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Personal Finance Chapter 1 Flashcards | StudBud
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Personal Finance Chapter 1
Personal Finance Chapter 1
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Keywords and concepts for chapter 1 Personal Financial Literacy
Flashcards
55 cards
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Questions
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Answers
1
Which of the following is and example of a liquid asset?
your credit card
the paycheck that you will receive in two weeks
your checking and savings accounts
your leased car
2
Adults with which of the following levels of education make the highest annual income?
associate's degree
bachelor's degree
master's degree
high school diploma
3
What is Personal Financial Planning?
all of the financial issues involved in saving money
the financial issues involved in spending within a budget
all of the financial issues that can affect an individual
all of the financial issues involved in borrowing money
4
It is impossible to plan for an unexpected loss in wages
True
False
5
Which of the following is NOT a financial goal?
making charitable donations
enjoying your career
retiring at an early age
establishing an emergency fund
6
buying an MP3 player
long-term goal
short-term goal
medium-term goal
7
Knowledge of personal finance can help you define your goals.
True
False
8
When is the best time to start saving for long-term financial goals?
when you have a family of your own
when you are young and have fewer financial obligations
when you are in your forties and earning more money
after you have finished college
9
After inheriting a large sum of money, Aurora needs help completing and filing out her taxes.
the Internet
a financial advisor
10
The Internet can be a valuable source of information to use in personal financial planning.
True
False
11
Part of financial planning is thinking about and planning for unexpected expenses.
False
True
12
Because of the dangers posed by the Internet, you should ________ for financial planning.
cautiously use it
never use it
freely use it
rarely use it
13
You should be careful about evaluating financial planning advice from Web sites that
provide tips from a CFP
are trying to sell you a service
provide links to financial calculators
display employees' credentials
14
In general, the more education you have, the ________ your ________.
lower; debt
lower; salary
higher; debt
higher; salary
15
A financial advisor's area of expertise should ________.
be broad
match your needs
be narrow
be independent
16
Saving for a down payment is most closely associated with which of the following long term goal
going to college
buying a house
giving to charities
retiring early
17
The purpose of insurance is to ________ your assets.
protect
expand
manage
finance
18
buying an outfit for prom
short-term goal
long-term goal
medium-term goal
19
The best time to start investing money to reach your financial goals is ________.
in your thirties
in your twenties
in your forties
now
20
The ______ you begin saving , the _______money you have to set aside on a regular basis.
earlier; more unpredictable the amount of
earlier; less
later; more unpredictable the amount of
earlier; more
21
Attending Community College
short-term goal
long-term goal
medium-term goal
22
Financial planning can affect the age at which you retire.
False
True
23
Good financial decision-makers all use the same thought process to make plans.
True
False
24
If you make and follow a good financial plan, you are likely to have more financial flexibility
False
True
25
Calculating the opportunity cost of a purchase is a good way to consider the __of the purchase.
location
long-term effects
popularity
pros and cons
26
Good financial decision-makers use the same basic tools to plan for their Personal Finance.
True
False
27
If you have an understanding of personal financial planning you don't need a financial advisor.
True
False
28
You should be more concerned with short-term financial goals than long-term financial goals
False
True
29
What does the opportunity cost of a purchase tell you?
purchase plus the interest paid on credit for the purchase
the cost of the purchase plus the cost of sales tax
purchase plus cost of not doing or purchasing something else
30
Owen wants to use a payment calculator to find out what range of car loans he can afford.
the Internet
a financial advisor
31
Planning your spending, borrowing, and saving are all aspects of
asset management
financial advising
personal financial planning
credit management
32
In comparison to other long-term financial goals, raising a child is relatively inexpensive.
True
False
33
Ellie wants to monitor the performance of a stock that she just purchased.
a financial advisor
the Internet
34
Only a small percentage of Americans working full-time live paycheck to paycheck.
True
False
35
CPA stands for ________.
Certified Professional Accountant
Communication Professionals Association
Certified Public Accountant
Community of Professional Accountants
36
At this stage of your life, it is ________ to think about your retirement.
beneficial
absolutely necessary
unnecessary
too difficult
37
Which of the following is a long-term financial goal?
buying a house
buying a cell phone
taking a vacation
creating an emergency fund
38
buying a home
long-term goal
short-term goal
medium-term goal
39
Which of the following is NOT an important question to ask when selecting a financial advisor?
Does the advisor have a relevant certification?
Does the advisor have personal plans to retire early?
Do I feel comfortable with the advisor?
Can the advisor provide references from satisfied customers?
40
Purchase made on a credit card
Liquid Assest
Debt
41
Planning for retirement
medium-term goal
long-term goal
short-term goal
42
A savings account that earns interest
Liquid Asset
Debt
43
Every time you decide to purchase something, you incur an opportunity cost.
False
True
44
A potential employer may check your credit history before offering you a job.
False
True
45
Buying a used car
medium-term goal
short-term goal
long-term goal
46
Entrepreneurs do not need financial planning to be successful.
False
True
47
A rainy day fund is money set aside for ________.
unexpected emergencies
long-term goals
charitable giving
short-term goals
48
Mortage
Liquid Asset
Debt
49
Financial planning is important no matter what type of education you plan to pursue.
True
False
50
Different levels of education have both financial and time costs that you should consider.
False
True
51
Financial information found on the Internet is always reliable.
True
False
52
Understanding the opportunity costs of your purchases will likely help you think about changing
spending habits
retirement plans
educational plans
study habits
53
Investment in the stock market
Debt
Liquid Asset
54
A financial advisor will likely have a better understanding of ________ than you do.
people skills
goal-setting
tax laws
dangers posed by the Internet
55
Bankruptcy is when you can't pay your debts and a(n) _____ takes over some of your finances.
bank
court
investor
financial advisor
