS definition of [gross | adjusted] income is "all income that is subject to federal taxes."
Answer: A
Q5) A tax credit could result from [owning a home | adopting a child].
Answer: B
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Chapter 4: Managing Your Cash and Savings
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189 Flashcards
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Sample Questions
Q1) NOW accounts are appropriate for people who need to keep substantial amounts of money in a checking account.
A)True
B)False
Q2) In the wake of the recent financial crisis,the U.S.personal saving rate has [increased | decreased].
Q3) [All | Some] banks include canceled checks with the monthly statement.
Q4) Treasury bills are sold at their face value.
A)True
B)False
Q5) Banks [may | must] state interest rates they pay as Annual Percentage Yield.
Q6) Money market deposit accounts are insured by the Federal Deposit Insurance Corporation (FDIC)if purchased at a bank.
A)True
B)False
Q7) One can avoid early withdrawal penalties on certificates of deposit (CDs)by purchasing them through brokerage firms.
A)True
B)False
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Chapter 5: Making Automobile and Housing Decisions
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198 Verified Questions
198 Flashcards
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Sample Questions
Q1) Variable auto ownership costs are most dependent on:
A) driver behavior.
B) miles driven.
C) city lived in.
D) down payment.
E) periodic renewal of vehicle registration.
Q2) The price of the car you are leasing is called the:
A) money factor.
B) capitalized cost.
C) residual value.
D) purchase option.
E) capitalized cost reduction.
Q3) Dick and Jane (and their dog Spot)have just purchased a house and are calculating how much money they will need when the closing day rolls around.The purchase price is $200,000.They will make a 20% down payment,and they must pay 2 points on the loan.Closing costs should be 3% of the purchase price.What is the total dollar amount they will need at closing?
Q4) Fixed automobile costs increase as the number of miles driven increase.
A)True
B)False
Page 7
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Chapter 6: Using Credit
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164 Flashcards
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Sample Questions
Q1) The first step to take in establishing a credit history is to [get a credit card | open checking and savings accounts].
Q2) Using more than 20 percent of one's take-home income to pay off consumer debt is one of the signs that one may be headed for serious credit problems.
A)True
B)False
Q3) The required monthly payment on an open account will be the smaller of a minimum dollar amount or a specified percentage of the balance.
A)True
B)False
Q4) Individuals with better credit ratings usually can secure higher credit limits.
A)True B)False
Q5) A home equity lines of credit is one of the [most | least] expensive forms of consumer credit.
Q6) Unsecured lines of credit provide tax advantages if you itemize deductions.
A)True B)False
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Chapter 7: Using Consumer Loans
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147 Flashcards
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Sample Questions
Q1) When simple interest is used,the stated rate of interest on single-payment loans is equal to the annual percentage rate (APR).
A)True
B)False
Q2) The average annual cost of a college education at a private college is about [$15,000|$42,000].
Q3) Installment loans are repaid in monthly payments.
A)True
B)False
Q4) Consolidation loans are often used to help borrowers straighten out a critical financial situation.
A)True B)False
Q5) The best loan rates for consumer loans are usually from [savings and loan associations | consumer finance companies].
Q6) The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.
A)True
B)False
Page 9
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Chapter 8: Insuring Your Life
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153 Verified Questions
153 Flashcards
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Sample Questions
Q1) You may reinstate your lapsed life insurance policy without answering health related questions again.
A)True
B)False
Q2) Jonathan Blake purchased an insurance policy of $150,000,and nominated his wife,Rebecca Blake as his primary beneficiary,and his son,Nathan Blake as his secondary beneficiary.Assuming that Rebecca and Nathan survive Jonathan,the benefit of the insurance shall be received by [Rebecca Blake | Nathan Blake].
Q3) Deciding to sell a motorcycle would be an example of risk avoidance.
A)True
B)False
Q4) A guaranteed purchase option is when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary.
A)True
B)False
Q5) The beneficiary [will | will not] have to pay income taxes on the proceeds from a life insurance policy.
Q6) Most term insurance policies [are | are not] renewable.
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Chapter 9: Insuring Your Health
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Group health insurance premiums are usually lower than individual health insurance premiums.
A)True
B)False
Q2) Disability income benefits are taxable when the policy premiums were paid by the [employer | employee].
Q3) Which of the following types of plans pays for some medical costs even when the insured decides to go out of the provider network (without a referral)for services?
A) HMO
B) IPA
C) PPO
D) POS
E) All of the above
Q4) Point-of-service (POS)plans are hybrid HMOs that allow members to go outside of network.
A)True
B)False
Q5) The average age of the American population is [decreasing | increasing].
Q6) Long-term care [does | does not] have a deductible.
Page 11
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Chapter 10: Protecting Your Property
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189 Flashcards
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Sample Questions
Q1) A claims adjustor typically works for a(n) [insurance company | claimant].
Q2) Financial responsibility laws in most states are high enough to adequately meet one's auto liability needs.
A)True
B)False
Q3) In order to collect under uninsured motorists coverage,three specific conditions must be in effect.They are:
A) another motorist was at fault; this motorist has no available insurance coverage; and damages were incurred.
B) another motorist was at fault; this motorist has insurance coverage; and damages were incurred.
C) you were at fault; the other motorist has insurance coverage; and damages were incurred.
D) you were at fault; the other motorist has no available insurance coverage; and damages were incurred.
E) either a or d
Q4) A captive agent represents many insurance companies.
A)True
B)False
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Chapter 11: Investment Planning
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168 Verified Questions
168 Flashcards
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Sample Questions
Q1) Which of the following is least likely to be an investment objective?
A) Enhance current income
B) Save for a major purchase
C) Pay monthly bills
D) Accumulate funds for retirement
E) Seek shelter from taxes
Q2) The most widely followed stock average is the:
A) Dow Jones Industrial Average.
B) Standard & Poor's Index.
C) New York Stock Exchange Index.
D) American Stock Exchange Index.
E) Wall Street Journal Index.
Q3) The axiom that explains diversification is [Don't cry over spilt milk | Don't put all of your eggs in one basket].
Q4) The single most important reason for investing is for retirement.
A)True
B)False
Q5) The owner of a bond would expect to receive [steady | variable] annual income.
Q6) An investment offering a high current income would likely be more desirable for [a young couple | a retired couple].
Page 13
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Chapter 12: Investing in Stocks and Bonds
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186 Verified Questions
186 Flashcards
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Sample Questions
Q1) Changes in the general level of prices within an economy produce [purchasing power risk | interest rate risk].
Q2) The relevant sale or invoice price of a bond to the buyer,which adds the accrued interest to the quoted price,is its:
A) par value.
B) clean price.
C) negotiated price.
D) dirty price.
E) discount price.
Q3) The approximate yield-to-maturity of a bond is greater than the stated rate of interest when:
A) purchased at face value.
B) purchased at a discount.
C) purchased at a premium.
D) market rates of interest decline.
E) market rates of interest are constant.
Q4) [|Speculative stocks | Growth stocks] are stocks whose earnings and/or market price have consistently increased over time at a rate well above average.
Q5) [Cash |Stock] dividends are the most common form of dividends.
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Chapter 13: Investing in Mutual Funds
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170 Flashcards
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Sample Questions
Q1) There are [more | fewer] mutual funds than there are stocks listed on the New York Stock Exchange.
Q2) Aggressive growth funds typically buy stocks with high PE ratios and stocks with volatile price fluctuations.
A)True
B)False
Q3) Dividend income,capital gains distributions received,and changes in the fund's share price are all sources of return for a mutual fund.
A)True
B)False
Q4) Balanced funds invest in a mix of utility and growth equities.
A)True
B)False
Q5) Closed-end investment companies are characterized by:
A) number of shares determined by demand.
B) price based on net asset value per share.
C) variable transaction costs.
D) availability for sale or purchase on security markets.
E) value dependent on quantity of shares held.
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Chapter 14: Planning for Retirement
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208 Flashcards
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Sample Questions
Q1) Self-directed retirement accounts such as Keogh and SEP accounts can be set up at: A) banks.
B) brokerage houses.
C) insurance companies.
D) mutual fund companies.
E) all of the above
Q2) A Roth IRA will be funded with [pre | post] tax dollars.
Q3) The Social Security administration [can | cannot] give you a fairly accurate estimate of benefits you can expect in the future.
Q4) The period during which annuity payments are made to the individual is called the [distribution | survivorship] period.
Q5) Under a defined benefit pension plan,an employee [is | is not] able to estimate what his pension payment would be upon retirement.
Q6) A vested employee has a right to receive benefits from an employer's retirement funds even if he no longer works there.
A)True
B)False
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Page 16
Chapter 15: Preserving Your Estate
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160 Flashcards
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Sample Questions
Q1) A valid will cannot be contested.
A)True
B)False
Q2) Mike and Tristan,father and son,own property as tenants in common.Tristan [can | cannot] write a valid will leaving his part of this property to Ella Fitzgerald.
Q3) Gift giving can reduce estate tax liability.
A)True
B)False
Q4) Intestacy results from dying without a valid will.
A)True
B)False
Q5) The living will states:
A) the distribution of assets while alive.
B) the duration of medical treatments when you are terminally ill.
C) that an agent may make health care decisions if you are unable to do so.
D) that while alive,only you may make changes to your will.
E) all of the above
Q6) Claudia had not yet signed her newly written will when she died.Her new will [would | would not] be valid.
Page 17
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