Personal Financial Management
Exam Questions
Course Introduction
Personal Financial Management provides students with the foundational knowledge and practical skills necessary to make informed decisions about personal finances. The course covers key topics such as budgeting, saving, investing, credit management, insurance, retirement planning, and tax strategies. Through real-world examples and case studies, students learn to set financial goals, analyze financial statements, assess risk, and develop strategies to achieve both short-term and long-term financial stability. Emphasis is placed on responsible financial behavior and the impact of financial decisions on overall quality of life.
Recommended Textbook
Personal Finance 7th Canadian Edition by Jack Kapoor
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15 Chapters
1696 Verified Questions
1696 Flashcards
Source URL: https://quizplus.com/study-set/2458
Page 2
Chapter 1: Personal Financial Planning: An Introduction
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Economic Factor: Trade balance measures?
A)The total value of goods and services produced within a country's borders, including items produced with foreign resources
B)The difference between a country's exports and its imports
C)The cost of money; the cost of credit when you borrow; the return on your money when you save or invest
D)The dollars available for spending in our economy
E)The number of people without employment who are willing and able to work
Answer: B
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
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Chapter 2: Money Management Strategy: Financial
Statements and Budgeting
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Which of the following situations is a person who could be insolvent?
A)Assets $50,000; annual expenses $60,000
B)Assets $68,000; net worth $22,000
C)Liabilities $45,000; net worth $6,000
D)Assets $5,000;liabilities $6,000
E)Annual cash inflows$48,000; liabilities $50,000
Answer: D
Q2) The Crown family has a difficult time staying on a budget.In an effort to actually see what funds are available for various expenses, a ____________ budget would be most appropriate.
A)written
B)computerized
C)physical
D)deficit
E)mental
Answer: C
Q3) Personal recordscurrent budget, cheque book(s) and bank statements.
A)True
B)False
Answer: False
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Chapter 3: Planning Your Tax Strategy
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) What is step 5 in computing taxable income and your tax liability?
A)Determine total income
B)Calculate net income
C)Calculating taxable income
D)Calculate federal taxes owing
E)Calculating Net Federal Taxes
Answer: E
Q2) Tax records should be kept for a minimum of __________ rears from the date you receive your notice of assessment
A)you are not required to keep your tax records.
B)until age 65
C)three years for all records
D)six years for all records
E)three years, six years, or indefinitely, depending on the type of record
Answer: E
Q3) There is no significant difference between a federal tax credit and a federal tax deduction.
A)True
B)False Answer: False
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Chapter 4: Banking Services of Financial Institutions
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) A cash advance is what type of short term financial service?
A)Savings
B)Chequing
C)Credit Card
D)Cash availability
E)Investment
Q2) Which of the following is not considered an outflow when comparing chequing account costs?
A)Monthly service charge
B)Average number of cheques written per month
C)Average number of deposits written per month
D)Fee for dropping below a minimum balance
E)Average monthly balance and the rate of return
Q3) Which of the flowing is not a concern of online banking?
A)Time savings
B)Costly fees for ATM's
C)Difficulty depositing cash
D)Phishing
E)Overspending
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Page 6
Chapter 5: Introduction to Consumer Credit
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) A good example of an open-end credit is
A)the use of a bank credit card to make a purchase.
B)the mortgage loan from a savings and loan institution.
C)automobile loan from a credit union.
D)installment loan from a furniture store.
E)installment loan for purchasing a major appliance.
Q2) Another name for credit when loans are made on a continuous basis and borrower is billed periodically for at least partial payment is known as:
A)a line of credit.
B)convenience credit.
C)revolving credit.
D)installment credit.
E)bank card credit.
Q3) Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.
A)True
B)False
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Chapter 6: Choosing a Source of Credit: The Costs of Credit
Alternatives
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113 Verified Questions
113 Flashcards
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Sample Questions
Q1) The disadvantage of using an interest only line of credit is the considerably longer time it takes to repay the loan in comparison to a traditional consumer installment loan.
A)True
B)False
Q2) What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 6%?
A)$416
B)$432
C)$483
D)$556
E)$565
Q3) What is the interest rate on a Canada Student Loan if the prime rate is 5%?
A)2.5%
B)5%
C)7.5%
D)10%
E)12.5%
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Page 8
Chapter 7: The Finances of Housing
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) The sub-prime mortgage crisis in 2007 was caused by
A)a housing bubble
B)excessive risk taking by lenders and investors
C)loose lending practices
D)low interest rates
E)all four factors contributed
Q2) A disadvantage of renting an apartment is:
A)Higher utility expenses
B)Financial commitment
C)Pay GST
D)Limited remodeling
E)Limited mobility
Q3) Variable rate mortgages with a rate cap prevent the borrower from having to pay an interest rate significantly higher than the one in the original agreement.
A)True
B)False
Q4) Real estate agents will provide you with services using an hourly rate.
A)True
B)False
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Chapter 8: Home and Automobile Insurance
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) Coverage for income replacement, medical, rehabilitation and attendant care expenses, and death and funeral costs for people who were injured in your automobile, including yourself are covered by what type of auto insurance?
A)Bodily injury
B)Accident Benefits
C)Uninsured motorist's protection
D)Property damage
E)Comprehensive physical damage
Q2) Risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible are covered by what type of auto insurance?
A)Bodily injury
B)Accident Benefits
C)Uninsured motorist's protection
D)Property damage
E)Comprehensive physical damage
Q3) A speculative risk is a risk that carries a chance of either loss or gain.
A)True
B)False
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Page 10
Chapter 9: Life, Health, and Disability Insurance
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) You should seek a disability policy that pays benefits for life.
A)True
B)False
Q2) Subject to certain minimums, which life insurance is designed to let you pay premiums at any time in virtually any amount?
A)universal life
B)ordinary life
C)whole life.
D)adjustable life
E)variable life
Q3) Generally, disability income policies with longer waiting periods
A)have higher premiums.
B)have lower premiums.
C)have about the same premium.
D)Are issued by smaller insurance companies.
E)Are issued by larger insurance companies.
Q4) The "free-look" period allows you to cancel your life insurance without penalty anytime within 10 days.
A)True
B)False
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Chapter 10: Fundamentals of Investing
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) Anne Marie earns $25,000 a year.Her monthly expenses total $1,200.What is the minimum amount of money that Ms.Lynn should set aside in an emergency fund?
A)$1,200
B)$1,800
C)$2,400
D)$3,600
E)$12,500
Q2) For an investor who wants to speculate, which of the following investments would be appropriate?
A)red-chip stocks
B)derivatives
C)utility stocks
D)corporate bonds
E)preferred stock issues
Q3) Potential investors should wait until they put their financial affairs in order before starting to invest.
A)True
B)False
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12
Chapter 11: Investing in Stocks
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) Today, it is possible for investors to access a corporation's home page in order to evaluate an investment in its stock.
A)True
B)False
Q2) To safeguard investments, stock owners who believe that the price of their stock will go down during an option period will purchase a
A)futures contract.
B)short contract.
C)call option.
D)put option.
E)margin contract.
Q3) The type of stock that may earn more than the stated dividend if the firm has a good year is ____________ stock.
A)common
B)convertible preferred
C)participating preferred
D)cumulative preferred
E)callable preferred
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13
Chapter 12: Investing in Bonds
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) Which of the following statements is false?
A)The federal government sells bonds and securities to finance both the national debt and the government's ongoing activities.
B)Federal government securities carry a reduced risk of default when compared to corporate securities.
C)Federal government treasury securities offer lower interest rates than corporate bonds.
D)Most individual investors that purchase treasury bills, notes, and bonds bid competitively.
E)Treasury securities may be purchased through banks or brokers.
Q2) The only way an investor can make money on a bond investment is to hold the bond until maturity.
A)True
B)False
Q3) A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.
A)True
B)False
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14
Chapter 13: Investing in Mutual Funds
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) A mutual fund that invests in common stocks and bonds with the primary objective of earning tax-advantaged income is called a(n) ____________ fund.
A)balanced
B)capital growth
C)dividend
D)income
E)money market
Q2) The managers of mutual funds tailor their investment portfolios to the investment objectives of their customers.
A)True
B)False
Q3) Income dividends and capital gain distributions are
A)exempt from taxation.
B)subject to federal taxation.
C)subject to federal taxation after the first $1,000.
D)subject to federal taxation after the first $2,000.
E)subject to federal taxation after the first $8,000.
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Page 15
Chapter 14: Retirement Planning
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99 Flashcards
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Sample Questions
Q1) To stretch your income during retirement, you could
A)skip leisure activities.
B)cut your food expenditures.
C)cancel your life and property insurance.
D)use your skills and time instead of your money.
E)not travel.
Q2) Even if it is a life annuity, payments cannot continue until death.
A)True
B)False
Q3) Your net worth is equal to your assets minus liabilities.
A)True
B)False
Q4) A(n) ____________ is appealing because it allows people to stay in their homes as they grow older and frail.
A)accessory apartment
B)caretaker arrangement
C)commercial rental
D)universal design home
E)congregate housing
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Chapter 15: Estate Planning
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Even if your assets such as life insurance, annuities, or RRSPs already have a named beneficiary, they will not be transferred independently of your will.
A)True
B)False
Q2) Estate planning has two parts.The first part consists of
A)deciding on who is going to get what.
B)transferring your estate in the manner you have specified.
C)building your estate through savings, investments, and insurance.
D)evaluating your assets and liabilities.
E)Meeting your financial planner.
Q3) A trust established by your will that becomes effective upon your death is called a(n) ____________ trust.
A)testamentary
B)living
C)general
D)formal
E)insurance
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