Personal Financial Planning
Exam Solutions
Course Introduction
Personal Financial Planning focuses on equipping students with the knowledge and skills necessary to effectively manage personal finances throughout different stages of life. The course covers essential topics such as budgeting, savings, debt management, credit, taxation, insurance, investment strategies, retirement planning, and estate planning. Students will learn how to set financial goals, create and implement financial plans, analyze financial statements, and make informed decisions to build and protect wealth. Emphasis is placed on practical application of financial principles and ethical considerations, helping students to navigate financial challenges and achieve long-term financial stability and security.
Recommended Textbook
Personal Finance 12th Edition by E. Thomas Garman
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17 Chapters
3013 Verified Questions
3013 Flashcards
Source URL: https://quizplus.com/study-set/3300 Page 2
Chapter 1: Understanding Personal Finance
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141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/65489
Sample Questions
Q1) A commission-only financial planner/broker charges an up-front fee for providing services.
A)True
B)False
Answer: False
Q2) Lisa Carson has the opportunity to receive $12,000 now or $15,000 in four years.If Lisa can earn 6 percent on her investments,what is the present value of the $15,000 payment?
A) $15,000
B) $13,785
C) $11,881
D) $9,505
Answer: C
Q3) Employer-sponsored retirement plans include all of the following except A) 401(k).
B) 403(b).
C) 457.
D) IRA.
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/65488
Sample Questions
Q1) In preparation for a job interview,you should
A) compile some personal stories.
B) anticipate interview questions and prepare responses.
C) create a list of negative responses to questions that you should then avoid.
D) compile some personal stories and anticipate interview questions and prepare responses.
Answer: D
Q2) Nonsalary benefits are forms of compensation that result in the employee not having to pay out-of-pocket money for certain expenses.
A)True
B)False
Answer: True
Q3) As many as 75 percent of all job openings are listed in want ads.
A)True
B)False
Answer: False
Q4) Posting your résumé on Monster.com is all you need to do to get a good job.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Financial Statements,tools,and Budgets
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151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/65487
Sample Questions
Q1) For most people,the only way to increase net worth is to spend less than their income;people must save and invest.
A)True
B)False
Answer: True
Q2) Values have little impact on financial goals.
A)True
B)False
Answer: False
Q3) The use of automated teller machines is recommended as a valid method of controlling expenditures.
A)True
B)False Answer: False
Q4) Discretionary income is the money left over once the necessities of living are covered.
A)True
B)False Answer: True
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Chapter 4: Managing Income Taxes
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196 Verified Questions
196 Flashcards
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Sample Questions
Q1) Which of the following deductible expenses can be prepaid for tax purposes?
A) Personal property taxes
B) Charitable contributions
C) Medical expenses
D) All of these
Q2) If you are owed a refund on your income tax return you can either have the funds sent to you or apply them to next year's taxes.
A)True
B)False
Q3) A federal income tax reform proposal that would have a single rate applied to all taxpayers regardless of income level is called the
A) flat tax.
B) value-added tax.
C) consumption tax.
D) regressive tax.
Q4) Each year the tax brackets are adjusted to reduce the effects of inflation.
A)True
B)False
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Page 6
Chapter 5: Managing Checking and Savings Accounts
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181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/65485
Sample Questions
Q1) Tom and Mindy want to keep $420,000 in cash equivalents that are federally insured.They could accomplish this by
A) investing $170,000 in a money market mutual fund and $250,000 in a federally insured credit union.
B) dividing it equally into three different joint accounts in the same federally insured bank.
C) dividing it equally into two different joint accounts in two different federally insured savings banks.
D) putting $75,000 in two joint accounts in different branches of the same bank.
Q2) If your checking account balance drops to less than perhaps $50 at any point during a month you would likely be better off with a minimum deposit account in order to avoid fees.
A)True
B)False
Q3) Some stored value cards can be "reloaded" with additional funds.
A)True
B)False
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Page 7
Chapter 6: Building and Maintaining Good Credit
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) Which of the following is not true regarding loans based on the cash values built up in cash-value life insurance policies?
A) The interest rates are low,ranging from 4 to 6 percent.
B) Should the insured person die before repaying the loan,the life insurance company will forgive the loan.
C) Many people fail to pay back such loans because no fixed schedule of repayment is established.
D) Insurance companies do not pressure borrowers to repay the debt.
Q2) 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
Q3) Lenders are not allowed to discriminate among applicants. A)True
B)False
Q4) If information in your credit report is proved to be erroneous,it must be corrected by the credit bureau.
A)True
B)False
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Chapter 7: Credit Cards and Consumer Loans
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) An installment purchase agreement provides a measure of protection for A) the borrower.
B) the creditor.
C) the lender.
D) All of these.
Q2) The declining-balance method is widely used by credit unions and consumer finance companies to calculate interest.
A)True
B)False
Q3) The date on which a credit cardholder makes a purchase or receives a credit is known as the transaction date.
A)True
B)False
Q4) A retail credit card allows the holder to make purchases at numerous businesses.
A)True
B)False
Q5) The amount owed on a debt is the principal.
A)True
B)False
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Chapter 8: Vehicles and Other Major Purchases
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Jessie just bought an SUV and financed it with an automobile loan.She will pay 48 monthly payments of $425 each and one final payment of $3,000.What type of clause is in her sales contract?
A) Repossession
B) Acceleration
C) Balloon
D) Prepayment penalty
Q2) A form of dispute resolution that is not legally binding on either party is
A) civil court.
B) small claims court.
C) mediation.
D) arbitration.
Q3) Comparison shopping for a new vehicle includes
A) deciding between needs and wants.
B) fitting the purchase into your budget.
C) obtaining a loan preapproval.
D) determining the value of your trade-in.
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10
Chapter 9: Obtaining Affordable Housing
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214 Verified Questions
214 Flashcards
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Sample Questions
Q1) FHA mortgage insurance premiums may only be paid as a single up-front,lump-sum payment.
A)True
B)False
Q2) The purpose of a biweekly loan is to
A) shorten the repayment period of a loan.
B) enhance the tax advantages of home ownership.
C) pay smaller monthly payments.
D) slow equity buildup.
Q3) A point,as defined in the real estate market,is ____ percent of the loan amount.
A) one-half of
B) 1
C) 1 and one-half
D) 2
Q4) A loan amortization schedule will reveal that with each subsequent payment,the portion of each monthly payment that goes towards interest increases while the portion that goes towards the principal decreases.
A)True
B)False
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Chapter 10: Managing Property and Liability Risk
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202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/65497
Sample Questions
Q1) The additional cost of increasing the liability coverage on homeowner's policies is substantial.
A)True
B)False
Q2) Which of the following HO forms is especially written for condominium owners?
A) HO-3
B) HO-4
C) HO-6
D) HO-8
Q3) The cost of a $1 million professional liability policy would vary slightly regardless of the profession of the policy buyer.
A)True
B)False
Q4) The type(s)of insurance you carry but which covers losses suffered by others is called ____ insurance.
A) liability
B) income
C) auto
D) homeowner's
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Chapter 11: Managing Health Expenses
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126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/65496
Sample Questions
Q1) A ____ power of attorney takes effect when a incapacitating medical condition occurs.
A) limited
B) durable
C) special
D) partial
Q2) The greater your age when a disability income policy is purchased,the more you might need inflation protection.
A)True
B)False
Q3) Lyle's health care plan will pay 75 percent of all covered expenses over the first $500 per year.This policy contains
A) policy limits and copayments.
B) coinsurance and a deductible.
C) a deductible and copayments.
D) policy limits and coinsurance.
Q4) The official name of the 2010 health insurance reform law is Obamacare.
A)True
B)False
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Chapter 12: Life Insurance Planning
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214 Verified Questions
214 Flashcards
Source URL: https://quizplus.com/quiz/65495
Sample Questions
Q1) Adjustable life insurance policies allow changes with no added proof of insurability.
A)True
B)False
Q2) Settlement options for life insurance proceeds include all of the following except A) lump sum.
B) interest income.
C) income for a specific period.
D) additional paid-up insurance.
Q3) The ____ settlement option specifies that the insurance company pay out the total amount of the death benefit immediately after death.
A) income for life
B) income of a specific amount
C) lump-sum
D) interest income
Q4) Cash dividends are paid only on participating life insurance policies.
A)True
B)False
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Page 14
Chapter 13: Investment Fundamentals
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173 Verified Questions
173 Flashcards
Source URL: https://quizplus.com/quiz/65494
Sample Questions
Q1) Market efficiency reflects the speed at which new information is reflected in market prices for investments.
A)True
B)False
Q2) When choosing among investment alternatives you want to focus on their
A) current income.
B) capital gains.
C) interest.
D) yields.
Q3) ____ risk exists in situations that offer potential for gain as well as for loss.
A) Systematic
B) Pure
C) Market
D) Speculative
Q4) Most returns earned are derived from owning the right asset categories rather than specific investments.
A)True
B)False
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Page 15
Chapter 14: Investing in Stocks and Bonds
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351 Verified Questions
351 Flashcards
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Sample Questions
Q1) Refer to Figure 14-2.What is Sudsy Soap's P/E ratio?
A) 0.233
B) 2.33
C) 3.
D) 35
Q2) The Stock and Sym column of the stock quotes gives the name of the stock and its abbreviated trading symbol.
A)True
B)False
Q3) An indenture is a written legal agreement between a group of bondholders and the debtor describing the terms of the debt by setting forth the maturity date,interest rate,and other factors.
A)True
B)False
Q4) There is no cost for placing a stop order if the order is never executed.
A)True
B)False
Q5) Betas are used to measure the risk of a security relative to the overall market.
A)True
B)False
Page 16
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Chapter 15: Investing Through Mutual Funds
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172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/65492
Sample Questions
Q1) Net asset value increases when
A) the value of the underlying securities increases.
B) gains realized on the underlying securities are paid out to shareholders.
C) a mutual fund attracts new money from investors.
D) All of these.
Q2) Mutual funds 12b-1 fees have the same effect as front-end loads in that they reduce the return received by investors.
A)True
B)False
Q3) The SEC requires that a mutual fund's profile prospectus include an estimate of the future rate of return for the fund.
A)True
B)False
Q4) An aggressive-growth fund may employ high-risk investment techniques,such as borrowing money for leverage,short selling,hedging,and options.
A)True
B)False
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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/65491
Sample Questions
Q1) Painting a rental property is an example of a repair.
A)True
B)False
Q2) The average rate of return for all investors in futures is zero.
A)True
B)False
Q3) ____ must actually buy or sell an optioned common stock if requested by the holder of the option contract.
A) The corporation that issued the stock
B) The broker who handled the option contract
C) The writer of the option contract
D) None of these.
Q4) People who want to invest speculatively in currencies can do so on the ____ exchange.
A) foreign stock
B) money
C) NASDAQ
D) forex
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Page 18
Chapter 17: Retirement Planning
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257 Verified Questions
257 Flashcards
Source URL: https://quizplus.com/quiz/65490
Sample Questions
Q1) A testamentary trust becomes effective upon the death of the beneficiary.
A)True
B)False
Q2) A positive aspect of defined-benefit plans is that
A) they are more transferable than defined-contribution plans.
B) they generally permit earlier vesting than defined-contribution plans.
C) the funds are out of reach of corporate creditors.
D) there is more certainty about the amount of the benefit than with defined-contribution plans.
Q3) Persons who are either fully insured or currently insured are eligible to receive Social Security retirement benefits.
A)True
B)False
Q4) If you wait 7-9 years after starting your first full-time to begin saving for retirement,your nest egg at age 67 will likely be about one-half what it would have been if you had started right away.
A)True
B)False
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