Personal and Family Financial Planning
Review Questions
Course Introduction
Personal and Family Financial Planning is designed to equip students with the foundational knowledge and practical tools necessary for effective financial decision-making across the lifespan. This course covers essential topics such as budgeting, saving, investing, credit management, insurance, retirement planning, and tax strategies. Special focus is given to understanding the financial needs and goals of individuals and families at different life stages, analyzing real-world scenarios, and developing comprehensive financial plans. Students will gain skills to assess financial situations, set achievable objectives, and implement strategies that promote long-term financial well-being and security for themselves and their families.
Recommended Textbook
Personal Finance 4th Edition by Jeff Madura
Available Study Resources on Quizplus
21 Chapters
1890 Verified Questions
1890 Flashcards
Source URL: https://quizplus.com/study-set/3274 Page 2
Chapter 1: Overview of a Financial Plan
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/65002
Sample Questions
Q1) Which of the following does not protect your assets and/or income?
A)Self insurance
B)Disability insurance
C)Automobile insurance
D)Life and health insurance
Answer: A
Q2) Your ability to access funds to cover any short-term cash deficiencies is your ________.
Answer: liquidity
Q3) The best measure of a person's or family's net wealth is
A)the highest level of education received.
B)the amount of annual income.
C)the value of what you own minus the value of what you owe.
D)their tax bracket.
Answer: C
Q4) Goals should be set as high as possible regardless of reality because they may be obtainable.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Planning With Personal Financial Statements
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/65001
Sample Questions
Q1) A budget will not do which of the following?
A)Help determine if cash outflows will be sufficient to cover cash inflows
B)Anticipate cash shortages
C)Determine the excess you have to invest
D)Determine the additional payments you can make to reduce personal debt
Answer: A
Q2) The net worth of an individual or family can be increased by
A)increasing spending.
B)increasing liabilities.
C)decreasing assets.
D)increasing income.
Answer: D
Q3) Jerry has assets of $200,000,a net worth of $150,000,and an annual income of $100,000.What are Jerry's liabilities?
(a)$100,000
(b)$250,000
(c)$50,000
(d)$450,000
Answer: (c)$200,000 - $150,000 = $50,000
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Applying Time Value Concepts
Available Study Resources on Quizplus for this Chatper
82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/65000
Sample Questions
Q1) The concept that a dollar received today has more value than a dollar received in the future because of the interest it can earn is called the ________.
Answer: time value of money
Q2) The time value of money can be used to estimate future savings with periodic drawing of funds.
A)True
B)False Answer: True
Q3) The Present Value Interest Factor (PVIF)becomes lower as the number of years increases.
A)True
B)False Answer: True
Q4) The process of obtaining ________ values is referred to as compounding.
A)present
B)future
C)current
D)inflated Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Using Tax Concepts for Planning
Available Study Resources on Quizplus for this Chatper
93 Verified Questions
93 Flashcards
Source URL: https://quizplus.com/quiz/64999
Sample Questions
Q1) The ________ is a fixed amount deducted from adjusted gross income to determine taxable income.
Q2) To qualify for "head of household" you must A)be single.
B)have at least one dependent in your household.
C)be a homeowner.
D)Both answers A and B are correct.
Q3) The filing status that yields the largest standard deduction per taxpayer is
A)married,filing jointly.
B)head of household.
C)single individual.
D)married,filing separately.
Q4) For qualified individuals,a contribution to a traditional IRA (Individual Retirement Account)is a(n)
A)credit.
B)adjustment to gross income.
C)itemized expense.
D)additional exemption amount.
Q5) ________ is withheld at a rate of 6.2% on the first $102,000 of your earnings.
Page 6
Q6) ________ and ________ are both reported on a Schedule B.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Banking and Interest Rates
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/64998
Sample Questions
Q1) A risk-free rate is a return on an investment that is guaranteed for a specified period.
A)True
B)False
Q2) A nondepository institution facilitating transactions in stocks or bonds is a(n)________.
Q3) A ________ is a check that is written on behalf of a person and will be charged against a nonfinancial institution's account.
A)cashier's check
B)money order
C)traveler's check
D)personal check
Q4) Financial institutions offering traditional checking and savings accounts as well as providing loans to both individuals and firms are called ________.
Q5) Finance companies are more selective in choosing the lender they serve,and therefore usually charge lower interest rates than banks or credit unions.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Managing Your Money
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/64997
Sample Questions
Q1) Which of the following is not a good,short-term money market investment?
A)NOW account
B)Savings account
C)AT&T common stock
D)Treasury bills
Q2) Which of the following is not true regarding a savings account?
A)It does not provide checking services
B)It is less liquid than a checking account
C)It pays lower interest than a checking account
D)It is less convenient than a checking account
Q3) For relatively safe investments such as savings accounts,CDs,MMDAs,and T-bills,liquidity is rarely a concern.
A)True
B)False
Q4) A money market account combines deposit accounts with a brokerage account,provides a single consolidated statement,and "sweeps" the unused balance from the checking account to a savings account daily.
A)True
B)False
Q5) Describe three types of risk associated with various money market instruments.
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Assessing and Securing Your Credit
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/64996
Sample Questions
Q1) Historical credit problems normally remain on a credit bureau's report for seven years and ten years for bankruptcy.
A)True
B)False
Q2) Creditors prefer a ________ level of cash inflows and ________ level of cash outflows.
A)low; low
B)high; low
C)high; high
D)medium; low
Q3) Credit issued by department stores for relatively long periods of time is called non-installment credit.
A)True
B)False
Q4) The Equal Credit Opportunity Act allows a creditor to deny credit based on a person's age.
A)True
B)False
Q5) Discuss at least two ways that you can protect yourself from identity theft.
Q6) You should review your credit report at least ________.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Managing Your Credit
Available Study Resources on Quizplus for this Chatper
85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/64995
Sample Questions
Q1) Financial institutions issuing MasterCards and Visas typically earn a high rate of interest on the credit extended.
A)True
B)False
Q2) Which of the following is not correct about cash advances?
A)There is no grace period for cash advances.
B)The interest rate for cash advances is higher than for purchases.
C)A cash advance is like a loan.
D)A transaction fee of 5 percent may be charged.
Q3) For good financial management,you should treat a credit card as
A)a source of funds.
B)a means of convenience.
C)a way to finance everything.
D)an inexpensive form of financing.
Q4) A credit card statement does not contain which of the following?
A)Previous balance
B)Current balance
C)Account number
D)Who purchased the item
Q5) Describe the advantages and disadvantages of credit cards.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Personal Loans
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/64994
Sample Questions
Q1) Financial institutions provide home equity loans up to a maximum of 70 percent of the value of the equity in a home.
A)True
B)False
Q2) The size of the monthly payment on a loan is dependent on all of the following except
A)principal borrowed.
B)interest rate.
C)your age.
D)maturity.
Q3) Which of the following methods of calculating interest is the most expensive?
A)Annual percentage rate or APR
B)Simple interest
C)Add-on interest
D)Sum of the digits
Q4) Collateral
A)gives the lender additional recourse if the payments are not made.
B)is used on unsecured loans.
C)increases the interest rate on loans.
D)is required on all loans.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Purchasing and Financing a Home
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/64993
Sample Questions
Q1) Describe how a mortgage and other related expenses affect a personal budget,income statement,and balance sheet.
Q2) Your home value is likely to be higher with all of the following except
A)being close to a school.
B)having a convenient location.
C)being in an area that has just been zoned for industrial use.
D)being in an area where a large retail business has just moved in.
Q3) Since most of the problems have already been fixed,older homes usually have lower maintenance expense than newer homes.
A)True
B)False
Q4) Which of the following would you not factor into a decision to buy or rent a house?
A)The return you can receive on investing your money
B)Current mortgage rates on 30-year fixed rate mortgages
C)The value you place on your pride of ownership
D)All of the above should be considered in the decision
Q5) List four key components of closing costs.
Q6) Is purchasing a home an expense,an investment,or both?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Auto and Homeowners Insurance
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/64992
Sample Questions
Q1) Which of the following is not covered by renter's insurance?
A)Medical expenses for injuries to visitors
B)Replacement of personal items such as clothing
C)Fire damage to the building's roof
D)Cost of legal action due to personal liability claims
Q2) Which of the following is considered personal property for home insurance coverage?
A)An automobile
B)A garage
C)Furniture
D)Trees and shrubs
Q3) Additional coverage on your automobile insurance policy can be purchased for
A)the cost of a rental car while your car is being repaired.
B)the protection of valuables you are carrying in your car.
C)the cost of towing,even if the problems are not the result of an accident.
D)Both A and C are correct answers.
Q4) Most states have financial responsibility laws that require individuals who drive cars to purchase a minimum amount of liability insurance.
A)True
B)False
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Health and Disability Insurance
Available Study Resources on Quizplus for this Chatper
76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/64991
Sample Questions
Q1) Which of the following is not true regarding government regulations to allow individuals who change jobs to maintain health insurance coverage?
A)You may continue your health insurance provided through an employer's plan for 18 months after you stop working for that employer.
B)Even if you retire,you may continue coverage for 18 months unless you qualify for Medicare.
C)If you change jobs,a new insurance company cannot deny you coverage based on your health,medical condition,previous claims,or disability.
D)When changing jobs,you are allowed to stop and start health care plans whenever you need to and still be guaranteed insurance coverage by a new provider.
Q2) Generally,disability income policies with shorter waiting periods have lower premiums.
A)True
B)False
Q3) The managed health care plan with the lowest premiums and also the least choice of health care providers is the ________.
Q4) What steps would you take to evaluate and choose health care insurance options?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Life Insurance
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/64990
Sample Questions
Q1) Describe the two methods used to determine the life insurance amount.
Q2) Life insurance may be obtained through all of the following except A)financial institutions.
B)private insurance companies.
C)the federal government.
D)your employer.
Q3) A disadvantage of whole life policies is that
A)the premiums are not predictable.
B)they are much more expensive than term policies.
C)the face value of the policy can change over time.
D)the cash value is frozen and not available to policyholders.
Q4) During the time the policy is in effect,term life insurance has a good savings and investment component.
A)True
B)False
Q5) In using the Internet to price insurance,which of the following is not true?
A)It is fast and convenient.
B)It is usually more expensive.
C)There is less pressure.
D)You can compare rates among several companies at once.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Investing Fundamentals
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/64989
Sample Questions
Q1) The primary market is used by firms to raise funds and is a market where newly issued securities are traded.
A)True
B)False
Q2) An initial public offering (IPO)is characterized by all of the following except
A)the first time offering of stock by a corporation.
B)can be sold later for a profit in the secondary market.
C)can result in losing the investment.
D)is available to individual investors before institutional investors.
Q3) ________ investors are professionals employed by a financial institution and are responsible for managing money.
A)Institutional
B)Professional
C)Managing
D)Security
Q4) If you wish to have the power to vote on who will serve on the board of directors of a corporation you will need to purchase shares of ________ in the corporation.
Q5) Individuals who buy and sell stock on a very short-term basis as a career are called
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Investing in Stocks
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/64988
Sample Questions
Q1) A company's annual report usually includes all of the following but A)an auditor's report.
B)testimonials from employees.
C)a letter from the CEO.
D)management discussion and analysis.
Q2) When corporate taxes rates are ________,the after-tax earnings of corporations are ________,which means ________ money for shareholders.
A)increased; decreased; more B)decreased; increased; more C)increased; increased; more D)decreased; decreased; less
Q3) In reading a corporate income statement,cost of goods sold is subtracted from A)revenue.
B)operating expenses.
C)earnings before interest and taxes.
D)taxes.
Q4) If you purchase stock ________ you are doing so with a portion of the funds borrowed from your broker.
Q5) Compare and contrast a full-service brokerage firm to a discount brokerage firm.
Page 17
Q6) The largest stock exchange in the United States is the ________.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Investing in Bonds
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/64987
Sample Questions
Q1) If a bond's price were lower than the principal amount,its yield to maturity would be ________ than the coupon rate.
A)less
B)more
C)equal to
D)no relation to
Q2) Which of the following is not a characteristic of corporate bonds?
A)Have different ratings
B)Are long-term equity securities
C)Subject to default risk
D)Not backed by the federal government
Q3) ________ bonds are the least risky of all bonds and,therefore,pay a lower rate of interest.
A)Treasury
B)Municipal
C)Federal agency
D)Corporate
Q4) The possibility that a bond will be called by the corporation prior to its maturity is an example of a(n)________ risk.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/64986
Sample Questions
Q1) Hedge funds,which are not regulated by the Securities and Exchange Commission,are only available to wealthy investors and are less risky than ordinary mutual funds.
A)True
B)False
Q2) Index stock funds always contain every company's stock that make up the particular index.
A)True
B)False
Q3) Two advantages of investing in mutual funds are diversification and professional management.
A)True
B)False
Q4) A mutual fund must distribute ________ to investors in the same year as earned.
A)dividends
B)profits
C)capital gains
D)Both A and C.
Q5) A mutual fund that invests only in healthcare-related companies is an example of a(n)________ fund.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Asset Allocation
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/64985
Sample Questions
Q1) Asset allocation is the process of allocating money across financial assets,such as stocks,bonds,and mutual funds,with the objective of eliminating risk altogether.
A)True
B)False
Q2) Selling options on stock you already own
A)is illegal under federal law.
B)cannot benefit you financially.
C)is called a covered call strategy.
D)is not a very good idea.
Q3) Over time,you should change the composition of your investment portfolio in response to change in your A)market expectations.
B)investment goals.
C)life circumstances.
D)All of the above.
Q4) A portfolio can be less risky when its investments move in perfect tandem. A)True
B)False
Q5) List two considerations that affect your asset allocation decision.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Retirement Planning
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/64984
Sample Questions
Q1) A financial contract that will provide annual payments over either a specified time period or a person's lifetime is a(n)________.
Q2) IRA contribution limits and eligibility requirements are increasing over the next few years to encourage more retirement savings by individuals.
A)True
B)False
Q3) All of the following is good advice on retirement planning and savings except A)start early.
B)take advantage of employer plans.
C)take advantage of tax savings.
D)if you are eligible for Social Security,you will not need to worry about additional savings.
Q4) Which of the following is not a characteristic of employer-sponsored retirement plans?
A)Help you save
B)Generally of two types
C)Part of a good benefits package
D)A good place from which to borrow
Q5) Name two types of retirement plans available to the self-employed.
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Estate Planning
Available Study Resources on Quizplus for this Chatper
78 Verified Questions
78 Flashcards
Source URL: https://quizplus.com/quiz/64983
Sample Questions
Q1) A(n)________ trust is one that cannot be changed.
A)revocable
B)living
C)irrevocable
D)standard family
Q2) Estate taxes may be levied by
A)the federal government only.
B)state governments only.
C)both federal and state governments.
D)foreign governments only.
Q3) A(n)________ is a document that specifies changes in an existing will.
A)letter of instruction
B)codicil
C)amendment
D)secondary will
Q4) Even a parent without significant net worth needs a will to appoint a guardian for children.
A)True
B)False
Q5) Name three types of trusts.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Integrating the Components of a Financial Plan
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/64982
Sample Questions
Q1) Which of the following does not increases your net worth?
A)An increase in your retirement balance
B)An increase in your home value
C)An increase in your mutual funds
D)The purchase of a new car
Q2) Financial documents should be
A)kept in a desk drawer in your home for easy access.
B)kept in a safety deposit box.
C)kept at your parent's house in their desk.
D)None of the above.
Q3) The more you spend,the less money you will have available for liquidity purposes or to make investments or to save for retirement.
A)True
B)False
Q4) Even average people can accumulate wealth by
A)spending less than they make.
B)spending more than they make.
C)eating out less often.
D)winning the lottery.
Q5) ________ is a means of protecting your assets and income.
Page 23
To view all questions and flashcards with answers, click on the resource link above.