Money Management
Textbook Exam Questions
Course Introduction
Money Management is a foundational course designed to equip students with the essential skills and knowledge to effectively manage personal finances. The course covers key topics such as budgeting, saving, investing, credit management, debt reduction, and financial planning for both short-term and long-term goals. Students will learn how to make informed decisions regarding income, expenses, banking, and financial products, while also exploring the psychological and behavioral aspects of spending and saving. Through practical exercises and real-life scenarios, this course empowers students to develop sound financial habits and strategies for achieving financial security and independence.
Recommended Textbook
PFIN 6 6th Edition by Randall Billingsley
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15 Chapters
1162 Verified Questions
1162 Flashcards
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Chapter 1: Understanding the Financial Planning Process
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) It is very easy to change your partner's financial style,so there is no need for financial planning to resolve conflicts regarding money matters.
A)True
B)False
Answer: False
Q2) Our ____________ is an important factor in determining how well we live.
A)income
B)marital status
C)credit
D)deflation
Answer: A
Q3) Financial planning takes place in a dynamic economic environment created by the actions of the government,business,and consumers.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Using Financial Statements and Budgets
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Which of the following is true of budgets?
A)Budgets are detailed forward looking financial reports based on expected income and expenses.
B)Budgets describe a person's financial position at a given point in time.
C)Budgets measure a person's financial performance at a given point in time.
D)Budgets describe a person's financial goals over a specific period of time.
E)Budgets are historical documents that tell an individual how he or she has performed in the past.
Answer: A
Q2) A detailed forecast used to monitor and control expenses is called a(n)____________.
A)balance sheet
B)profit and loss account
C)budget
D)income and expense statement
Answer: C
Q3) Financial planning is necessary only if an individual earns a lot of money.
A)True
B)False
Answer: False
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Chapter 3: Preparing Your Taxes
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81 Verified Questions
81 Flashcards
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Sample Questions
Q1) Mr.and Mrs.Davenport,aged 40 and 38,respectively,have three children aged 3,6,and 13.Their financial details for 2015 are as follows: Adjusted gross income (AGI)- $65,000
Unreimbursed medical expenses - $6,750
The Davenports' claim for itemized deductions for medical expenses is _____.
A)$0
B)$250
C)3,500
D)$2,750
E)$4,500
Answer: B
Q2) Your income tax withholding is dependent on:
A)your age and educational qualification.
B)the number of deductions claimed by your spouse.
C)your income level and the number of withholding allowances you have claimed.
D)the number of standard deductions you have claimed.
E)the number of withholding allowances allowed by your employer.
Answer: C
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Chapter 4: Managing Your Cash and Savings
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Factors that typically influence the choice of where to maintain a checking account are:
A)convenience,inflation,tax rates,and cost.
B)convenience,inflation,and services.
C)cost,inflation,tax rates,and services.
D)convenience,services,and cost.
E)convenience,services,GDP,and cost.
Q2) Compared to other depository financial institutions,credit unions:
A)are more beneficial to all kinds of consumers.
B)pay lower interest on savings to their members.
C)have a greater number of account holders.
D)have a greater number of branches.
E)charge lower rates on loans to their members.
Q3) When doing an account reconciliation,interest earned on your account should be:
A)deducted from your checkbook ledger.
B)added to your checkbook ledger.
C)ignored because the bank has already recorded it.
D)listed as outstanding.
E)compared to your interest calculations.
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Page 6
Chapter 5: Making Automobile and Housing Decisions
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer,and negotiates the price upward prior to signing the sales agreement.
A)True
B)False
Q2) The market price of a house is $125,000,and the home buyer borrows $100,000.Two points are equal to $2,000.
A)True
B)False
Q3) When you lease your apartment from a nonprofit corporation that owns the building and you own a share of the nonprofit corporation,you own:
A)a single family home.
B)a cooperative apartment.
C)a condominium.
D)a row house.
E)a mobile home.
Q4) The job of a mortgage banker is to locate conventional loans for clients.
A)True
B)False
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Chapter 6: Using Credit
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113 Verified Questions
113 Flashcards
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Sample Questions
Q1) Paying a loan ahead of schedule is one way to build a good credit history.
A)True
B)False
Q2) It is recommended that you never give your credit card account number over the phone to people or organizations who call you.
A)True
B)False
Q3) A person who pays off his credit balance every month should look for a credit card with a ____________.
A)long grace period
B)high annual fee
C)high interest rate
D)specified method of calculating balance
Q4) AChapter 13 bankruptcy filing would result in the discharge of most of your debts.
A)True
B)False
Q5) A debit card looks and works like a credit card.
A)True
B)False
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Chapter 7: Using Consumer Loans
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85 Verified Questions
85 Flashcards
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Sample Questions
Q1) Consumer loans,like open account credits,result from a rather informal process.
A)True
B)False
Q2) ____________ obtain funds from their stockholders and through open market borrowing.
A)Credit unions
B)Consumer finance companies
C)Commercial banks
D)Life insurance companies
Q3) A single-payment loan is advantageous to a borrower only if:
A)the interest rate is more than that on an installment loan offered by commercial banks.
B)funds are expected to be available in the future to repay the loan in a lump sum.
C)the finance charges are calculated using the discount method.
D)the finance charges are calculated using the simple interest method.
E)it has a collateral note.
Q4) The debt safety ratio indicates the total assets owned by an individual.
A)True
B)False
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Chapter 8: Insuring Your Life
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85 Verified Questions
85 Flashcards
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Sample Questions
Q1) Which of the following is true of risk avoidance?
A)Risk avoidance is any activity that helps evade an act that creates a risk.
B)Risk avoidance is any activity that increases the chance that a loss will occur.
C)Risk avoidance is any activity that lessens the severity of loss once it occurs.
D)Risk avoidance is an act that reduces the probability that a loss will occur.
E)Risk avoidance is an effective way to handle small exposures to loss when insurance is too expensive.
Q2) ___________ is an effective way to handle small exposures to loss when insurance is too expensive.
A)Loss assumption
B)Risk assumption
C)Risk prevention
D)Loss control
Q3) It is not possible to avoid ___________.
A)loss control
B)most risks in your life
C)accumulating savings
D)making investments
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10
Chapter 9: Insuring Your Health
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) The Medicare co-insurance payment is typically:
A)0 percent.
B)50 percent.
C)10 percent.
D)20 percent.
E)75 percent.
Q2) When trying to determine your disability income needs,you should consider your available disability benefits from employers,income needs,and:
A)Social Security benefits.
B)wage policy.
C)non-monetary incentives.
D)flexible benefits.
E)income tax bracket.
Q3) Medicare and Medicaid are administered by hospitals and physicians.
A)True
B)False
Q4) Living a healthy lifestyle is an example of loss prevention and control.
A)True
B)False
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Chapter 10: Protecting Your Property
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) A liability suit could result against you if:
A)lightning strikes your home.
B)your son falls down the stairs of your home.
C)your automobile is stolen.
D)your dog bites your neighbor.
E)smoke from the fireplace fills your house.
Q2) A house with a replacement value of $110,000 is currently insured for $90,000.The house is damaged in a windstorm,causing a loss of $15,000.The insurance company will pay an amount equal to $15,000 less the deductible.
A)True
B)False
Q3) Insurance policies provide the opportunity for claims arbitration to settle any disputed liability claims.
A)True
B)False
Q4) Uninsured motorists protection usually provides protection to the insured's car if a hit-and-run incident occurs.
A)True
B)False
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Chapter 11: Investment Planning
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79 Verified Questions
79 Flashcards
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Sample Questions
Q1) A bear market condition is associated with:
A)investor optimism.
B)declining securities prices.
C)economic recovery.
D)increased tax rate.
E)high returns.
Q2) You have inherited $250,000.You have decided that since you don't need the money currently,you should invest the money in order to meet future expenses.After seeking advice,you decide on an asset allocation plan that puts 10 percent in short-term securities,75 percent in equities,and 15 percent in bond funds.How much money would you put in each category? (Show all work)
Q3) Which of the following is a characteristic of organized securities exchanges?
A)Organized securities exchanges facilitate the trading of unlisted securities with the issuer.
B)Prospectus is primarily traded in organized exchanges.
C)Organized securities exchanges commonly use pink sheets for trading.
D)Organized securities exchanges deal in mutual funds only.
E)Organized securities exchanges are also are known as broker market.
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Chapter 12: Investing in Stocks and Bonds
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) When a bond is sold between coupon payment dates,the buyer pays the seller for the __________,which is the prorated share of the upcoming coupon payment.
A)accrued interest
B)prepaid interest
C)bond premium
D)bond discount
Q2) Low price/earnings ratios indicate limited or low investor confidence.
A)True
B)False
Q3) The quoted price of a bond minus accrued interest is the __________.
A)clean price
B)full price
C)negotiated price
D)par value
Q4) Bondholders will receive interest payments after the stockholders receive dividends. A)True
B)False
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14
Chapter 13: Investing in Mutual Funds, ETFS and Real Estate
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) A closed-end investment company that invests in various types of income-producing properties and mortgage loans is a:
A)hybrid real estate investment trust.
B)blind pool real estate syndicate.
C)real estate general partnership.
D)hybrid limited real estate partnership.
E)mortgage real estate investment trust.
Q2) _____ funds are highly speculative and seek large profits from capital gains.
A)Balanced
B)Growth
C)Equity income
D)Aggressive growth
E)Exchange traded
Q3) Exchange traded mutual funds (ETFs):
A)are traded throughout the day on stock exchanges.
B)are closed-end funds with a fixed number of shares outstanding.
C)always distribute their capital gains to fund holders,resulting in low taxes.
D)are actively managed by investors,resulting in high costs and high taxes.
E)fill their buy and sell orders at the closing prices at the end of the trading day.
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Page 15
Chapter 14: Planning for Retirement
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48 Flashcards
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Sample Questions
Q1) Which of the following pension plans enables an employee to estimate what his or her pension payment would be upon retirement?
A)A Keogh plan
B)A profit-sharing plan
C)A defined benefit plan
D)A defined contribution plan
E)A 401(k)plan
Q2) The two ways to pay the premiums for annuities are single premium and:
A)refundable premium.
B)premium in future.
C)premium in installments.
D)guaranteed premium.
E)lateral premium.
Q3) The third step in retirement planning is to formulate an investment program.
A)True
B)False
Q4) Profit-sharing plans enable employees to participate in the earnings of their employer.
A)True
B)False
Page 16
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Chapter 15: Preserving Your Estate
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53 Verified Questions
53 Flashcards
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Sample Questions
Q1) A unified transfer tax (UTT)credit is unique to an individual.
A)True
B)False
Q2) Which of the following is true about the review of estate plans?
A)Estate planning and review is a very simple process without any legal hassles.
B)Periodic reviews and revisions are required to update the plan.
C)Life events like disability and job change do not influence the review of estate plans.
D)Estates are exempted from taxes when there is an intestacy,which makes a review process redundant.
E)Transfer costs are not applicable to the transfer of estates and,therefore,will not affect the review plan.
Q3) The transfer of a life insurance policy to the trust must be at least __________ years before death or it is ignored,in which case the life insurance benefits are included in the taxable estate.
A)three
B)four
C)five
D)six
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