Personal Finance
Test Preparation
Course Introduction
Personal Finance introduces students to the fundamental principles of managing individual and household financial resources. The course covers topics such as budgeting, saving, credit management, debt reduction, investing, retirement planning, insurance, and tax strategies. Emphasis is placed on developing practical skills for setting financial goals, making informed spending decisions, and evaluating financial products and services. By understanding these core concepts, students will be equipped to make sound financial choices and achieve long-term financial stability.
Recommended Textbook
Personal Finance 6th Edition by Jeff Madura
Available Study Resources on Quizplus
21 Chapters
2466 Verified Questions
2466 Flashcards
Source URL: https://quizplus.com/study-set/3396 Page 2
Chapter 1: Overview of a Financial Plan
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/67387
Sample Questions
Q1) Match the goals in the first column with the items in the second column:
1.short-term goal (a)To retire in 25 years
2.intermediate goal (b)To purchase a home in three years
3.long-term goal (c)To save enough money for books and tuition for next term
Answer: 1.c
2.b
3.a
Q2) Which of the following does not protect your assets and/or income?
A) Money insurance
B) Disability insurance
C) Automobile insurance
D) Life and health insurance
Answer: A
Q3) Which of the following is not a step in developing a financial plan?
A) Establish your financial goals
B) Consider your current financial position
C) Identify and evaluate alternative plans that could achieve your goals
D) Put your plan away for six months to a year and then review it for accuracy
Answer: D
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
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/67376
Sample Questions
Q1) Property such as a person's home,car,and furniture is called
A) liquid assets.
B) household assets.
C) major property assets.
D) investment assets.
Answer: B
Q2) Which of the following is a liquid asset?
A) Cash in a savings account
B) A swimming pool
C) Real estate
D) Stock held in a retirement account
Answer: A
Q3) One of the problems in making a monthly budget is that some expenses fluctuate quite a bit from month to month.
A)True
B)False
Answer: True
Q4) If your monthly disposable income equals $1,500 and you currently save $500/month,your savings rate is ________.
Answer: 33%
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
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/67373
Sample Questions
Q1) You have set a $100,000 goal for a college funds for your newborn child.You plan on having a fixed amount taken from your salary each month to meet this goal.The calculation to determine the monthly amount is called
A) planning and budgeting.
B) present value of an annuity.
C) future value of an annuity.
D) future value of a series of single payments.
Answer: C
Q2) Describe how present and future values concepts apply to your income and expenses and ultimately your personal budget,income statement,and balance sheet. Answer: This is basically a subjective answer.Present and future value concepts affect your investing,purchase,and retirement decisions.The results of these decisions will have a positive or negative impact on your personal financial statements.
Q3) The time period over which you save money has very little impact on its growth.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Using Tax Concepts for Planning
Available Study Resources on Quizplus for this Chatper
121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/67372
Sample Questions
Q1) If you are working part time while going to school and have no dependents other than yourself,do not itemize deductions and have no capital asset transactions,which Federal Income Tax return form should you file?
A) 1040EZ
B) 1120
C) 1040X
D) Since you are part time and make just a few thousand dollars, you do not need to file an income tax return.
Q2) Which of the following gross income is not taxable income?
A) Health insurance reimbursements
B) Interest income
C) Dividends
D) Tips received
Q3) You should claim itemized deductions if
A) itemized deductions exceed the standard deduction.
B) the standard deduction exceeds itemized deductions.
C) itemized deductions exceed exemptions.
D) itemized deductions exceed tax credits.
Q4) A(n)________ offsets taxes by subtracting the full amount from the taxes owed.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Banking and Interest Rates
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/67371
Sample Questions
Q1) Which of the following financial institutions specializes in making personal loans to people who are perceived to have a higher risk of default?
A) Finance companies
B) Commercial banks
C) Savings institutions
D) Credit unions
Q2) The opening balance in your checking account was $1000.During the month you had the following activity: wrote two checks for $45.00 and $75.00 but only the first one cleared; had two debit card transactions for $50 and $35.20; received a bank charge for the account of $6,deposited a check you received from a friend for $100 but it did not clear by month end.What is your month end account balance?
A) $1052.13
B) $875.45
C) $863.80
D) $888.80
Q3) Banks do not charge fees for safety deposit boxes.
A)True
B)False
Q4) Describe four factors you should consider when choosing a financial institution.
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
104 Verified Questions
104 Flashcards
Source URL: https://quizplus.com/quiz/67370
Sample Questions
Q1) Which of the following items will give you the greatest liquidity?
A) One year CD
B) Savings account
C) Checking account
D) NOW account
Q2) Your ability to cover any short-term cash deficiencies is called
A) solvency.
B) wealth.
C) liquidity.
D) cash planning.
Q3) An asset management account combines
A) assets and expenses.
B) deposit accounts with a brokerage account.
C) a savings account with a brokerage account.
D) a savings account with long-term investments.
Q4) Risk management of money market investments involves assessing the risk exhibited by the investment.
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
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/67369
Sample Questions
Q1) Posing as an employee of a brokerage firm to obtain information to allegedly update your account information is an example of A) shoulder surfing.
B) dumpster diving.
C) pretexting.
D) skimming.
Q2) Which of the following statements is not true regarding reviewing your credit report?
A) You will be able to determine if any errors have been made so they can be corrected.
B) It will help determine if there are credit cards that you should apply for to improve your credit standing.
C) It will reveal the kind of information that lenders will consider when making a decision to extend credit.
D) It will reveal deficiencies that you can work to eliminate that will improve your credit rating.
Q3) Very high credit scores are considered anything over ________.
Q4) List at least three disadvantages of using credit.
Q5) Name and briefly discuss three tactics that an identity thief may use.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Managing Your Credit
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/67368
Sample Questions
Q1) Which of the following is not true regarding payroll cards?
A) The employer can require employees to accept their wages on these cards.
B) Employers use payroll cards because they are cheaper than issuing payroll checks.
C) Fees are frequently associated with the cards.
D) The cards are convenient for employees who lack bank accounts.
Q2) "Wise" use of credit cards includes the following behaviors
A) tracking your purchases.
B) paying off the entire card balance monthly to avoid interest charges.
C) using credit if you find something "you just have to have."
D) Both A and B are correct.
Q3) To properly manage your money you should use a credit card only if you will have the cash to cover the payment when you receive your credit card statement.
A)True
B)False
Q4) The interest charged on purchases and cash advances on credit cards is computed in the same way.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Personal Loans
Available Study Resources on Quizplus for this Chatper
126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/67367
Sample Questions
Q1) You could reduce the interest rate you are paying on loans by
A) refinancing to a secured loan.
B) paying off credit card debt with a home equity loan.
C) refinancing to a shorter term loan.
D) A, B, and C are all viable possibilities
Q2) The monthly payment for a loan is dependent only on the size of the loan and the interest rate.
A)True
B)False
Q3) For which of the following items would a personal loan be a better option than a credit card for a college student?
A) Car maintenance expense
B) Tuition and dorm fees
C) Trips home for the holidays
D) Tickets to sporting events
Q4) A payday loan is a short-term loan provided to you if you need funds in advance of receiving your paycheck.
A)True
B)False
Q5) List four components of a loan contract
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Purchasing and Financing a Home
Available Study Resources on Quizplus for this Chatper
131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/67386
Sample Questions
Q1) The schedule that discloses the monthly payment that you will make,based on a specific mortgage amount,a fixed interest rate level,and maturity is called a(n)
A) depreciation schedule.
B) payment table.
C) amortization table.
D) obligation schedule.
Q2) If you think interest rates will rise in the near future,you should seek an adjustable rate mortgage (ARM).
A)True
B)False
Q3) A sales contract stipulates not only the price offered for a home,but also the repairs to be completed and the move-in date requested by the buyer.
A)True
B)False
Q4) Condominiums have the advantages of sharing expenses among owners and giving the owners more privacy than single-family homes.
A)True
B)False
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
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/67385
Sample Questions
Q1) Which of the following statements is not true concerning comprehensive and collision insurance?
A) If you are financing a car, this insurance is required by the lender.
B) Financially, it is advisable to take out the lowest deductible possible.
C) You may want to drop this coverage on an older car that is not being financed.
D) The deductible is really a form of self insurance.
Q2) A cash value home insurance policy pays the actual costs of replacing the damaged property.
A)True
B)False
Q3) Medical payments coverage insures against costs of medical care for you and other passengers in your car when you are at fault in an accident.
A)True
B)False
Q4) Once drivers are labeled as "high risk," they will not be able to get automobile insurance at any price.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Health and Disability Insurance
Available Study Resources on Quizplus for this Chatper
107 Verified Questions
107 Flashcards
Source URL: https://quizplus.com/quiz/67384
Sample Questions
Q1) A PPO health insurance plan allows individuals a better selection of health care providers,but is more expensive than an HMO.
A)True
B)False
Q2) Additional types of insurance commonly offered through employers include
A) dental insurance.
B) fitness insurance.
C) vision insurance.
D) Both A and C are correct
Q3) Under a discount on charge arrangement,the provider receives
A) a flat fee.
B) more than what it would normally charge for a particular service.
C) less than what it would normally charge for a particular service.
D) an amount equal to the charge for the service.
Q4) The Affordable Care Act allows young adults to continue on a parent's health insurance plan until age 19 at which time they must obtain their own coverage.
A)True
B)False
Q5) 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
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/67383
Sample Questions
Q1) Which type of life insurance is typically provided by an employer as part of the employee benefits package?
A) Variable life insurance
B) Decreasing-term life insurance
C) Term insurance
D) Dependant life insurance
Q2) The most accurate method of determining life insurance needs is
A) the income method.
B) the budget method.
C) subtracting your annual income from $1 million.
D) having enough insurance to provide $50,000 per year for 20 years.
Q3) Insurance companies are assigned ratings by all of the following,except
A) Moody's.
B) Standard and Poor's.
C) Securities and Exchange Commission.
D) A.M. Best.
Q4) settlement options
A)alternative ways a beneficiary can receive benefits
B)a single payment to the beneficiary
Q5) Describe the two methods used to determine the amount of life insurance needed.
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
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/67382
Sample Questions
Q1) The timing on the sale of a stock could make a big difference in the amount of taxes that are due on the profits.
A)True
B)False
Q2) Day traders always trade
A) in the primary market.
B) in either the primary or secondary markets.
C) with an objective of buying and selling within two hours.
D) using margin funding.
Q3) Before you start to invest,you should ensure liquidity by owning
A) individual stocks.
B) money market securities.
C) options and puts.
D) corporate bonds.
Q4) If you have $5,000 to invest but will need to use the funds in three years to buy a home,you should
A) invest in a diversified stock mutual fund.
B) buy stocks of relatively stable firms that have low risk.
C) buy a three-year CD.
D) put the money in a money market savings account.
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Investing in Stocks
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/67381
Sample Questions
Q1) If a stock is near it's 52 week low,that means the stock
A) is trading at its lowest volume for past year.
B) has a stock price that is near the lowest for the past year.
C) is reflecting very low sales for the company that issued the stock.
D) is a high risk investment.
Q2) When economic conditions are weak,the aggregate demand for products and services
A) declines.
B) increases.
C) remains the same.
D) may either decline or increase.
Q3) Stocks are usually bought or sold in round lots,which are multiples of $100.
A)True
B)False
Q4) With an online brokerage firm,you have all of the following except A) money market fund for uninvested cash.
B) a personal sales representative to answer your questions.
C) quick and convenient trades.
D) very low cost trades.
Q5) If you purchase stock ________ you are doing so with a portion of the funds borrowed from your broker.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Investing in Bonds
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/67380
Sample Questions
Q1) Municipal bonds tend to have a ________ coupon rate than Treasury bonds issued at the same time; however,municipal bonds usually offer a(n)________ after-tax return to investors.
A) higher; lower
B) lower; higher
C) higher; higher
D) lower; equal
Q2) A bond from Ginnie Mae is an example of a bond issued by A) a corporation.
B) the U.S. Treasury.
C) a municipality.
D) an agency of the federal government.
Q3) Convertible bonds tend to offer a(n)________ return than nonconvertible bonds. A) higher
B) lower
C) similar D) indexed
Q4) As interest rates rise,the market price of your bond is also likely to rise. A)True
B)False
Page 18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/67379
Sample Questions
Q1) If a mutual fund's performance is the result of conditions in the general stock market,the fund is being affected by the ________ risk.
Q2) Index stock funds always contain the stock of every company in a particular index.
A)True
B)False
Q3) If you are investing for the "long-term" and are interested in capital appreciation and comfortable with increased risk levels,you should consider a(n)________ or a(n)________.
A) global bond fund; international bond fund
B) growth fund; small cap fund
C) international index fund; global index fund
D) junk bond fund; domestic equity income fund
Q4) If a mutual fund's NAV is $50 and its expense ratio is 2%,what are the total expenses per share?
A) $2
B) $10
C) $1
D) $5
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
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/67378
Sample Questions
Q1) When two companies' profits tend to move in opposite directions in response to changing economic factors,the companies are likely
A) negatively correlated.
B) not correlated.
C) unrelated in industry sector.
D) in different regions of the world.
Q2) If you anticipate strong economic market conditions,you may want to
A) shift more funds to bonds.
B) shift more funds to stocks.
C) allocate more to cash.
D) shift more funds to bond mutual funds.
Q3) In order to add real estate to your investment portfolio,you may buy houses or other real estate directly or you may purchase real estate investment trusts (REITs).
A)True
B)False
Q4) Asset allocation uses what to reduce your risk from investing?
Q5) The purchasing of stocks in different industries,bonds,and several mutual funds would be a way to ________ your portfolio.
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
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/67377
Sample Questions
Q1) How much would need to be contributed each year for 30 years to accumulate $1,300,000 assuming a return on the investments of 8%? Round to the nearest dollar if needed.
A) $43,333
B) $46,800
C) $11,476
D) $15,000
Q2) If you are allowed to change investments in your retirement plan over time,you have a(n)________ plan.
Q3) What three factors do you need to calculate how much money you will accumulate by retirement?
Q4) Name two types of retirement plans available to the self-employed.
Q5) Which of the following is not a defined-contribution retirement plan offered by employers?
A) 401(k) plan, 403(b) plan
B) SEP
C) 403(b) plan
D) Keogh plan
Q6) Describe two types of annuities.
Q7) List three sources of income when you retire.
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
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/67375
Sample Questions
Q1) With samples of valid wills being available on Web sites and in book stores,it is not recommended that a person incur the additional expense of hiring a lawyer to write a will.
A)True
B)False
Q2) A trust involves the transfer of assets to a third party who manages these assets for a beneficiary.
A)True
B)False
Q3) Which of the following is not a type of trust?
A) Revocable living trust
B) Living trust
C) Standard family trust
D) Income trust
Q4) If you are married,have a small estate,and have no children,a(n)________ will probably serve your needs.
Q5) Estate planning is the act of planning how your wealth will be allocated before your death.
A)True
B)False
Page 22
To view all questions and flashcards with answers, click on the resource link above.
Chapter 21: Integrating the Components of a Financial Plan
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/67374
Sample Questions
Q1) You are 25 years old and saving for an early retirement.Assuming you have a high risk tolerance,which of the following can best help you reach your goal of retiring early?
A) Municipal bond fund
B) Money market securities
C) Common stock
D) Certificates of deposit
Q2) You should make investments only after you have sufficient liquidity and sufficient insurance to protect your existing assets.
A)True
B)False
Q3) Purposes of managing liquidity include all of the following except
A) determining how to keep the majority of your assets in liquid form.
B) having enough liquid assets to cover cash shortages.
C) maintaining adequate liquidity to avoid borrowing every time you need money.
D) maintaining just enough liquid assets to meet your needs.
Q4) ________ should be kept in a safe at home or in a safety deposit box at a bank.
Q5) It is easier to make monthly loan payments if you select financing that has relatively ________ maturities.
To view all questions and flashcards with answers, click on the resource link above. Page 23