Consumer Math-Midterm Prep-Chapters 1-4

Question 1

Net worth is the figure used to track an individual's overall wealth.

Accepted Answer

True

Question 2

For most U.S. consumers, the biggest expense is ________.

Accepted Answer

housing

Question 3

Financial goals that will take from one to five years to accomplish should be categorized as ________ goals.

Accepted Answer

intermediate-term

Question 4

Buildings and land that an individual owns are examples of ________.

Accepted Answer

real estate

Question 5

In the SMART method of setting goals, which portion of the SMART acronym shows the importance of identifying the goal.

Accepted Answer

Specific

Question 6

A potential employer may check your credit history before offering you a job.

Accepted Answer

True

Question 7

Your budget should help you anticipate future cash shortfalls.

Accepted Answer

True

Question 8

Money spent on a vacation or a birthday is an example of a(n) ________ expense that will not show up in a typical month'

Accepted Answer

expected but irregular

Question 9

After keeping track of his income and expenses for two months, Ellis made predictions about his monthly cash inflows and

Accepted Answer

forecast

Question 10

________ are anything we own, such as a car or a home.

Accepted Answer

Assets

Question 11

Cash outflow refers to money that an individual spends.

Accepted Answer

True

Question 12

For U.S. consumers under 25 years of age, which of the following is the smallest annual expense?

Accepted Answer

Health Care

Question 13

The defining characteristic of a liquid asset is its ________.

Accepted Answer

quick availability

Question 14

A financial plan is like a road map in that it helps you see how to get to the future you want for yourself.

Accepted Answer

True

Question 15

Your budget should account for expected but irregular expenses, such as vacations and birthdays.

Accepted Answer

True

Question 16

In a budget, money you receive from a scholarship would be calculated as part of your income.

Accepted Answer

True

Question 17

Cash inflow refers to money received from income but not other sources.

Accepted Answer

False

Question 18

Which of the following is NOT a typical asset listed on a personal balance sheet?

Accepted Answer

Cash inflows

Question 19

Planning your spending, borrowing, and saving are all aspects of ________.

Accepted Answer

financial management

Question 20

Payment schedules for most long-term loans involve ________ payments.

Accepted Answer

monthly

Question 21

A good budget will force you to ________ to take advantage of unexpected opportunities.

Accepted Answer

set aside money

Question 22

Which of the following is the best example of a long-term goal?

Accepted Answer

Saving enough to fully pay for your children's college educations

Question 23

Why do people invest money?

Accepted Answer

To make more money

Question 24

What does the opportunity cost of a purchase tell you?

Accepted Answer

The cost of the purchase plus the cost of not doing or purchasing something

Question 25

Which of the following is the best description of a financial plan?

Accepted Answer

A good financial plan is like a blueprint for a builder.

Question 26

The most effective and easy-to-follow budgets do not vary from month to month.

Accepted Answer

False

Question 27

Which of the following is NOT a part of personal financial planning?

Accepted Answer

time management

Question 28

Which of the following questions would you be most likely to ask when creating a plan for investing?

Accepted Answer

How much risk can I tolerate?

Question 29

A cash flow statement is a forecast of future cash inflows and outflows.

Accepted Answer

False

Question 30

Market value refers to what something would be worth if you ________.

Accepted Answer

sold it today

Question 31

Which of the following provides the most accurate definition of personal finance?

Accepted Answer

All of the financial issues that can affect an individual

Question 32

Before you can effectively make plans for your financial future, you need to ________.

Accepted Answer

evaluate your current financial position

Question 33

Only a small percentage of Americans working full-time live paycheck to paycheck.

Accepted Answer

False

Question 34

Stocks, bonds, mutual funds, and real estate are all common types of ________.

Accepted Answer

investments

Question 35

Calculating the opportunity cost of a purchase is a good way to consider the ________ of the purchase.

Accepted Answer

pros and cons

Question 36

Which of the following is most important to creating a successful financial plan?

Accepted Answer

Establishing clear goals

Question 37

Which of the following is an example of a liquid asset?

Accepted Answer

Your checking and savings accounts

Question 38

The purpose of insurance is to ________ your assets.

Accepted Answer

Protect

Question 39

Financial goals that you plan to accomplish within the next year should be categorized as ________ goals.

Accepted Answer

short-term

Question 40

Having a(n) ________ is the major means by which an individual saves money, builds wealth, and acquires assets.

Accepted Answer

Income

Consumer Math-Midterm Prep-Chapters 1-4

Questions 40

Consumer Math-Midterm Prep-Chapters 1-4

Questions 40