Personal Finance
Final Exam
Course Introduction
Personal Finance offers students the essential knowledge and practical skills needed to manage their individual financial lives in an increasingly complex economic environment. The course covers topics such as budgeting, saving, investing, credit and debt management, taxation, insurance, retirement planning, and financial decision-making. Through real-world examples and interactive activities, students will learn how to set financial goals, understand financial products, and make informed choices that contribute to financial well-being both now and in the future. This course is designed to empower students to achieve greater financial security and independence.
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) A financial goal that would be important in all stages of the life cycle is creating and maintaining an emergency fund.
A)True
B)False
Answer: True
Q2) Your [level of education | age] will usually have no effect on your earning capacity.
Answer: C
Q3) Financial assets are paper assets,such as savings accounts and securities.
A)True
B)False
Answer: True
Q4) [Tax | Liability and insurance] planning is introduced early in the life cycle. Answer: B
Q5) The financial crisis of 2008 and 2009 is best characterized as a [recession | depression].
Answer: A
Q6) Most families find it [easy | difficult] to discuss money matters. Answer: B
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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) Kathy purchased new furniture for $10,000.She put $1,000 down and financed $9,000.She will pay $350 per month until the loan is paid off.Which of the following is true of the value of furniture Kathy would record on her personal balance sheet?
A) The furniture should be recorded as an asset of $10,000 on Kathy's balance sheet.
B) The $9,000 is entered as a liability on Kathy's balance sheet.
C) The furniture should be recorded as a $1,000 expenditure on Kathy's balance sheet.
D) The $350 payments are expenditures on Kathy's income and expenditure statement.
E) All are correct except c
Answer: E
Q2) Inability to reach short-term goals will significantly affect your ability to reach long-term goals.
A)True
B)False
Answer: True
Q3) When your liabilities exceed your assets,you are [solvent | insolvent].
Answer: B
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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) Interest you paid on your [car | house] loan could be deducted.
Answer: B
Q2) The date by which your tax liability must be paid in order to avoid late payment penalties and/or interest is [April 15 | August 15].
Answer: A
Q3) Tax avoidance is legal,tax evasion is illegal.
A)True
B)False
Answer: True
Q4) If you earn less than $15,000,you likely pay more in [federal income tax | social security taxes].
Answer: B
Q5) The federal government gets the majority of its revenue from the _____ tax. A) sales
B) property C) excise D) income
E) estate
Answer: D
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Chapter 4: Managing Your Cash and Savings
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189 Verified Questions
189 Flashcards
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Sample Questions
Q1) Low interest rates that have persisted since the financial crisis of 2008-09 have been a net benefit to:
A) pension funds.
B) retirees.
C) banks.
D) savers.
E) share investors.
Q2) [Anyone | Only those with an account at the bank] could use a certified check.
Q3) Having some type of overdraft protection with your bank will end up costing [more | less] than having a check bounce.
Q4) You have $450 in your checking account when your ATM card and PIN are stolen.You could lose up to _____ if you report the lost ATM card within 2-8 business days.
A) $ 0
B) $ 25
C) $ 50
D) $450
E) $500
Q5) A [checking | savings] account is called a demand deposit account.
Q6) Low interest rates have [increased | not impacted] the supply of credit.
Page 6
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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) Early termination clauses on an auto lease typically apply to cars that are stolen or totaled in an accident as well as when you just want to return the vehicle before the end of the lease.
A)True
B)False
Q2) If you qualify,you might be able to buy a home with no down payment with [an FHA | a VA] loan.
Q3) The Veterans Administration guarantees mortgage loans given to qualified veterans. A)True
B)False
Q4) If a buyer withdraws from a transaction without a valid reason after signing a sales contract,he typically loses his earnest money.
A)True
B)False
Q5) Adjustable-rate mortgages with interest rate caps can lead to negative amortization.
A)True B)False
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Page 7
Chapter 6: Using Credit
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) Bank credit card purchases always begin accruing interest charges immediately.
A)True
B)False
Q2) One can be overusing credit even though he can afford to make minimum monthly payments on time.
A)True
B)False
Q3) When canceling a credit card,you should cut up the card and _____ that you are canceling your account.
A) inform the issuer in writing
B) call the issuer and tell them
C) inform the credit bureau in writing
D) call the credit bureau and tell them
E) all of the above
Q4) Which of the following is true regarding credit scoring systems?
A) Lower scores are better than higher scores.
B) Scoring systems are based on statistical studies.
C) Credit unions calculate and sell credit scores to lenders.
D) Females receive higher score than males.
E) All of the above
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Chapter 7: Using Consumer Loans
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) The majority of single-payment loans [are | are not] secured by collateral.
Q2) If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.
A)True
B)False
Q3) [Interim financing | Installment loan] is used in situations where the funds to be used for repayment are known to be forthcoming.
Q4) When comparing two installment loans with the same principal and APR,the loan with the shorter maturity will have the lower monthly payment and the lower total costs. A)True
B)False
Q5) The most popular use of consumer loans is to:
A) purchase a car.
B) finance a college education.
C) finance a vacation.
D) buy a house.
E) buy furniture.
Q6) There are now about [$1 billion | $1 trillion] in student loans outstanding.
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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) A [variable life insurance | whole life insurance] policy does not guarantee a minimum return.
Q2) Unbundling in universal life insurance means that the cost of the insurance and savings elements are identified separately for the policy owner to see.
A)True B)False
Q3) It [is | is not] possible to avoid most risks in your life.
Q4) From the standpoint of the person buying insurance,the central purpose of insurance should be:
A) to collect for all accidental losses.
B) to transfer risks of serious losses.
C) to make profit out of uncertain future events.
D) to accumulate savings.
E) to reduce payments for the most frequently occurring losses.
Q5) An activity that reduces the chance that a loss will occur is [risk shifting | loss prevention].
Q6) Life insurance cash value may be collected by terminating the policy. A)True B)False
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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) Traditional indemnity policies reimburse the insured based on the [amount charged | usual,customary,and reasonable charges] for the medical services received.
Q2) Medicare and Medicaid are hospital and physicians coverage,respectively.
A)True
B)False
Q3) After passage of the Affordable Health Care Act,many HMOs [require | do not require] members to pick one primary care physician.
Q4) Medicare is a government-sponsored health care plan composed of Part A and Part B.Part B covers:
A) hospital expenses.
B) doctor's bills.
C) custodial nursing home expenses.
D) prescription drugs.
E) all of the above
Q5) The major emphasis of dental insurance is to cover only extractions and x-rays. A)True
B)False
Q6) [Medicare | Medicaid] makes health care payments available for anyone over age 65.
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Chapter 10: Protecting Your Property
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189 Verified Questions
189 Flashcards
Source URL: https://quizplus.com/quiz/69812
Sample Questions
Q1) The personal liability umbrella policy typically includes coverage for liability losses that are in excess of the limits purchased in the comprehensive personal liability coverage provided in the homeowners' policy.
A)True
B)False
Q2) A house with a replacement value of $110,000 is currently insured for $90,000.The house has suffered a $15,000 loss from windstorm damage.The insurance company will pay the full $15,000 less the deductible.
A)True
B)False
Q3) If you have two insurance policies on the same property,the _____ clause explains how the two insurance companies will share the loss.
A) principle of indemnity.
B) co-insurance clause.
C) other-insurance clause.
D) companies' insurable interest.
E) principle of subrogation.
Q4) Section II of a homeowner's insurance policy covers [dwelling | personal liability].
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Chapter 11: Investment Planning
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168 Verified Questions
168 Flashcards
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Sample Questions
Q1) Stockbrokers prefer clients who [buy and hold | trade actively.]
Q2) The single most important reason for investing is for retirement. A)True
B)False
Q3) Which of the following is a true statement about the Dow Jones Industrial Average?
A) It is based on 30 industrial stocks.
B) It is based on 50 transportation stocks.
C) It is a composite index for the 500 largest industrial publicly traded companies.
D) It is based on 100 utilities stocks.
E) It contains 50 blue chip stocks.
Q4) The Securities and Exchange Commission was established as a result of the [Securities Act of 1933 | Securities Exchange Act of 1934].
Q5) An odd lot transaction is generally more expensive than a round lot transaction. A)True B)False
Q6) The bid price would be the price paid by an investor for an OTC stock. A)True B)False
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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) Only the strongest,most stable and safe-return companies can be called:
A) blue-chip stocks.
B) growth companies.
C) income stocks.
D) defensive stocks.
E) cyclical stocks.
Q2) Companies whose earnings have increased at an above-average level over the recent past are called:
A) cyclical companies.
B) growth companies.
C) income companies.
D) speculative companies.
E) defensive companies.
Q3) Dividends and earnings per share [refer | do not refer] to the same thing.
Q4) Purchasing power risk is of least concern during economic recession.
A)True
B)False
Q5) An investor is guaranteed to make a positive return on Treasury notes and bonds. A)True
B)False
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Chapter 13: Investing in Mutual Funds
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) [Both load and no-load | Only no-load] funds can charge a redemption fee.
Q2) Index funds have high realized capital gains. A)True B)False
Q3) Investment company earnings result solely from dividends. A)True B)False
Q4) Creviston Mutual Fund,a load fund,holds securities valued at $90,000,000 on August 30.The fund had liabilities of $2,000,000 and 4,800,000 shares outstanding.Calculate the net asset value per share on this day.
Q5) Advantages of exchange traded funds over mutual funds include [lower | higher] overhead expenses ratio.
Q6) A real estate investment trust that invests only in mortgages is called an equity trust. A)True B)False
Q7) Spiders and Diamonds are examples of ETFs. A)True B)False
15
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Chapter 14: Planning for Retirement
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208 Verified Questions
208 Flashcards
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Sample Questions
Q1) Judy,age 68,is receiving Social Security benefits.She received $45,000 in consulting income this year.Her Social Security benefits [will | will not] be reduced because of these earnings.
Q2) An example of a type of plan where the amount the employee receives at retirement is dependent on investment performance is a:
A) defined contribution plan.
B) defined benefit plan.
C) cash balance plan.
D) a and b
E) a,b,and c
Q3) With a [fixed rate | variable] annuity,you would receive a guaranteed payment regardless of the investment activity of the investment funds.
Q4) Asset income is the principal source of retirement income for any individual.
A)True
B)False
Q5) Annuities may provide survivor's benefits.
A)True
B)False
Q6) Most people invest their retirement funds too [aggressively | conservatively].
Page 16
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Chapter 15: Preserving Your Estate
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160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/69817
Sample Questions
Q1) When selecting a trustee,you should consider their:
A) investment and trust management skills.
B) business knowledge and judgment.
C) relationship of the person to the family.
D) a and b
E) b and c
Q2) A husband and wife together could give $20,000 to their niece with no gift tax liability even if the entire $20,000 came from the wife's checking account.
A)True
B)False
Q3) Requirements for a valid will do not include:
A) the testator must be of sound mind.
B) the testator must not be unduly influenced.
C) the will must be properly executed.
D) there must be no fraud in the execution of the will.
E) the will must be drawn up by an attorney.
Q4) Liquidity is important in an estate to pay for death costs and possible taxes.
A)True
B)False
Q5) If you die with no valid will in existence,you have died [intestate | testate].
Page 17
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