Personal Money Management
Question Bank
Course Introduction
Personal Money Management explores the fundamental concepts and practical strategies needed to make informed financial decisions in everyday life. Covering topics such as budgeting, saving, banking, credit management, investing, insurance, and retirement planning, the course equips students with the tools to set financial goals, analyze spending habits, and build financial security. Through discussions, case studies, and hands-on projects, students gain practical knowledge to navigate real-world financial challenges and develop habits that foster long-term financial wellbeing.
Recommended Textbook
Personal Finance 2nd Canadian Edition by Jeff Madura
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17 Chapters
2226 Verified Questions
2226 Flashcards
Source URL: https://quizplus.com/study-set/3367
Page 2
Chapter 1: Overview of a Financial Plan
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128 Verified Questions
128 Flashcards
Source URL: https://quizplus.com/quiz/66868
Sample Questions
Q1) It is better to seek advice and information for your plan from only one source.
A)True
B)False Answer: False
Q2) The savings for a short-term goal will earn more interest than investments in a long-term goal such as a retirement plan.
A)True
B)False Answer: False
Q3) An important step in developing a financial plan is to record specific goals you want to achieve.
A)True
B)False Answer: True
Q4) If you spend $20 for your dinner, the opportunity cost is that you have forgone the possibility of using that money to buy gasoline for your car.
A)True
B)False Answer: True
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Chapter 2: Tools for Financial Planning - Applying Time
Value Concepts
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81 Verified Questions
81 Flashcards
Source URL: https://quizplus.com/quiz/66859
Sample Questions
Q1) If John makes annual year-end payments of $8337.83 on a 20-year loan with an annual interest rate of 7.5 percent., what is the original principal amount for John's loan?
A)$82 000
B)$83 325
C)$85 700
D)$85 000
Answer: D
Q2) Raymond wants to save the college tuition fees he will need in ten years by starting with a deposit of $6500 today and depositing another $500 at the end of each year. How much will Raymond have in ten years if he gets a rate of return of four percent?
A)$15 625
B)$11 960
C)$15 865
D)$17 023
Answer: A
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Chapter 3: Tools for Financial Planning - Planning With
Personal Financial Statements
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152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/66858
Sample Questions
Q1) During retirement years people tend to slow their spending as they adjust to a lower income.
A)True
B)False Answer: True
Q2) Cash outflows represent your liabilities, such as the pay-off value on your car or home.
A)True
B)False Answer: False
Q3) A personal cash flow statement is usually the starting point for an individual's or family's budget.
A)True
B)False Answer: True
Q4) A high debt to asset level means your liquidity may be at risk.
A)True
B)False
Answer: True
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Chapter 4: Tools for Financial Planning - Using Tax Concepts for Planning
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/66857
Sample Questions
Q1) A capital gain results from profit on the sale of capital assets.
A)True
B)False
Q2) Canada's tax system is called "progressive," meaning that the more you earn the more you pay in taxes.
A)True
B)False
Q3) If you have a salary of $38 000, medical expenses of $1600, and an RRSP contribution of $4000 and the federal tax rate is 15 percent, what federal tax will you pay?
A)$3500
B)$4860
C)$5013
D)$4929
Q4) A T4 slip is a document provided to you by A)your bank, showing how much interest you received.
B)your government, showing how much employment benefits you received.
C)your employer, showing your salary and all deductions associated with your employment.
D)your education institution showing your eligible tax credits.
6
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Chapter 5: Banking Services and Managing Your Money
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) You are charged for writing an NSF cheque; the person you made the cheque payable to is not.
A)True
B)False
Q2) If you have $10 000 that you do not expect to need for expenses in the next few years and you wish to put it somewhere so that it will earn a return, which of the following financial institutions would be the best option?
A)A bank
B)A mutual fund company
C)A credit union
D)Any of the above
Q3) Bank fees for the use of an automatic banking machine (ABM)are not usually a large consideration in choosing a bank with which to do business.
A)True
B)False
Q4) List four types of financial institutions that you have made use of or plan to deal with in the future.
Q5) Describe four factors you should consider when choosing a financial institution.
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Chapter 6: Managing Your Liquidity - Assessing,
and Securing Your Credit
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140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/66855
Sample Questions
Q1) Unless your identity is stolen by someone out of province, you should only report the crime to local law enforcement.
A)True
B)False
Q2) Use of Financial Calculator TI BA II Plus required. Your credit card had balances of $800 for 13 days, $600 for 5 days, and $650 for 12 days. At an effective rate of 1.5 percent interest per month (30 days)how much is the interest charge using the average balance method?
A)$9.40
B)$7.06
C)$30.75
D)$10.60
Q3) Revolving open-end credit typically does not specify a maximum amount that can be borrowed.
A)True
B)False
Q4) Equifax Canada is not one of the three primary credit bureaus.
A)True
B)False
Q5) Name and briefly discuss three tactics that an identity thief may use.
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Chapter 7: Personal Financing - Personal Loans
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119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/66854
Sample Questions
Q1) The cost of leasing a car versus purchasing one
A)is more.
B)is less.
C)is about the same.
D)varies depending on many factors.
Q2) The most favourable car financing is obtained from
A)commercial banks.
B)credit unions.
C)manufacturer's financing from car dealers.
D)getting quotes from various sources.
Q3) The co-signer of a loan is not responsible for any unpaid balance if the borrower does not repay the loan.
A)True
B)False
Q4) A lender would be able to charge you $40 interest on a one-month short-term loan of $400.
A)True
B)False
Q5) What does APR represent and what is the purpose of the Criminal Code in regulating interest charges?
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Chapter 8: Personal Financing - Purchasing and Financing a Home
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121 Verified Questions
121 Flashcards
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Sample Questions
Q1) The specific location of your home can influence the amount of property taxes and insurance you will pay.
A)True
B)False
Q2) A closed mortgage does not allow you to pay additional sums off the principal without paying a penalty.
A)True
B)False
Q3) What should be the first step in the home-buying process?
A)Identify the specific home you want to purchase
B)Determine a realistic affordable price range
C)Compare the costs of buying and renting
D)Find a good realtor
Q4) Mortgage companies usually charge interest semi-annually. What would be the effective rate of interest on a mortgage at 8.25 percent semi-annually?
A)8)56 percent
B)8)42 percent
C)8)46 percent
D)8)38 percent
Chapter 9: Protecting Your Wealth - Auto and Homeowners
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) According to statistics, the allocation of expenses incurred by homeowner's insurance companies for claims and settling claims represent
A)62 percent.
B)72 percent.
C)73 percent.
D)84 percent.
Q2) Since insurance is a regulated industry, the rates for automobile policies are relatively the same among different companies operating in a province.
A)True
B)False
Q3) Insurance should be considered even when there is a small likelihood than an event will cause a financial loss.
A)True
B)False
Q4) Umbrella personal liability policy is a supplement to
A)existing auto insurance policy.
B)existing homeowner's insurance policy.
C)existing auto and homeowner's insurance policy.
D)neither auto nor homeowner's insurance policy.
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Chapter 10: Protecting Your Wealth - Health and Life Insurance
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) What type of insurance is provided over a specified time period and does not build cash value?
A)Term
B)Whole life
C)Universal life
D)Variable life
Q2) What would be the importance of a guaranteed renewability clause in your policy?
A)It will allow you to renew your insurance even if you have suffered a major health problem.
B)It will allow you to renew your policy at the same premium rate.
C)It will allow you to change the policy to a permanent policy at any time.
D)It will allow you to waive your premiums if your health problems have made you unable to work.
Q3) The federal government ensures that all provinces have exactly the same medical coverage.
A)True
B)False
Q4) What steps would you take to evaluate and choose health care insurance options?
Page 12
Q5) From the employer's perspective, describe the three advantages for group health insurance plans.
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Chapter 11: Personal Investing - Investing Fundamentals
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) Use of Financial Calculator TI BA II Plus required. You want to save $10 000 toward the down payment on a house in five years. If you can earn 8 percent (compounded monthly), approximately how much should you save each month to reach this short-term goal?
A)$142
B)$136
C)$167
D)$131
Q2) In the secondary market, stock prices are
A)determined by supply and demand.
B)stable.
C)easy to predict.
D)less expensive than on the primary market.
Q3) What would be the return on 200 shares of stock purchased on January 1, 2003, for $60 per share and sold on December 31, 2007, at $80 per share? Also assume that the company paid dividends of $2 per share over the year. The prices include all brokerage fees. Round to the nearest whole percent.
Q4) Explain how the principles of asset allocation and diversifying your investment portfolio can make you feel comfortable with your personal risk profile.
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Chapter 12: Personal Investing - Investing in Stocks
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130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/66865
Sample Questions
Q1) When you look at inventory turnover (cost of goods sold divided by average daily inventory), a high ratio means that a company is more efficient than those with lower ratios.
A)True
B)False
Q2) A market in which stock prices fully reflect all information that is available to investors is called
A)inefficient.
B)efficient.
C)overvalued.
D)factored.
Q3) Which two financial statements are used to assess profitability?
A)Cash flow and balance sheet
B)Income statement and cash flow
C)Income statement and balance sheet
D)Cash flow and owner's equity
Q4) The daily stock quotations found in most large newspapers will tell you the annual dividends paid per share of stock.
A)True
B)False
Page 14
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Chapter 13: Personal Investing - Investing in Bonds
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131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/66864
Sample Questions
Q1) The risk that the purchasing power of a bond investment will diminish is called inflation risk.
A)True
B)False
Q2) The maturity matching strategy involves selecting bonds that will generate payments to match future expenses.
A)True B)False
Q3) A bond with a coupon rate of 6.5 percent and trading at $960 will pay annual interest of $62.40.
A)True
B)False
Q4) If the bond market expects a 10 percent yield, and XYZ Ltd. pays coupon interest on its $1000 par value bond at 6 percent semi-annually, bondholders of XYZ Ltd. should receive the next interest payment of A)$30.
B)$60.
C)$100.
D)Insufficient information to answer this question
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Chapter 14: Personal Investing - Investing in Mutual Funds
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/66863
Sample Questions
Q1) The units of a segregated fund differ from the units of a mutual fund in that
A)a segregated fund does not report a NAV.
B)the units of the segregated fund are owned by the unit holder.
C)each unit is insured from the date of purchase.
D)the units of the segregated fund are owned by the insurance company.
Q2) Which of the following equity mutual funds invests in a range of medium sized companies?
A)Dividend
B)Sector
C)Mid-Cap
D)Index
Q3) Brokers are less likely to recommend a no-load fund to their clients.
A)True
B)False
Q4) The main difference between segregated funds and mutual funds is that
A)segregated funds are for sophisticated investors.
B)mutual funds offer a death benefit.
C)segregated funds trade on an exchange.
D)segregated funds offer a guarantee.
Q5) List five considerations or characteristics when purchasing a mutual fund.
Page 16
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Chapter 15: Retirement and Estate Planning - Retirement Planning
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135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/66862
Sample Questions
Q1) Old Age Security provides sufficient income to support the lifestyles of most individuals.
A)True
B)False
Q2) Which of the following is a tax-free benefit?
A)OAS
B)CPP
C)GIS
D)RRIF
Q3) Jerome has a defined-benefit plan that pays him a pension of two percent of his average last five years' earnings for each year he was employed by Plastis Co. His earnings are as follows: 2000, $65 000; 2001, $66 000; 2002, $60 000; 2003, $72 000; 2004, $75 000; 2005, $72 000; 2006, $71 000; 2007, $70 000; 2008 ,$74 000. What will be his annual pension benefit if he was with Plastis Co. for 12 years?
A)$16 224
B)$12 432
C)$17 376
D)$13 032
Q4) Name two sources of retirement plans available to the self-employed.
Page 17
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Chapter 16: Retirement and Estate Planning - Estate Planning
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117 Verified Questions
117 Flashcards
Source URL: https://quizplus.com/quiz/66861
Sample Questions
Q1) A legal document in which individuals specify their preferences in the event that they become mentally or physically disabled is called a
A)living trust.
B)living will.
C)power of attorney.
D)letter of wishes.
Q2) A holograph will needs to be in the handwriting of the testator.
A)True
B)False
Q3) The final tax return must be filed
A)immediately after the estate is settled.
B)by December 31 in the year of death.
C)in six months or before April 30 of the year following death, whichever is later.
D)as soon as the last asset is distributed.
Q4) Estate planning commonly involves trusts, gifts, and charitable contributions for the purpose of avoiding taxes.
A)True
B)False
Page 18
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Chapter 17: Synthesis of Financial Planning - Integrating the
Components of a Financial Plan
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116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/66860
Sample Questions
Q1) In deciding how much to contribute to your retirement, which of the following should you ignore?
A)Anticipated inheritances
B)Other financial goals
C)Liquidity needs
D)Current expenses
Q2) Which of the following cannot be protected by property and casualty insurance?
A)Your car
B)Your investments
C)Your home
D)Your furniture
Q3) If you do not have a financial plan, you will not likely be able to A)retire.
B)afford a vacation.
C)meet your goals.
D)get married.
Q4) Paying off loans rather than making additional investments is appropriate when the expected return is higher than the interest rates on loans.
A)True B)False
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