Personal and Family Finance
Question Bank
Course Introduction
Personal and Family Finance explores the fundamentals of managing financial resources for individuals and households through various life stages. The course covers essential topics such as budgeting, saving, investing, credit management, insurance, retirement planning, and tax considerations. Emphasis is placed on developing practical skills for setting financial goals, making informed decisions, and understanding the impact of economic factors on personal and family financial stability. Students will engage with real-world scenarios and tools to build effective strategies for achieving long-term financial wellbeing and security.
Recommended Textbook
Personal Finance 10th Edition by Jack R. Kapoor
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19 Chapters
2307 Verified Questions
2307 Flashcards
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Page 2
Chapter 1: Personal Finance Basics and the Time Value of Money
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) What are the six steps in the financial planning process?
Answer: Answers will vary
Q2) The study of how wealth is created and distributed is:
A)financial planning.
B)opportunity cost.
C)inflation.
D)economics.
E)a market economy.
Answer: D
Q3) When prices are rising at a rate of 3 percent,the cost of products and services would double in ______ years.
A)3
B)6
C)12
D)24
E)36
Answer: D
Q4) Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.
Answer: Answers will vary
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Chapter 2: Financial Aspects of Career Planning
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Sample Questions
Q1) A (n)____________ is an employment position that is obtained mainly to earn money.
A)career
B)job
C)internship
D)apprenticeship
E)cooperative
Answer: B
Q2) The purpose of a selection interview is to:
A)select the best applicants for further interviewing.
B)obtain training information on a career area.
C)question candidates for a job in detail.
D)explore possible job opportunities in a career area.
E)locate potential candidates for a position.
Answer: C
Q3) The purpose of an informational interview is to obtain employment from a branch office of a major corporation.
A)True
B)False Answer: False
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Chapter 3: Money Management Strategy: Financial Statements and Budgeting
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93 Verified Questions
93 Flashcards
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Sample Questions
Q1) If a family planned to spend $370 for food during March but only spent $348,this difference would be referred to as a:
A)variance.
B)deficit.
C)fixed living expense.
D)budget reduction.
E)contribution to net worth.
Answer: A
Q2) Which of the following financial documents would most likely be stored in a safedeposit box?
A)W-2 forms
B)personal financial statements
C)warranties
D)savings certificates
E)checking account statements
Answer: D
Q3) Take-home pay is a person's earnings after deductions for taxes and other items.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Planning Your Tax Strategy
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Sample Questions
Q1) Which one of the following is not included in gross income?
A)Tax credit.
B)Exemption.
C)Exclusion.
D)Earned income.
E)Portfolio incomE.
Q2) An exemption affects a person's tax situation by:
A)increasing the standard deduction.
B)increasing the taxpayer's marginal tax rate.
C)decreasing itemized deductions.
D)reducing the taxpayer's taxable income.
E)decreasing tax credits.
Q3) A tax ____________ is an amount subtracted directly from the amount of taxes owed.
A)credit
B)exemption
C)deduction
D)exclusion
E)shelter
Q4) How is taxable income computed?
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Chapter 5: Financial Services: Savings Plans and Payment Accounts
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Sample Questions
Q1) Which of the following is not a deposit institution?
A)life insurance company
B)commercial bank
C)savings and loan association
D)credit union
E)mutual savings bank
Q2) A endorsement is especially useful when you are depositing checks.
A)blank
B)restrictive
C)common
D)special
E)documented
Q3) Based on the following information,what amount would be subtracted from the bank balance side of the checking account reconciliation? Service charge $12;Outstanding checks $145;Interest $3.50;Deposit in transit $80
A)$145.00
B)$12.00
C)$157.00
D)$148.50
E)$80.00
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Chapter 6: Introduction to Consumer Credit
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170 Flashcards
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Sample Questions
Q1) Department stores and gasoline companies are good places to obtain your first credit card.
A)True
B)False
Q2) Jim Roy visits the doctor for his annual check-up which costs $85.He is billed for this at the end of the month.What type of credit did Jim use?
A)installment sales credit
B)installment cash credit
C)single lump sum credit
D)revolving credit
E)incidental credit
Q3) In the 5 Cs of credit,capital refers to your assets or net worth.
A)True
B)False
Q4) Most of the information in your credit file may be reported for only seven years.If you have declared personal bankruptcy,that fact may be reported for 10 years.
A)True
B)False
Q5) How can you protect yourself against debit/credit card fraud?
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Chapter 7: Choosing a Source of Credit: The Costs of Credit Alternatives
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129 Flashcards
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Sample Questions
Q1) Payday,cash advance,check advance,and post- dated checks are _________ loans.
A)inexpensive
B)medium-priced
C)expensive
D)low APR
E)variable APR
Q2) A person filing for relief under the bankruptcy code is called a bankrupt,not a debtor.
A)True
B)False
Q3) Which method of payment is likely to be the least expensive in the long run?
A)bank credit card
B)check written on a home equity line of credit
C)cash
D)store credit card
E)cash advance on a Visa credit card
Q4) In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?
Page 9
Q5) What are two key concepts to keep in mind as you shop for credit?
Q6) Explain simple interest.
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Page 10
Chapter 8: Consumer Purchasing Strategies and Legal Protection
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Sample Questions
Q1) Damian Walker just purchased a new vehicle.He is reading his owner's manual to know when he needs to take it in for its regular servicing at the dealer.He wants to make sure this car lasts a while.What step in the purchasing process is Damian carrying out?
A)problem identification
B)information gathering
C)evaluating alternatives
D)determining the purchase price
E)post purchase activities
Q2) A motor vehicle has annual depreciation of $2,000;oil changes cost $120,automobile insurance $500 annually,and license plates costs $100.What is the annual amount of the total fixed operating cost for this vehicle?
A)$2,000
B)$2,120
C)$2,500
D)$2,600
E)$2,720
Q3) Explain the difference between arbitration and mediation.
Q4) What legal actions are available when assistance is needed to resolve a consumer problem?
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Chapter 9: The Housing Decision: Factors and Finances
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Sample Questions
Q1) Jennifer Garland is purchasing a home that was assembled in a factory and then moved to the living site.What type of housing is Jennifer purchasing?
A)condominium
B)duplex
C)cooperative
D)prefabricated home
E)penthouse
Q2) Which of the following would increase the amount that a person could afford to spend on a home?
A)increase in family income
B)increase in interest rates
C)decrease in down payment
D)increase in other financial obligations
E)increase in monthly living expenses
Q3) What factors influence the type of housing a family will select?
Q4) John Ashford needs to sell his home because of a job transfer to another city.What actions should John take to sell his home?
Q5) Explain how current interest rates can affect the price of a home.
Q6) What is the purpose of an escrow account and what costs are typically included?
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Chapter 10: Property and Motor Vehicle Insurance
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104 Flashcards
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Sample Questions
Q1) The uncertainties of direct and indirect losses to personal or real property due to fire,wind,accident,theft,etc. ,are called ____________ risks.
A)personal
B)business
C)property
D)liability
E)speculative
Q2) Which of the following would not be considered personal property under a typical homeowner's insurance policy?
A)furniture
B)clothing
C)buildings and other structures
D)jewelry
E)a silverware set
Q3) Explain the difference between strict and vicarious liability.Provide examples.
Q4) The purpose of an assigned risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.
A)True
B)False
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Chapter 11: Health, Disability, and Long-Term Care Insurance
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Basic health insurance coverage includes hospital expense insurance,surgical expense insurance,and physician expense insurance.
A)True B)False
Q2) What should you do when an HMO denies treatment or coverage?
A)Ask for a letter detailing the clinical reasons for the denial.
B)Refer to the plan document or contact your HMO's member services department to gather information on the appeals process.
C)Make copies of any correspondence,including payments,and any reimbursements.
D)Enlist the help of your doctor,employer,and state insurance department to lobby your case before the HMO.
E)You should do everything included in the other answers.
Q3) What are the five basic types of health insurance? What are their benefits and limitations?
Q4) Medicare covers routine checkups,dental care,most immunizations,cosmetic surgery,routine foot care,eyeglasses,and hearing aids.
A)True B)False
Page 14
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Chapter 12: Life Insurance
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162 Flashcards
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Sample Questions
Q1) After you buy new life insurance you have a "free look" period of ______ days.
A)10
B)20
C)30
D)40
E)50
Q2) Your annual income is $100,000.You have a spouse,two kids,a dog and a mortgagea typical family.What is your life insurance need based on the easy method?
A)$310,000
B)$490,000
C)$700,000
D)$1,000,000
E)$1,200,000
Q3) Stock life insurance companies are owned by their policyholders.
A)True
B)False
Q4) What is an annuity? What is the difference between life insurance and an annuity? Include payment options and tax considerations.
Q5) What is life insurance? What is its purpose and principle?
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Chapter 13: Investing Fundamentals
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Sample Questions
Q1) The rate of return on an investment has no affect on a long-term investment program.
A)True
B)False
Q2) A corporation must give each potential investor an annual report.
A)True
B)False
Q3) Which of the following is a true statement?
A)The first order of business for an investor is acquiring the money needed to begin investing.
B)To be useful,investment objectives must be very general.
C)Investment goals are the same for each individual.
D)Because investment objectives deal with the future,it is useless to plan more than five years in the future.
E)A long-term investment objective involves a time period of five years or less.
Q4) Today,federal,state,and local governments and most corporations have a home page where you can obtain valuable information.
A)True
B)False
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Chapter 14: Investing in Stocks
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133 Flashcards
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Sample Questions
Q1) ABC Corporation holds its annual meeting in April.Maxine Star,who owns stock in the company,cannot attend the meeting.She can vote by:
A)voluntary certificate.
B)preemptive right.
C)proxy.
D)cumulative certificate.
E)participatory certificatE.
Q2) Kay Powers wants to diversify her portfolio by investing in a firm that has the potential to earn above average profits compared to other firms in the economy.What type of stock is Kay thinking about adding to her portfolio?
A)defensive stock
B)cyclical stock
C)small cap stock
D)blue chip stock
E)growth stock
Q3) A large cap stock is a stock issued by a company that has capitalization of $10 billion or more.
A)True
B)False
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Page 17
Chapter 15: Investing in Bonds
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Sample Questions
Q1) Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?
A)serial
B)default
C)sinking fund
D)low-coupon
E)convertible
Q2) June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 4.5 percent interest and she is in the 25 percent tax bracket,what is the taxable-equivalent yield?
A)4.50 percent
B)5.50 percent
C)6.00 percent
D)7.72 percent
E)6.93 percent
Q3) A subordinated debenture is a more secure investment than a mortgage bond.
A)True
B)False
Q4) How do interest rates in the economy affect the price of a corporate bond?
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Chapter 16: Investing in Mutual Funds
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Sample Questions
Q1) Noelle Simon is buying shares in a mutual fund that only invests in companies located in Latin America.What type of mutual fund is this?
A)aggressive growth fund
B)equity income fund
C)global fund
D)international fund
E)regional fund
Q2) A mutual fund:
A)is a way of investing in a single stock.
B)pools the money of many investors-its shareholders-to invest in a variety of securities.
C)is insured by the FDIC.
D)is a form of an indirect real estate investment.
E)is professionally managed so investors need not monitor fund results.
Q3) A mutual fund that provides tax-exempt interest income is referred to as a longterm U.S.bond fund.
A)True
B)False
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Chapter 17: Investing in Real Estate and Other Investment
Alternatives
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Sample Questions
Q1) An example of an indirect real estate investment is a(n):
A)single family dwelling.
B)duplex.
C)apartment.
D)lanD.
E)participation certificatE.
Q2) Lynn Roy owns three,two-carat diamonds that she received from her grandmother who did not believe in banks or stocks and bonds.What type of investment does she hold?
A)direct investment in real estate
B)indirect investment in real estate
C)precious metals
D)collectibles
E)gems
Q3) A REIT is a firm that pools investor funds and invests them in real estate or uses them to make construction or mortgage loans.
A)True
B)False
Q4) Explain the difference between direct and indirect investments in real estate.Give examples of each.
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Chapter 18: Starting Early: Retirement Planning
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Sample Questions
Q1) During retirement,you should increase your premium payments by increasing the face value of your life insurance.
A)True
B)False
Q2) Which one of the following is not a typical characteristic of a defined contribution plan?
A)employer matching contributions
B)ability to transfer account balance to an IRA
C)guaranteed formula-based benefit
D)employee-managed investments
E)lump-sum withdrawal option
Q3) Social Security should be the only source of your retirement income.
A)True
B)False
Q4) Earned interest on annuities accumulates tax-free until the annuity payments begin. A)True
B)False
Q5) What types of housing options are available to retirees?
Q6) What are the possible sources of income for retirees?
Page 21
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Chapter 19: Estate Planning
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Sample Questions
Q1) Most states do not recognize living wills.
A)True
B)False
Q2) Under the traditional marital share will,half of your estate is taxed at your death and half at your spouse's death.
A)True
B)False
Q3) A testamentary trust is a trust established by your will that becomes effective upon your death.
A)True
B)False
Q4) What are the federal and state tax considerations in estate planning?
Q5) Brenda Johnson has used a preprinted form that she got from the internet to create her will.What type of will has she created?
A)holographic
B)formal
C)statutory
D)casual
E)living
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