Personal Finance
Mock Exam
Course Introduction
Personal Finance introduces students to fundamental concepts and practical strategies for managing individual and household financial resources. The course covers essential topics such as budgeting, saving, credit and debt management, investing, insurance, taxes, retirement planning, and financial goal setting. Through real-world examples and hands-on exercises, students learn how to make informed financial decisions, build wealth, identify financial risks, and develop sound financial habits. Emphasis is placed on understanding personal financial statements, banking services, responsible use of credit, and long-term financial planning to promote financial well-being throughout different life stages.
Recommended Textbook
Personal Finance 4th Canadian Edition by Jack Kapoor
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15 Chapters
1246 Verified Questions
1246 Flashcards
Source URL: https://quizplus.com/study-set/3273
Page 2
Chapter 1: Personal Financial Planning in Action
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74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/64981
Sample Questions
Q1) Household size is a major influence on personal financial planning decisions.
A)True
B)False
Answer: True
Q2) An individual invests $10,000 at a rate of 5% per annum.What will be its value in 10 years' time?
A) $15,000
B) $15,853
C) $16,289
D) $18,000
E) $19,000
Answer: C
Q3) Briefly explain three types of financial and economic risks that tend to affect everyone.
Answer: Interest rate risk: Changing interest rates affect your costs when you borrow and your benefit when you invest. Inflation Risk: Raising prices causes lost buying power
Liquidity Risk: Some investments may be more difficult to convert to cash or to sell without significant loss in value. Product Risk: Products may be flawed or services may not meet your expectations.Retailers may not honour their obligations.
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Page 3
Chapter 2: Money Management Skills
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) An example of a personal and employment document is a:
A) Social Insurance card.
B) passbook.
C) budget
D) property tax bill.
E) lease.
Answer: A
Q2) When one money management decision is selected,something else must be given up.
A)True
B)False
Answer: True
Q3) Improvements in a person's financial position are the result of:
A) increased liabilities.
B) reductions in earnings.
C) increased savings and investments.
D) increased purchases on credit.
E) lower amounts deposited in savings.
Answer: C
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Page 4
Chapter 3: Taxes in Your Financial Plan
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65 Verified Questions
65 Flashcards
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Sample Questions
Q1) An RRSP,RPP,and IPP are examples of
A)tax-exempt retirement plans.
B)tax-deferred retirement plans.
C)capital gains.
D)self-employment insurance programs.
E)job-related expenses that are tax deductible.
Answer: B
Q2) Earnings from a limited partnership would be an example of ____________ income.
A)earned
B)investment
C)portfolio
D)net business income
E)excluded
Answer: D
Q3) Tax-exempt income has a greater financial benefit than tax-deferred income.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Financial Services: Savings Plans and Payment Accounts
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60 Verified Questions
60 Flashcards
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Sample Questions
Q1) Savings compounded ____________ would have the highest effective yield
A)monthly
B)annually
C)semi-annually
D)daily
E)weekly
Q2) The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with A)safety.
B)personal service.
C)growth of savings.
D)liquidity.
E)a lower rate of return.
Q3) The money market fund offered by investment companies is a highly liquid financial service.
A)True
B)False
Q4) ATM fees are about the same in different geographic areas.
A)True B)False
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Chapter 5: Consumer Credit: Advantages, Disadvantages,
Sources, and Costs
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) How can you protect yourself against credit/debit card fraud?
Q2) Interest is a periodic charge for the use of credit,or other finance charges.
A)True
B)False
Q3) Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.
A)True
B)False
Q4) An installment loan is a
A) direct loan of money for personal purposes.
B) direct loan of money for home improvement.
C) loan that allows you to receive merchandise such as a refrigerator or furniture.
D) direct loan for vacation purposes.
E) synonym for a single lump-sum credit.
Q5) What are the two general rules of measuring credit capacity?
Q6) What are the two basic types of credit? Give examples of both.
Q7) There is always a transaction fee attached to make a cash advance.
A)True
B)False
Page 7
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Chapter 6: Consumer Purchasing Strategies and Wise
Buying of Motor Vehicles
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) The most expensive loans available are provided by finance companies,retailers,and banks through credit cards.
A)True
B)False
Q2) Banks often encourage you to make the maximum payment.
A)True
B)False
Q3) If you have trouble paying your bills,
A) take a personal finance course.
B) turn to a company that claims to offer assistance in solving debt problems.
C) check with your local Better Business Bureau for help.
D) seek assistance from a collection agency.
E) try to solve the problem with your creditor.
Q4) A variable interest rate is based on fluctuating rates in the banking system,such as the prime rate.
A)True
B)False
Q5) What are the various methods used to calculate the credit card balance on which interest is calculated?
Q6) What are two key concepts to keep in mind as you shop for credit? Page 8
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Page 9
Chapter 7: Selecting and Financing Housing
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70 Verified Questions
70 Flashcards
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Sample Questions
Q1) At the closing of home purchase,the "earnest" money has the purpose of:
A) paying real estate property taxes.
B) reducing the mortgage interest rate.
C) paying a mortgage application fee.
D) paying the real estate agent's commission.
E) serving as evidence of serious intent.
Q2) A common financial benefit of home ownership is
A) increased property value.
B) tax deductibility of the down payment.
C) amortization of the growth of equity.
D) a low security deposit.
E) low interest financing.
Q3) Which document is used to transfer ownership of property from one party to another?
A) Title
B) Escrow account
C) Settlement statement
D) Appraisal
E) Deed
Q4) What factors influence the type of housing a family will select?
Page 10
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Chapter 8: Home and Automobile Insurance
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65 Verified Questions
65 Flashcards
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Sample Questions
Q1) The ____________ coverage of a home insurance policy would cover accidental damage to another person's property by a member of your family.
A) voluntary property damages
B) personal property
C) medical payments
D) additional living expenses
E) personal liability
Q2) Identify the areas covered by tenants' insurance. I Personal property protection.
II Additional living expenses.
III Personal liability.
IV Replacement value of premises.
A) I,II and III only
B) I and III only
C) II,III and IV only
D) I,II,III and IV
E) I,II,and IV
Q3) Which type of automobile insurance is usually considered to be most important?
Q4) What factors affect the cost of home insurance?
Q5) What events are commonly covered in a homeowner's insurance policy?
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Chapter 9: Health and Disability Income Insurance
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) Very few employers provide disability income protection for their employees through the group insurance plans.
A)True
B)False
Q2) Basic health insurance coverage should include hospital costs,supplementary prescription drug charges,and dental maintenance.
A)True
B)False
Q3) Disability benefits begin on the first day you are disabled.
A)True
B)False
Q4) A plan that insures a large number of persons under the terms of a single policy without a medical examination is called a(n)____________ life insurance policy plan.
A) individual
B) whole
C) large number
D) permanent
E) group
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Page 12
Chapter 10: Financial Planning With Life Insurance
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93 Verified Questions
93 Flashcards
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Sample Questions
Q1) An example of ____________ risk occurs when an investment does not keep up with prices that are increasing in the overall economy.
A) market
B) interest
C) inflation
D) business failure
E) current
Q2) Which of the following investments has the best rate of return when adjusted for inflation?
A) savings accounts
B) corporate bonds
C) Canadian treasury bills
D) common stocks
E) preferred stocks
Q3) The dollar value of a fixed-return investment decreases when overall interest rates in the economy decreases.
A)True
B)False
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Chapter 11: Investing Basics and Evaluating Bonds
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) Oil-Slick Shipping stock was priced at $70 at the beginning of the year.Over the year the corporation paid a dividend of $3.25 and its stock price at year-end was $65.What is the trailing dividend yield?
A) 4.6 percent
B) 4 percent
C) 5 percent
D) 5.4 percent
E) 6 percent
Q2) Dividends are paid out of profits,and A) dividends are guaranteed.
B) dividend payments must be approved by the firm's board of directors.
C) dividends are paid before a firm's taxes are paid.
D) dividends are usually paid twice a year.
E) dividends are guaranteed and paid twice a year.
Q3) Describe the steps involved in a typical margin transaction.
Q4) An investment bank is a financial institution where large corporations can deposit excess cash for short periods of time.
A)True
B)False
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Chapter 12: Investing in Stocks
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) The bond debenture is a legal document that details all of the conditions relating to a bond issue.
A)True B)False
Q2) What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?
A) 20.0% B)
Q3) The current yield for a bond is determined by dividing dollar amount of annual interest by the current market value.
A)True B)False
Q4) The yield to maturity takes into account both interest income from the purchase date until the maturity date and the difference between the purchase price and the maturity value.
A)True B)False
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Chapter 13: Investing in Mutual Funds
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86 Verified Questions
86 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) Another name for a mutual fund that charges a contingent deferred sales load is a(n)____________ fund.
A) bare bones
B) end state
C) bare back
D) back-end
E) pay later
Q3) Typically,you must invest at least $1,000 to open a mutual fund account.
A)True
B)False
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Chapter 14: Starting Early: Retirement and Estate Planning
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) You can get a reverse mortgage annuity if:
A) you are at least 55 years old.
B) you are five years from retirement.
C) your mortgage is largely or completely paid off.
D) you are recently retired.
E) you need a loan.
Q2) Which one of the following expenditures for retirees is likely to decrease?
A) food and medical care
B) federal income taxes
C) expenses for leisure activities
D) medical expenses
E) insurance
Q3) Federal programs are the major source of public retirement pensions.
A)True
B)False
Q4) The housing needs of people do not change much as they grow older.
A)True
B)False
Q5) What are important steps in retirement planning?
Q6) What types of housing options are available to retirees?
Page 17
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Chapter 15: Daily Spending Diary
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72 Verified Questions
72 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) A handwritten will is called a(n):
A) formal will.
B) holographic will.
C) statutory will.
D) letter of last instruction.
E) informal will.
Q3) Making any changes on the face of your will can invalidate it.
A)True
B)False
Q4) At death,it is necessary to deregister any registered assets,such as RSPs or RIFs.
A)True
B)False
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