Personal Financial Planning Final
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Personal Financial Planning Final for Spring Semester 2012. High School Course.
- 1.Which of the following would be considered a variable cost in owning a vehicle?
- A.
Interest on your car loan
- B.
Insurance for your car
- C.
Paying the state registration fee and license fee
- D.
Oil Changes and Tire Rotations
- 2.What is the term that is used to describe the declining value of a new car once you drive it off of the car lot?
- A.
Depreciation
- B.
Appreciation
- C.
Variable Costs
- D.
Unique Costs
- 3.What percentage should you never borrow more than of your yearly net income? In other words, what percentage should you never rise above in order to buy something?
- A.
50% of your yearly net income
- B.
20% of your yearly net income
- C.
70% of your yearly net income
- D.
5% of your yearly net income
- 4.What does A.P.R. stand for in terms of financing?
- A.
Annual Percentage Rate
- B.
Annual Partnership Reduction
- C.
Auxiliary Payments Retention
- D.
Annual Participatory Rate
- 5.What is the best explanation of an as-is warranty?
- A.
Represents no warranty on your car
- B.
Is a dealer warranty
- C.
Is considered one of the safest warranty's with regards to cars
- 6.What does comprehensive insurance cover when buying car insurance?
- A.
Pays for damage caused by vandalism, hailstorms, floods, theft
- B.
Pays for damage when you hit another person's car
- C.
Pays for nothing
- D.
Pays for speeding tickets
- 7.Which of the following does not determine your car insurance rates?
- A.
Marital Status
- B.
Geographic Location
- C.
Vehicle Characteristics
- D.
Driving Record
- E.
None of the Above
- 8.Which governmental entity is in charge of handling and processing your income taxes?
- A.
Department of Homeland Security
- B.
Internal Revenue Service
- C.
Wall Street Banks
- D.
Department of Health and Human Sciences
- 9.What is a property tax?
- A.
A tax on something you own such as a home or boat
- B.
An income tax meant to boost sales taxes
- C.
A federal government tax
- 10.What tax is also known as the "death tax" and is placed on wills of $2,000,000 and higher?
- A.
Proportional Income Tax
- B.
Regressive Income Tax
- C.
Sales Tax
- D.
Estate Tax
- 11.What type of income tax system is used in the United States of America today?
- A.
Regressive Tax System
- B.
Progressive Tax System
- C.
Proportional Tax System
- 12.A proportional tax system is also known as a "flat tax system."
- A.
True
- B.
False
- 13.What is the name of the tax that you will pay if you win the PowerBall or Mega Millions?
- A.
Sales Tax
- B.
Supranational Tax
- C.
Annotated Tax
- D.
Gift Tax
- 14.Which of the following states impose no income taxes on their citizens?
- A.
Nevada
- B.
California
- C.
Maine
- D.
Washington D.C.
- 15.Which of the following taxes is responsible for funding local schools in the state of Colorado?
- A.
Sales Taxes
- B.
Regressive Income Taxes
- C.
Progressive Income Taxes
- D.
Property Taxes
- 16.Which of the following best represents a discretionary expense?
- A.
Mortgage Payments
- B.
Rent Payments
- C.
Going to the Movies
- D.
Buying Food
- 17.A fixed expenditure is something that cannot be changed assuming there are no other economic options.
- A.
True
- B.
False
- 18.What is the name of the bank that is considered the central bank of the United States of America?
- A.
Bank of New York
- B.
Treasury Department
- C.
The Federal Reserve Bank
- D.
All private banks are considered one bank
- 19.Which district bank do we in Colorado report to according to the Federal Reserve system of banks?
- A.
San Francisco Branch
- B.
Atlanta Branch
- C.
Kansas City Branch
- D.
New York Branch
- 20.Who is the current head of the Federal Reserve Bank?
- A.
Alan Greenspan
- B.
Timothy Geithner
- C.
President Barack Obama
- D.
Ben Bernanke
- 21.What is the major function of the Federal Reserve Banks?
- A.
Controlling the Money Supply
- B.
Outlining the Risk of the American Banking System
- C.
Advising the American Public
- D.
Investing in the Housing Market
- 22.What is it called when a bank has to hold a specific amount in their vault as mandated by the Federal Reserve?
- A.
Required Reserves
- B.
Federal Depositor
- C.
Excess Reserves
- D.
Banking Reserves
- 23.Which of the following is a type of checking account?
- A.
Demand Deposits
- B.
Regular Checking
- C.
Special Checking
- D.
Lifeline Banking
- E.
All of the Above are types of checking accounts
- 24.A checking account Allows transfer of deposited funds to merchants and service providers, as well as to accounts at other financial institutions
- A.
True
- B.
False
- 25.What is a C.D.?
- A.
Certificate of Deposit
- B.
Center of Deposit
- C.
Consumer Deposit
- D.
Credit Draft
- 26.Suppose you own twenty shares of Coca Cola stock. You bought the stock one year ago at a price of $50.00 and sold it today with the stock price being $90.00. How much money do you pocket from selling the shares?
- A.
$100
- B.
$400
- C.
$800
- D.
$1500
- 27.What is overdraft protection used for with regards to checking accounts?
- A.
Used to protect against having insufficient funds in your account
- B.
Used to serve as a savings account
- C.
Used to buy C.D.'s
- D.
Used to purchase stock options
- 28.What is a stock dividend?
- A.
A payout for investors in the form of stock not cash
- B.
A payout for investors in the form of cash not stock
- C.
A penalty for making money on some stocks
- 29.What is considered as a low-risk low-cost investment?
- A.
Buying United States treasury bonds
- B.
Purchasing IPO stock in Facebook
- C.
High income bonds
- D.
Purchasing real estate
- 30.Which investment is the riskiest?
- A.
Buying United States Treasury Government Bonds
- B.
Options Trading
- C.
Credit Swaps
- D.
Buying C.D.'s
- 31.What is consumer credit?
- A.
Taking a short-term loan and paying for purchases at a later date
- B.
Borrowing money for an extended period of time
- C.
Using savings account dollars
- D.
Purchasing a C.D.
- 32.Which of the following is an example of open-end credit?
- A.
Using an automobile loans
- B.
Using a mortgage loan
- C.
Using your Visa card to pay for food
- 33.Which company will be facing an I.P.O this upcoming spring?
- A.
Google
- B.
MySpace
- C.
AT&T
- D.
Facebook
- 34.What does the GDP measure?
- A.
The value of all expenditures by the United States Government
- B.
The value of all goods and services produced by workers in the US
- C.
The value of all goods and services produced by the government and United States workers
- D.
The net value of all goods in the world
- 35.What does the acronym CPI pertain to in terms of personal finance?
- A.
Consumer Price Index
- B.
Customers Pricing Individually
- C.
Consumer Producers Index
- D.
Controlling Production Independence
- 36.What is a credit limit?
- A.
A determined set amount of money on a credit card
- B.
An overdraft protection number on your checking account
- C.
A type of personal investment strategy
- D.
A limited amount of personal net worth
- 37.What is the one of the most popular forms of credit?
- A.
Debit Cards
- B.
Credit Cards
- C.
Cash Money
- D.
Checking Accounts
- 38.Long-term financial goals should last over five years.
- A.
True
- B.
False
- 39.What does I.P.O stand for in terms of financial public offerings in the stock market?
- A.
Initial Public Offering
- B.
Imagining Peaceful Offerings
- C.
Investment Public Offering
- D.
Institution Promises Olives
- 40.How often should you review and revise your personal financial plans?
- A.
Once a decade
- B.
Once in high school, college, and prior to having a child
- C.
Once a year
- D.
Once a year or when significant events occur
- 41.What is financial literacy?
- A.
The ability to balance a check book
- B.
The ability to accurately gauge A.P.R
- C.
Understanding the rules of credit
- 42.Which bank is in charge of adjusting the interest rates that banks use to influence their interest rates?
- A.
The Federal Reserve Bank
- B.
Each Individual Bank
- C.
The President
- D.
None of the above
- 43.All of the following are reasons for using credit: convenience, identification, emergencies, and consolidating debt
- A.
True
- B.
False
- 44.What is one disadvantage of credit?
- A.
Purchases are more expensive
- B.
A temptation to overspend exists
- C.
Ties up future income
- D.
Possible financial difficulties
- E.
All of the above are disadvantages
- 45.Microeconomics is best described as...
- A.
The branch of economics that deals with human behavior and choices
- B.
The branch of economics that deals with big picture thinking
- C.
The branch of economics that specifies what businesses should buy
- 46.Which of the following is the best example of opportunity cost?
- A.
Studying for a test and getting the answers correct on the test
- B.
Moving to Denver for a new job
- 47.S.O.L is an abbreviation for what.
- A.
Standard of Living
- B.
Standard of Losing
- C.
Standard of Limitations
- D.
Standard of Limited Liabilities
- 48.What is a preference?
- A.
A service business first sale of the year
- 49.What is the major goal of economics?
- A.
To make businesses more money
- B.
To make additional financial compensation for government
- C.
To make people better-off through the use of choices
- 50.The United States utilizes a free enterprise economy.
- A.
True
- B.
False
- 51.If total revenue was $100.00 If total cost was $35.00 Your total profit is $65.00
- A.
True
- B.
False
- 52.What is the best explanation of an asset?
- A.
Anything of value that you/company/government owns
- B.
Anything that creates income
- C.
Anything that is owned
- D.
Anything that can be converted into money
- 53.What is a tangible asset?
- A.
Asset that maintains a physical existence in form
- B.
Asset that does not have a physical form
- C.
Asset that cannot be computed in the accounting equation
- D.
Asset that fails to materialize
- 54.Macroeconomics is considered big picture economic thinking specializing in things like GDP, National Debt
- A.
True
- B.
False
- 55.What is an example of cash outflow?
- A.
Loan Repayments
- B.
Interests on Savings
- C.
Buying dishwasher detergent
- D.
Providing free stock to consumer
- 56.What is an account?
- A.
Record summarizing all information pertaining to the account equation
- B.
Multitude of records dating across numerous balances
- 57.Which of the following is a tangible good?
- A.
Accounting Service
- B.
Car Repair Shop
- C.
Accounting Textbook
- D.
Advice for a fried
- 58.A "free" checking account with minimum balance of $500 has an opportunity cost of lost interest.
- A.
True
- B.
False
- 59.ATM fees are about the same in different geographic areas. For example, the fees in Gypsum are the same as they are in Rome, Italy
- A.
True
- B.
False
- 60.Using a debit card is basically the same as writing a check
- A.
True
- B.
False
- 61.When interest rates are rising, a person would be best served by:
- A.
Short-Term Savings Instruments
- B.
Long-Term Savings Instruments
- C.
Short-Term Loans
- D.
Variable-Rate Loans
- 62.To avoid high fees for loans, a person should not borrow from a:
- A.
Credit Union
- B.
Savings and Loan Association
- C.
Mutual Savings Bank
- D.
Savings and Loan Association
- E.
Commercial Bank
- 63.Credit is an arrangement to receive cash, goods, or services now and pay for them in the future
- A.
True
- B.
False
- 64.College students are not a prime target for using credit
- A.
True
- B.
False
- 65.You should sign your new credit cards as soon as they arrive.
- A.
True
- B.
False
- 66.Department stores and gasoline companies are good places to obtain your first credit card.
- A.
True
- B.
False
- 67.Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.
- A.
Ten Percent
- B.
Twenty Percent
- C.
Thirty Percent
- D.
Forty Percent
- 68.When you cosign a loan, you are being asked to guarantee this debt.
- A.
True
- B.
False
- 69.The debit card:
- A.
Debits your account at the moment you buy goods and services
- B.
Credits your account at the moment you buys goods and services
- C.
Is a new type of a credit card issued by Visa International
- D.
Is really like a travel and entertainment card
- 70.Household size is a major influence on personal financial planning decisions.
- A.
True
- B.
False
- 71.Analyzing your current financial position is a part of the final stage of the financial planning process.
- A.
True
- B.
False
- 72.Opportunity costs refer to what a person gives up when making a decision.
- A.
True
- B.
False
- 73.The ability to convert financial resources into usable cash with ease is referred to as:
- A.
Bankruptcy
- B.
Liquidity
- C.
Investing
- D.
Saving
- 74.A budget is a record of how a person or family has spent their money.
- A.
True
- B.
False
- 75.Furniture, jewelery and an automobile are examples of liquid assets.
- A.
True
- B.
False
- 76.Current liabilities are amounts that must be paid within a short period of time, usually less than a year.
- A.
True
- B.
False
- 77.If budgeted spending is less than actual spending, this is referred to as a deficit.
- A.
True
- B.
False
- 78.Which of the following payments would be considered a variable expense?
- A.
Rent
- B.
An installment loan payment
- C.
A mortgage payment
- D.
A monthly parking fee
- E.
A telephone bill
- 79.The payment items that should be budgeted first are:
- A.
Variable Expenses
- B.
Investment Funds
- C.
Fixed Expenses
- D.
Unplanned Living Expenses
- 80.Taxes are only considered in financial planning activities in the month of April.
- A.
True
- B.
False
- 81.An estate tax is imposed on the value of an individual's property at the time of his or her death.
- A.
True
- B.
False
- 82.Capital Gains taxes refer to profits from the sale of investments
- A.
True
- B.
False
- 83.Exemptions are allowed by the Internal Revenue Service (I.R.S)
- A.
True
- B.
False
- 84.The main purpose of taxes is to:
- A.
Generate revenue for funding government programs
- B.
Reduce the chances of inflation
- C.
Create Jobs
- D.
Discourage use of certain goods and services
- 85.Most cars bought from private parties have:
- A.
No Implied Warranties
- B.
A 30-Day Return Privilege
- C.
A Limited Warranty
- D.
No Express Warranty is Made between the parties
- 86.Renting is more advantageous than buying a home for:
- A.
Lower Short-Term Living Costs
- B.
Financial Benefits
- C.
Long-Term Investment Purposes
- D.
Receiving Tax Benefits
- 87.A limited warranty covers all aspects of the product and does not require the buyer to incur any of the costs for shipping and repairs
- A.
True
- B.
False
- 88.Ease of mobility is an advantage of renting
- A.
True
- B.
False
- 89.Current interest rates can affect the price of a home.
- A.
True
- B.
False
- 90.The main financial benefit of renting is:
- A.
Tax Deductions
- B.
Increased Equity
- C.
Investment Value Growth
- D.
Lower Initial Costs
- 91.Collision coverage pays for damage to your vehicle for such hazards as fire, theft, or wind damage.
- A.
True
- B.
False
- 92.Property damage liability coverage would pay for damage to another vehicle for which you were at fault.
- A.
True
- B.
False
- 93.Your car insurance policy has a $250 deductible. If a small collision causes $600 damage to your car, what amount of the claim would the insurance company pay?
- A.
$250
- B.
$350
- C.
$450
- D.
$600
- 94.Comprehensive coverage would cover financial losses due to:
- A.
Injuries caused by a driver without insurance
- B.
Damage to your car in an accident for which you were at fault
- C.
Damage to your car are caused by wind or hail
- D.
Legal action against you for an accident
- 95.Which of the following would be an example of the driver classification category that determines insurance rates?
- A.
John Brown has a 2005 Mazda Miata Convertible
- B.
Harry Anderson lives in Boca Raton, Florida
- C.
Charlie Purciful is 17 years old
- D.
Charlotte Webb has her vehicle in a locked garage
- 96.Public opinion polls consistently show that Americans are happy with the nation's healthc care system
- A.
True
- B.
False
- 97.A home made of wood is more expensive to insure than a home made of brick
- A.
True
- B.
False
- 98.You probably have little or no need for life insurance if you are:
- A.
A single person living alone or with your parents
- B.
Married and your spouse works
- C.
Gainfully employed
- D.
Divorced and have two children
- 99.Who has the greatest need for life insurannce?
- A.
Households with Small Children
- B.
A Dual income couple
- C.
Singles living with parents
- D.
Singles Living Alone
- 100.Who has the greatest need for life insurannce?
- A.
Households with Small Children
- B.
A Dual income couple
- C.
Singles living with parents
- D.
Singles Living Alone
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