Personal Finance
Test Bank
Course Introduction
Personal Finance introduces students to the fundamental concepts and practical skills necessary for managing individual and family finances. Topics include budgeting, saving, credit and debt management, investing, insurance, taxes, retirement planning, and financial decision-making. The course emphasizes real-world application and informed financial choices, empowering students to set financial goals, understand risk and reward, and build a strong foundation for lifelong financial well-being.
Recommended Textbook
Personal Finance 13th Edition by E. Thomas Garman
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17 Chapters
3061 Verified Questions
3061 Flashcards
Source URL: https://quizplus.com/study-set/1328 Page 2
Chapter 1: Understanding Personal Finance
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/26518
Sample Questions
Q1) 401(k),403(b) and 457 plans are example of tax-sheltered retirement plans offered by employers.
A)True
B)False
Answer: True
Q2) If the consumer price index was 100 in 1984 and 244 in 2015,how much did prices increase during this period?
A)36 percent
B)72 percent
C)144 percent
D)244 percent
Answer: C
Q3) A worker covered by a health care plan might have to pay the first $1000 of any health expenses during a year.This requirement is called the A)coinsurance
B)use-it-or-lose-it rule.
C)variance.
D)deductible.
Answer: D
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Page 3
Chapter 2: Career Planning
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76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/26519
Sample Questions
Q1) Prior to a job interview,you should learn how the company makes money,its operations and history,profitability,expansion plans,and other recent developments.You should also research the company's competitors,and the industry.
A)True
B)False Answer: True
Q2) Whenever you request that someone write a reference letter you should provide the person with your résumé.
A)True
B)False Answer: True
Q3) A career goal can be a specific job or field of work.
A)True
B)False Answer: True
Q4) The final step in career planning is career fields identification. A)True
B)False Answer: False
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Chapter 3: Financial Statements,tools,and Budgets
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150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/26520
Sample Questions
Q1) The debt-to-income ratio provides a view of total debt burden of an individual or family by comparing the dollars spent on gross annual debt repayments with gross annual income.
A)True
B)False Answer: True
Q2) Which of the following types of assets is primarily used for emergencies,maintenance of living expenses,savings,and payment of bills?
A)Monetary
B)Tangible
C)Investment
D)Capital
Answer: A
Q3) Original deeds and mortgage papers should be stored in one's home file.
A)True
B)False
Answer: False
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Chapter 4: Managing Income Taxes
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201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/26521
Sample Questions
Q1) Homeowners with appreciated principal residences can avoid tax on gains of up to $500,000 if married and filing jointly and up to $250,000 if single.The home must have been owned and used as the taxpayer's private residence for two out of the last three years prior to the date of sale.
A)True
B)False
Q2) A short-term capital gain (or loss) occurs when the asset is held for one year or less.
A)True
B)False
Q3) Tax which applies to income of a minor child earned off the assets is known as the A)kiddie tax.
B)value-added tax.
C)consumption tax.
D)regressive tax.
Q4) The highest marginal tax rate is currently 50 percent. A)True B)False
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Chapter 5: Managing Checking and Savings Accounts
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181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/26522
Sample Questions
Q1) The more frequent the compounding,the greater the effective return for the saver.
A)True
B)False
Q2) In community property states,most of the money and property acquired during a marriage are legally considered the property of
A)both spouses.
B)the husband.
C)the wife.
D)the individual who bought it.
Q3) The regulator of commercial banks and saving banks is the
A)Federal Deposit Insurance Corporation.
B)Securities and Exchange Commission.
C)Home Loan Bank Board.
D)Comptroller of the Currency.
Q4) A share draft account is the credit union version of a NOW account.
A)True
B)False
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Chapter 6: Building and Maintaining Good Credit
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/26523
Sample Questions
Q1) Convenience use of a credit card is justified only if the card balance is paid in full by the end of the year.
A)True
B)False
Q2) The most well-known of the many different types of credit scores used by lenders today is the
A)FICO score.
B)Vantage score.
C)Experian score.
D)TransUnion score.
Q3) Bankruptcy remains on one's credit record for seven years.
A)True
B)False
Q4) Although your credit file at each of the three major credit bureaus may differ,your credit scores will be the same.
A)True
B)False
Q5) People can use credit to take advantage of "free" credit. A)True
B)False
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Chapter 7: Credit Cards and Consumer Loans
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166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/26524
Sample Questions
Q1) Virginia has just been quoted what appears to be a very competitive loan for $2,000 to be paid back in 24 monthly payments of $96.66 with a finance charge of $240.Using the n-ratio method of estimating the APR,what is the APR on this loan?
\( \mathrm{APR}=\frac{\mathrm{Y}(95 \mathrm{P}+9) \mathrm{F}}{12 \mathrm{P}(\mathrm{P}+1)(4 \mathrm{D}+\mathrm{F})} \)
A)8.0 percent
B)11.1 percent
C)19.2 percent
D)24.0 percent
Q2) Service credit is granted to consumers by public utilities,physicians,dentists,and other service providers that do not require full payment when services are rendered.
A)True
B)False
Q3) With a conditional sales contract,the title passes to the buyer when the document is signed.
A)True
B)False
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Page 9
Chapter 8: Vehicles and Other Major Purchases
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145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/26525
Sample Questions
Q1) Consumer Reports comprehensive review of makes and models of vehicles occurs annually in its ____________ edition.
A)January
B)April
C)September
D)December
Q2) The Federal Trade Commission's "cooling off" rule allows you to
A)cancel a contract to purchase an item costing over $25 that is signed away from the dealer's normal place of business within three days.
B)cancel a contract to purchase an item costing over $25 within three days.
C)cancel a contract to purchase any item that is signed away from the dealer's normal place of business within three days.
D)cancel any purchase within 10 days.
Q3) Which of the following will not help you become a better on-line shopper?
A)Only do business with sellers for which you have complete contact information.
B)Use only one particular credit card for on-line purchases.
C)Use a debit card for on-line purchasing.
D)Do not use your regular e-mail address.
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Chapter 9: Obtaining Affordable Housing
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217 Verified Questions
217 Flashcards
Source URL: https://quizplus.com/quiz/26526
Sample Questions
Q1) Most of the monthly payment during the early years of a mortgage loan goes for principal repayment.
A)True
B)False
Q2) ____ rarely appreciate(s) in value.
A)Mobile homes
B)Condominiums
C)Cooperatives
D)Manufactured housing
Q3) Using a back-end ratio of 37 percent,a person with a $360 auto loan would need a monthly gross income of approximately ____ to buy a home with total monthly payments of $1,420.
A)$3,838
B)$4,811
C)$7,903
D)$2,393
Q4) Homeowners may find it advantageous to refinance a mortgage when interest rates rise.
A)True
B)False
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Chapter 10: Managing Property and Liability Risk
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209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/26527
Sample Questions
Q1) Risk retention is not appropriate when
A)the worst possible loss is small.
B)the losses are highly predicable in both frequency and severity.
C)the retention is due to inaction.
D)(all of these)
Q2) To meet the replacement-cost requirement,a homeowner must insure his or her home for at least 80 percent of its replacement value.
A)True
B)False
Q3) Assume you own a refrigerator that was purchased new seven years ago for $900,would cost $1200 today,and that it was expected to last ten years when purchased.Similar used refrigerators sell for about $300.What is its actual cash value?
A)$270
B)$300
C)$360
D)$900
Q4) The fee charged for insurance protection is called a premium.
A)True
B)False
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Chapter 11: Managing Health Expenses
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/26528
Sample Questions
Q1) Drawbacks of an HMO include
A)limited choice of physicians
B)no coverage for preventive treatments
C)limited availability through group plans.
D)higher deductibles and copayments compared to other plans
Q2) Traditional health insurance provides protection against financial loss resulting from the perils of illness and injury.
A)True
B)False
Q3) A legal document that directs life support measures,such as a respirator,to be removed is called a
A)letter of last instructions.
B)health care power of attorney.
C)durable power of attorney.
D)living will.
Q4) For benefits to begin under a long-term care insurance plan the patient must A)be in a nursing home.
B)be unable to perform a certain number of activities of daily living.
C)have been in a hospital immediately prior to needing assistance.
D)be covered under Social Security.
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Chapter 12: Life Insurance Planning
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215 Verified Questions
215 Flashcards
Source URL: https://quizplus.com/quiz/26529
Sample Questions
Q1) A life insurance policy with a lower interest-adjusted cost index (IACI) is generally a better buy than a comparable policy with a higher IACI.
A)True
B)False
Q2) Sales commissions represent as much as 90 percent of the first-year premium paid for a cash-value life insurance policy.
A)True
B)False
Q3) Modified life insurance is primarily designed for people whose life insurance needs are high but who cannot yet afford the high cost of cash-value life insurance.
A)True
B)False
Q4) You should ignore net cost calculations provided by a life insurance agent when evaluating the cost of a life insurance policy.
A)True B)False
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Page 14
Chapter 13: Investment Fundamentals
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172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/26530
Sample Questions
Q1) Capital gains (losses) are not realized until one actually sells the investment.
A)True
B)False
Q2) Research indicates that an investor can cut random risk in half by diversifying in as few as five stocks and bonds.
A)True
B)False
Q3) A long-term investor generally has a high-risk investment philosophy.
A)True
B)False
Q4) Dollar-cost averaging requires that you continue to invest if the longer-term prospects suggest an eventual increase in price
A)True
B)False
Q5) Typically the highest commissions are charged on investments in A)stocks.
B)bonds.
C)collectibles.
D)real estate.
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Chapter 14: Investing in Stocks and Bonds
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352 Verified Questions
352 Flashcards
Source URL: https://quizplus.com/quiz/26531
Sample Questions
Q1) Jackson purchased Logo,Inc.,stock for $30 a share and sold it for $36 a share three years later.Over those three years he received an average annual dividend of $1.The approximate compound yield on this investment was ____ percent.
A)4.0
B)8.6
C)9.1
D)12.0
Q2) The ____ of a bond is variable.
A)stated coupon rate of interest
B)face value
C)maturity date
D)market price
Q3) U.S.Government TIPS bonds guarantee that the investor's return will outpace inflation.
A)True
B)False
Q4) Utility company stocks are generally classified as income stocks.
A)True
B)False
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Chapter 15: Mutual Funds and Exchange Traded Funds
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176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/26532
Sample Questions
Q1) Shares in an open-end mutual fund can be liquidated almost immediately simply by communicating with the company via phone,on-line or in writing.
A)True
B)False
Q2) Advantages of mutual funds include
A)diversification.
B)professional management.
C)liquidity.
D)(All of these)
Q3) SEC regulations require all of the following except
A)that a prospectus be provided to mutual fund shareholders.
B)that 12b-1 fees be capped at 0.75 percent.
C)that a minimum guaranteed rate of return must be specified in the prospectus.
D)that a mutual fund's prospectus include a standardized expense table.
Q4) Which is not a typical investment found in a bond fund?
A)Corporate bonds
B)Aggressive growth stocks
C)Preferred stock
D)High-dividend-paying stocks
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Chapter 16: Real Estate and High-Risk Investments
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112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/26533
Sample Questions
Q1) The amount of money left over after paying operating expenses in an income producing investment is called profit.
A)True B)False
Q2) Commercial property purchased to rent to other is designed for residential living such as houses,duplexes,apartments,mobile homes,and condominiums.
A)True B)False
Q3) Which of the following statements about options is not true?
A)Covered puts reduce risks.
B)Options holders generally make money by buying or selling the underlying asset.
C)Most options expire worthless.
D)Stock options are considered high-risk.
Q4) One advantage of an investment in real estate is that leverage can increase an investor's return.
A)True B)False
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Chapter 17: Retirement and Estate Planning
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269 Verified Questions
269 Flashcards
Source URL: https://quizplus.com/quiz/26534
Sample Questions
Q1) All property included in an estate must go through probate.
A)True
B)False
Q2) Shudan earned $9,600 working part-time last year.How many Social Security credits did Shudan earn for Social Security coverage?
A)2
B)4
C)6
D)8
Q3) The dollar amount of Social Security benefits received depends on the level of earnings during the working years.
A)True
B)False
Q4) A solo 401(k) is strictly for sole proprietors who have no employees.
A)True
B)False
Q5) Living trusts take effect during the grantor's lifetime.
A)True
B)False
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