Personal and Family Finance Exam
Questions
Course Introduction
Personal and Family Finance explores the fundamental principles of financial decision-making for individuals and households. The course covers topics such as budgeting, saving, credit management, debt reduction, insurance, investment strategies, tax planning, and retirement preparation. Students will learn how to set financial goals, analyze their personal financial situation, develop spending plans, and make informed financial choices to achieve long-term stability and security. The course also examines financial challenges commonly faced by families and introduces tools and techniques for managing resources effectively throughout the various stages of life.
Recommended Textbook
Personal Finance 7th Canadian Edition by Jack Kapoor
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15 Chapters
1696 Verified Questions
1696 Flashcards
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Page 2
Chapter 1: Personal Financial Planning: An Introduction
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks
A)measurable terms.
B)a realistic perspective.
C)specific actions.
D)a tangible end.
E)a time frame.
Answer: E
Q2) The changing cost of money is referred to as ____________ risk.
A)interest-rate
B)inflation
C)economic
D)trade-off
E)personal
Answer: A
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 Strategy: Financial
Statements and Budgeting
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Opportunity cost refers to:
A)current spending habits.
B)changing economic conditions that affect a person's cost of living.
C)storage facilities to make financial documents easily available.
D)trade-offs associated with financial decisions.
E)avoiding the use of consumer credit.
Answer: D
Q2) If a family plannedto spend $370 for food during March but only spent $348, this difference would be referred to as a A)surplus.
B)deficit.
C)fixed living expense.
D)budget reduction.
E)contribution to net worth.
Answer: A
Q3) A personal cash flow statement presents income and outflows of cash for a given time period, such as a month.
A)True
B)False
Answer: True
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Chapter 3: Planning Your Tax Strategy
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) Taxable income is the total earnings of a person.
A)True
B)False
Answer: False
Q2) What is the marginal federal tax rate as of 2016 for an income of $40,000
A)15%
B)20.5%
C)26%
D)29%
E)33%
Answer: A
Q3) How many days after the end of the year are you allowed to still contribute to an RRSP and still claim it for the most recent take year?
A)15
B)30
C)45
D)60
E)90
Answer: D
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Page 5
Chapter 4: Banking Services of Financial Institutions
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) A regular savings account usually offers a higher rate of return to savers than other savings plans.
A)True
B)False
Q2) What is a drawback of a Guaranteed Investment Certificate?
A)Low rate of return
B)Minimum deposit
C)Service charges
D)High minimum balance required
E)Not guaranteed
Q3) ATM fees may be different in different geographic areas.
A)True
B)False
Q4) Kevin Friedman only needs to write a couple of cheques each month.Which type of chequing account would best serve his needs?
A)an interest-earning chequing account
B)an activity account
C)an EFT account
D)a share draft account
E)a NOW account
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Chapter 5: Introduction to Consumer Credit
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) You should sign your new credit cards as soon as they arrive.
A)True
B)False
Q2) Your friends and neighbors can get credit information about you.
A)True
B)False
Q3) If your put a trip on your credit card that charges you an APR of 19.99% and make the minimum monthly payment of $45 how long will it take to pay off the credit card debt (in months)?
A)24
B)36
C)49
D)60
E)96
Q4) Perhaps the greatest disadvantage of using credit is the temptation to overspend. A)True
B)False
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Chapter 6: Choosing a Source of Credit: The Costs of Credit Alternatives
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113 Verified Questions
113 Flashcards
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Sample Questions
Q1) What is monthly payment for a $20,000 amortized loan to purchase a car payable over 3 years at an annual interest rate of 6%?
A)$387
B)$556
C)$578
D)$608
E)$588
Q2) Compounding the quarterly percentage rate four times a year is equivalent to:
A)the annual percentage rate (APR) quoted by a financial institution.
B)the annual percentage rate (APR) compounded semi-annually.
C)the effective annual rate (EAR) annually.
D)the effective annual rate (EAR) semi-annually
E)the effective annual rate (EAR) quarterly.
Q3) The type of bankruptcy or proposal that has increased the most from 1997 to 2016 is:
A)Personal proposals
B)Business proposals
C)Personal bankruptcies
D)Business Bankruptcy
E)Government Bankruptcy
Page 8
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Chapter 7: The Finances of Housing
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109 Flashcards
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Sample Questions
Q1) Which of the following would increase the amount that a person could afford to spend on a home?
A)higher financial obligations
B)decreased interest rates
C)increased down payment
D)decreased family income
E)increased monthly living expenses
Q2) Renting is more advantageous than buying a home for
A)lower short-term living costs.
B)financial benefits.
C)long-term investment purposes.
D)receiving tax benefits.
E)permanence of residence.
Q3) The purpose of a counteroffer is to
A)negotiate the purchase price.
B)reduce mortgage payments.
C)lower real estate property taxes.
D)avoid paying points at closing.
E)avoid paying the real estate agent's commission.
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Page 9
Chapter 8: Home and Automobile Insurance
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99 Verified Questions
99 Flashcards
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Sample
Questions
Q1) Risks such as fire, theft, glass breakage, falling objects, vandalism, wind, hail, flood, tornado, lightning, earthquake, avalanche, or damage caused by hitting an animal are covered by what type of auto insurance?
A)Bodily injury
B)Accident Benefits
C)Uninsured motorist's protection
D)Property damage
E)Comprehensive physical damage
Q2) Personal articles endorsement is an additional property insurance to cover the damage or loss of a specific item of high value.
A)True
B)False
Q3) Which of the following coverage's would pay for medical care for people who were injured in your automobile?
A)comprehensive
B)bodily injury liability
C)collision
D)accident benefits
E)no-fault insurance
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Page 10
Chapter 9: Life, Health, and Disability Insurance
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) You should aim for a disability benefit amount that when added to your other income will equal about 90 percent of your gross pay.
A)True
B)False
Q2) In most cases, your employer pays part or all of the cost of disability income protection plan.
A)True B)False
Q3) The policy loan provision does not permit you to borrow any amount up to the cash value of the policy.
A)True
B)False
Q4) Which of the following is the most common settlement option?
A)life income option.
B)limited installment payment.
C)lump-sum payment.
D)variable installment payment.
E)proceeds left with the company.
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Chapter 10: Fundamentals of Investing
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126 Flashcards
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Sample Questions
Q1) The nationwide average increase is just over 7 percent for real estate investments.
A)True
B)False
Q2) A type of investment that combines and invests the funds of many investors and manages it with a professional manager is called a(n)
A)chequing account.
B)securities exchange.
C)guaranteed investment certificate.
D)mutual fund.
E)option fund.
Q3) Dividends and interest income are taxed as long-term capital gains under the current tax laws.
A)True
B)False
Q4) An elective savings program is when an individual cuts back on spending for one to two months to obtain additional money for investment purposes.
A)True
B)False
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Page 12
Chapter 11: Investing in Stocks
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) You shouldn't be wary of any stocks that you learn about on financial bulletin boards, chat room, newsgroups or email.
A)True
B)False
Q2) Which of the following is a long-term stock investment technique?
A)Purchasing on margin
B)Selling short
C)Dollar cost averaging
D)Trading in options
E)Buy low, sell high
Q3) Which of the following statements is not true?
A)Corporations are required by law to have two stockholder meetings each year.
B)Stockholders must approve any amendment of the corporate charter.
C)Stockholders must approve the sale of certain corporate assets.
D)Corporations are required by law to distribute annual reports.
E)Stockholders may vote in person or by proxy.
Q4) A large-cap stock is a stock issued by a company that has capitalization of $150 million or less.
A)True
B)False
Page 13
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Chapter 12: Investing in Bonds
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115 Flashcards
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Sample Questions
Q1) A sinking fund is a fund to which deposits are made each year for the purpose of redeeming a bond issue.
A)True B)False
Q2) A collateral trust bond is secured by a pledge of securities and is oft en issued by companies that do not own many fixed assets but do own other securities.
A)True B)False
Q3) A registered coupon bond is registered for interest, but not for the principal amount. A)True B)False
Q4) A registered bond is registered for principal and for interest. A)True B)False
Q5) Although unpopular a few years back, more and more corporations are issuing bearer bonds.
A)True B)False
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Chapter 13: Investing in Mutual Funds
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122 Flashcards
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Sample Questions
Q1) During 2000, Lianne Majoro received income dividends of $850 and capital gain distributions of $540.The tax consequence is that
A)both amounts must be included as taxable income.
B)only the dividends are taxable.
C)only the capital gains are taxable.
D)both amounts are tax exempt.
E)It is impossible to determine the tax consequences for dividend income and capital gain distributions unless the shares of the mutual fund are sold to another investor.
Q2) Which of the following factors would not affect the relationship between an individual's investment goals and the goals of a mutual fund?
A)the investor's age
B)the investor's family situation
C)the investor's income
D)the investor's future earning power
E)the investor's age, the investor's family situation, the investor's income, and the investor's future earning power would affect the relationship between an investor's investment goals and the goals of a mutual fund.
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Page 15
Chapter 14: Retirement Planning
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99 Flashcards
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Sample Questions
Q1) You can expect to spend about ________ years in retirement
A)5-10
B)11-15
C)16-20
D)21-25
E)26 or more
Q2) When you are nearing retirement, it is a good idea to:
A)increase the face value of your life insurance.
B)increase your property insurance coverage.
C)keep your life insurance intact.
D)decrease the face value of your life insurance.
E)swap your old life insurance policy with a new one.
Q3) Your net worth is equal to your assets minus liabilities.
A)True
B)False
Q4) Be certain you don't let your 45<sup>th</sup>birthday roll by without a comprehensive retirement plan.
A)True
B)False
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Chapter 15: Estate Planning
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Which one of the following statements is true about estate planning?
A)Many people don't give a single thought to preparing for death.
B)It is always easy to plan for your family's financial security in the event of your death.
C)Most people do a lot to provide for those who will survive them.
D)Most people give meticulous attention to estate planning.
E)Estate planning is for the rich only
Q2) Making any changes on the face of your will does not invalidate it.
A)True
B)False
Q3) A holographic will should be written, dated, and signed entirely in your handwriting.
A)True
B)False
Q4) What percentage of adults age 50 and older do not have a will?
A)None.You legally must have a will in Canada.
B)One percent.
C)Ten percent.
D)Forty percent.
E)Eighty percent.
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