Personal Money Management
Exam Answer Key
Course Introduction
Personal Money Management provides students with the foundational knowledge and practical skills necessary to effectively manage their finances throughout life. Topics covered include budgeting, saving, banking, credit and debt management, investing basics, insurance, taxes, and strategies for achieving short- and long-term financial goals. The course emphasizes responsible decision-making and equips students with the tools to build financial security, avoid common financial pitfalls, and plan for future expenses such as buying a home, retirement, and unexpected emergencies. Through real-world examples and hands-on activities, students develop confidence and competence in managing their personal finances.
Recommended Textbook
Personal Financial Planning 14th Edition by Randy Billingsley
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15 Chapters
2516 Verified Questions
2516 Flashcards
Source URL: https://quizplus.com/study-set/3416 Page 2
Chapter 1: Understanding the Financial Planning Process
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143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/67829
Sample Questions
Q1) The three key groups in the economic environment are
A)government, regulation, and business.
B)government, consultants, and business.
C)consumers, economists, and business.
D)consumers, business, and managers.
E)government, consumers, and business.
Answer: E
Q2) The longer you wait to begin retirement planning,the less you will likely have in your retirement fund.
A)True
B)False
Answer: True
Q3) About [50% | 75%] of married adults share all their money with their mate. Answer: B
Q4) Two persons with equal average propensities to consume will not necessarily have equal standards of living because of differences in income.
A)True
B)False Answer: True
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Chapter 2: Using Financial Statements and Budgets
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166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/67830
Sample Questions
Q1) A solvency ratio shows how much "cushion" you have as a protection against insolvency.
A)True
B)False
Answer: True
Q2) The savings ratio is calculated by dividing the cash surplus by before-tax income.
A)True
B)False
Answer: False
Q3) The income and expense statement includes
A)income, liabilities, and net worth.
B)income, expenses, and cash surplus or deficit.
C)expenses, net worth, and cash surplus or deficit.
D)net worth, cash surplus or deficit, and income or expenses.
E)savings, cash surplus or deficit, and income or expenses.
Answer: B
Q4) If you pay off your debt but make no changes in your assets,your net worth will [increase | decrease].
Answer: A
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Chapter 3: Preparing Your Taxes
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179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/67831
Sample Questions
Q1) Usually a married couple will pay less income tax if they file [jointly | separately].
Answer: A
Q2) You have owned and lived in your home for 8 years.Now you have received an excellent promotion,but you will have to sell your home and move to another community.You expect to realize a capital gain of $100,000 on the home's sale.The capital gain will
A)be taxable as ordinary income.
B)be taxable at the 15% tax bracket.
C)be taxable at the appropriate long-term capital gains rate.
D)not be taxable because the home was your principal residence.
E)not be taxable because this is a job-related move.
Answer: D
Q3) Tax credits reduce your
A)tax liability.
B)adjusted gross income.
C)tax refund.
D)tax withholding.
E)taxable income.
Answer: A
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Page 5
Chapter 4: Managing Your Cash and Savings
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175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/67832
Sample Questions
Q1) Which of the following accounts has special tax advantages under certain conditions when used to fund qualified college education expenses?
A)Certificate of deposit
B)U.S. Treasury bill
C)Series EE savings bonds
D)Money market mutual fund
E)Regular savings
Q2) The stated interest rate on your account is 5% with interest compounded monthly.If you deposit $50 each month,how much will you have in your account in 5 years? (Use time value tables or financial calculator.)
A)$3,000
B)$3,050
C)$3,200
D)$3,400
E)$4,350
Q3) [Both the depositor and writer | Only the writer] of a "bad" check will likely be charged a fee by their/his banks/bank.
Q4) [I savings bonds | Treasury bills] are sold at face value.
Q5) Today the differences between a commercial bank and an S&L are [minor | major].
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Chapter 5: Making Automobile and Housing Decisions
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179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/67833
Sample Questions
Q1) A real estate sales contract will include
A)the amount you are willing to pay for the property.
B)the terms of the mortgage loan.
C)deed restrictions.
D)market value of the property.
E)all of these.
Q2) A short sale does not affect a distressed homeowner's credit score as much as a foreclosure.
A)True
B)False
Q3) Condominiums are generally less costly than single-family,detached homes.
A)True
B)False
Q4) Most lenders do not want your monthly installment loan payments to exceed [36 | 50] percent of your monthly income.
Q5) According to federal law,private mortgage insurance on most loans ends automatically once the mortgage is paid down to 78% of the original value of the house.
A)True
B)False
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Chapter 6: Using Credit
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155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/67834
Sample Questions
Q1) The APR on a credit card account is 16%.Assuming a $1,926 balance and a $40 minimum payment,how much of the minimum payment will go to interest?
Q2) A debt safety ratio of 25% might be a signal of financial trouble ahead.
A)True
B)False
Q3) A credit card user's credit rating will be harmed if she pays only the minimum monthly payment on a credit card.
A)True
B)False
Q4) Credit should not consistently be used for nondurable goods.
A)True
B)False
Q5) If you initiated the telephone call,it is okay to give your credit card account number when ordering/purchasing from major catalog houses,airlines,hotels,and so on.
A)True
B)False
Q6) A person who pays his credit balance off every month should look for a credit card with a [long | short] grace period.
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Chapter 7: Using Consumer Loans
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/67835
Sample Questions
Q1) The Rule of 78 loads an inordinate amount of interest charges to the [early | later] months of the loan.
Q2) Credit unions lend money to qualified people who are A)employees.
B)members.
C)previous borrowers.
D)policyholders.
E)stockholders.
Q3) Savings and loan associations dominate the consumer loan market.
A)True
B)False
Q4) The interest rate on a loan against your life insurance policy is set at the time the policy is taken out.
A)True
B)False
Q5) The interest paid on a student loan [is sometimes | is not] tax deductible.
Q6) The cash value of a life insurance policy can be used as a source of loan collateral. A)True
B)False
Page 9
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Chapter 8: Insuring Your Life
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151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/67836
Sample Questions
Q1) The right of the policyholder to the cash value of a whole life policy is a nonforfeiture right.
A)True B)False
Q2) Life insurance policy loans are generally not taxable in the year taken and not deductible in the year repaid.
A)True B)False
Q3) The need for additional life insurance can be determined by looking at the difference between available resources and family monetary needs.
A)True
B)False
Q4) Term life insurance becomes less expensive as you grow older. A)True B)False
Q5) In order to predict accurately the number of losses that will occur in a given time,insurance companies must study [large | small] numbers of cases.
Q6) If a loss is certain to occur,there is [a | no] risk.
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Chapter 9: Insuring Your Health
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/67837
Sample Questions
Q1) A stop-loss provision places a cap on the amount of participation required.
A)True
B)False
Q2) Scheduled surgical benefits tend to be [very close to | way below] what most surgeons will charge.
Q3) When there is a co-insurance or participation clause in a health insurance policy,the amount the insurance will pay is computed [before | after] the deductible is paid.
Q4) Medicare Advantage policies require payment from the policyholder in the form of a
A)Deductible
B)Co-insurance
C)Copayment
D)Excess charge
E)a and b
Q5) Having your "reasonable and customary" surgical expenses paid is an example of [fee-for-service | scheduled] benefits.
Q6) Only 10% of American adults have purchased long-term care insurance.
A)True
B)False
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Chapter 10: Protecting Your Property
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168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/67838
Sample Questions
Q1) Liability insurance generally provides some coverage for legal fees.
A)True
B)False
Q2) Which Homeowners' policy is best suited for a resident of a rented apartment to cover that person's personal property?
A)HO-3
B)HO-4
C)HO-5
D)HO-8
E)A Homeowners' policy will not apply since the real estate involved is not owned by the insured.
Q3) The principle of indemnity states that the insured can be compensated for an amount equal to his economic loss.
A)True
B)False
Q4) Actual cash value provides coverage at the current market value of your property.
A)True
B)False
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Page 12
Chapter 11: Investment Planning
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162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/67839
Sample Questions
Q1) Preferred stocks are the common stocks of ultra blue-chip companies.
A)True
B)False
Q2) The [broker | dealer] market is made up of both the NASDAQ market and the OTC market.
Q3) A diversified securities portfolio is characterized by
A)dissimilar risk and return characteristics of the securities.
B)concentrating on a single industry.
C)minimal loss potential.
D)stable earnings.
E)formula timing.
Q4) Assume that the price of ABC common stock fell in a short period of time from $105 to $84.Which of the following investors probably made the most money?
A)Abe took a long position in 1,000 shares of ABC.
B)Bert took a short position in 1,000 shares of ABC.
C)Carrie kept her money in CDs at the bank.
D)Darren shorted 2,000 shares of ABC using a margin loan.
E)Earl used a margin loan to finance a 2000-share long position in ABC.
Q5) Day trading is [illegal | risky].
Q6) A [bull | bear] market is characterized by falling stock prices.
Page 13
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Chapter 12: Investing in Stocks and Bonds
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184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/67840
Sample Questions
Q1) Historically,the long-term performance of stock outstrips that of bonds.
A)True
B)False
Q2) Advantages of common stock investments include
A)guaranteed dividend income.
B)potential for high return
C)liquidity.
D)b and c
E)a, b, and c
Q3) Publicly traded issues are only available to qualified investors.
A)True
B)False
Q4) Past returns on an investment are [an indication | a guarantee] of future returns.
Q5) Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.
A)True
B)False
Q6) The possibility that a corporation might fail is [economic | business] risk.
Q7) The commonly cited price for a bond is usually its [clean | dirty] bond price.
Page 14
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Chapter 13: Investing in Mutual Funds
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176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/67841
Sample Questions
Q1) Growth funds [?do | ?do not] involve a fair amount of risk.
Q2) Mutual funds do not offer
A)automatic reinvestment plans.
B)guaranteed performance.
C)regular income programs.
D)conversion privileges.
E)retirement plans.
Q3) Load fees charged on mutual funds help insure that the fund is well managed and that the investor's yields will be greater than those on no-load funds.
A)True
B)False
Q4) An investor with a small amount of money should stick to using load funds instead of no-load funds.
A)True
B)False
Q5) There are more closed-end investment companies than there are open-end companies.
A)True
B)False
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Chapter 14: Planning for Retirement
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205 Verified Questions
205 Flashcards
Source URL: https://quizplus.com/quiz/67842
Sample Questions
Q1) About 40% of all full-time workers are covered by company-financed retirement plans.
A)True
B)False
Q2) Judy,age 68,is receiving Social Security benefits.She received $45,000 in consulting income this year.Her Social Security benefits [will | will not] be reduced because of these earnings.
Q3) The major financial benefit of beginning your retirement funding early is related to
A)increased cost of living.
B)compound interest.
C)reduced anxiety.
D)inflation.
E)investment returns.
Q4) Having an accurate current income and expenditures statement would be very useful when calculating retirement needs.
A)True
B)False
Q5) A Roth IRA will be funded with [pre | post] tax dollars.
Q6) Inflation will have [little | great] impact on your retirement plans.
Page 16
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Chapter 15: Preserving Your Estate
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177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/67843
Sample Questions
Q1) Dying intestate means dying with a valid will.
A)True
B)False
Q2) A codicil is a(n)
A)person who makes a will.
B)court-named guardian.
C)survivors' response to a will.
D)revision to a will.
E)executor's revision of a will.
Q3) Most estates are dissipated because the deceased had [an improper estate plan | no estate plan].
Q4) Gathering data on all aspects of the family is an important estate planning function.
A)True
B)False
Q5) If a gift tax has to be paid,the [giver | recipient] of the gift will pay it.
Q6) You could give an unlimited amount of assets to your [children | spouse] without incurring any gift taxes.
Q7) The person setting up a trust is called the [grantor | trustee].
Q8) Your estate is more likely to be subject to [state | federal] death taxes.
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