Question 1

A family with $100,000 in assets and $60,000 of liabilities would have a net worth of

Accepted Answer

A)  $20,000. 
B)  $40,000. 
C)  $60,000. 
D)  $100,000. 
E)  $160,000. 
A)  $20,000. 
B)  $40,000. 
C)  $60,000. 
D)  $100,000. 
E)  $160,000.

Question 2

Given the following information, calculate the savings ratio: Liabilities = $25,000
Liquid assets = $5,000
Monthly credit payments = $800
Monthly savings = $760
Net worth = $75,000
Current liabilities = $2,000
Take-home pay = $2,300
Gross income = $3,500
Monthly expenses = $2,050

Accepted Answer

A)  33.79% 
B)  3.06% 
C)  2.40% 
D)  34.78% 
E)  21.71% 
A)  33.79% 
B)  3.06% 
C)  2.40% 
D)  34.78% 
E)  21.71%

Question 3

In an organized system of financial records, investment records belong in a home file, home computer, or online.

Accepted Answer

A) True 
 B)False

Question 4

Money management refers to day-to-day financial activities necessary to manage current personal economic resources while working toward long-term financial security.

Accepted Answer

A) True 
 B)False

Question 5

Take-home pay is also called

Accepted Answer

A)  Monthly savings. 
B)  Discretionary income. 
C)  Net pay. 
D)  Gross income. 
E)  Deductions. 
A)  Monthly savings. 
B)  Discretionary income. 
C)  Net pay. 
D)  Gross income. 
E)  Deductions.

Question 6

Which of the following ratios shows the relationship between gross income and money saved?

Accepted Answer

A)  Debt ratio 
B)  Current ratio 
C)  Liquidity ratio 
D)  Debt payments ratio 
E)  Savings ratio 
A)  Debt ratio 
B)  Current ratio 
C)  Liquidity ratio 
D)  Debt payments ratio 
E)  Savings ratio

Question 7

All of the following are fixed expenses except a(n)

Accepted Answer

A)  Mortgage or rent payment. 
B)  Installment loan payment. 
C)  Monthly train ticket for commuting to work. 
D)  Monthly allocation for life insurance. 
E)  Utilities. 
A)  Mortgage or rent payment. 
B)  Installment loan payment. 
C)  Monthly train ticket for commuting to work. 
D)  Monthly allocation for life insurance. 
E)  Utilities.

Question 8

When creating a budget, it is important to

Accepted Answer

A)  Save the amount you have left at the end of the month. 
B)  Set aside savings after your variable expenses are paid. 
C)  Save an amount no more than 3% of your annual income in an emergency fund. 
D)  Spend the amount of money you have budgeted in each category. 
E)  "Pay yourself first" by setting aside savings before other expenses are budgeted. 
A)  Save the amount you have left at the end of the month. 
B)  Set aside savings after your variable expenses are paid. 
C)  Save an amount no more than 3% of your annual income in an emergency fund. 
D)  Spend the amount of money you have budgeted in each category. 
E)  "Pay yourself first" by setting aside savings before other expenses are budgeted.

Question 9

Which of the following is most correct?

Accepted Answer

A)  Rare coins and stamps belong in a safe deposit box. 
B)  A marriage certificate should be kept in a home file. 
C)  W-2s for tax records belong in a safe deposit box. 
D)  A current budget belongs in your safe deposit box. 
E)  Adoption papers belong in a home file. 
A)  Rare coins and stamps belong in a safe deposit box. 
B)  A marriage certificate should be kept in a home file. 
C)  W-2s for tax records belong in a safe deposit box. 
D)  A current budget belongs in your safe deposit box. 
E)  Adoption papers belong in a home file.

Question 10

When creating a budget, which of the following statements is true?

Accepted Answer

A)  Include in income the bonuses and gifts you expect to receive. 
B)  It is easier to create a budget if your earnings vary by season. 
C)  Common financial problems can be maximized through budgeting. 
D)  Numbers in the budget are estimates. 
E)  It is better to overestimate your income for next year. 
A)  Include in income the bonuses and gifts you expect to receive. 
B)  It is easier to create a budget if your earnings vary by season. 
C)  Common financial problems can be maximized through budgeting. 
D)  Numbers in the budget are estimates. 
E)  It is better to overestimate your income for next year.

Question 11

When creating a personal balance sheet, which of the following is a real estate asset?

Accepted Answer

A)  Cash value of life insurance 
B)  Vacation property 
C)  Possessions in your home 
D)  Investments for financing children's education 
E)  Retirement accounts 
A)  Cash value of life insurance 
B)  Vacation property 
C)  Possessions in your home 
D)  Investments for financing children's education 
E)  Retirement accounts

Question 12

Financial experts recommend monthly savings of ____ of gross income.

Accepted Answer

A)  0% 
B)  5-10% 
C)  20% 
D)  25-35% 
E)  50% 
A)  0% 
B)  5-10% 
C)  20% 
D)  25-35% 
E)  50%

Question 13

Which of the following situations describes a person who could be insolvent?

Accepted Answer

A)  Assets $56,000; annual expenses $60,000 
B)  Assets $78,000; net worth $22,000 
C)  Liabilities $45,000; net worth $6,000 
D)  Assets $40,000; liabilities $55,000 
E)  Annual cash inflows $45,000; liabilities $50,000 
A)  Assets $56,000; annual expenses $60,000 
B)  Assets $78,000; net worth $22,000 
C)  Liabilities $45,000; net worth $6,000 
D)  Assets $40,000; liabilities $55,000 
E)  Annual cash inflows $45,000; liabilities $50,000

Question 14

Financial advisers suggest that an emergency fund should cover one to two months of living expenses.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are sources of income except

Accepted Answer

A)  Interest earned on savings 
B)  Commissions 
C)  Dividends 
D)  Salary 
E)  Social Security taxes 
A)  Interest earned on savings 
B)  Commissions 
C)  Dividends 
D)  Salary 
E)  Social Security taxes

Question 16

If a household has $195,000 of assets and $75,000 of liabilities, then their net worth would be $125,000.

Accepted Answer

A) True 
 B)False

Question 17

How long should you keep your most current will?

Accepted Answer

A)  No need to keep it since your lawyer probably has a photocopy. 
B)  One year. 
C)  Three years. 
D)  Seven years. 
E)  Permanently. 
A)  No need to keep it since your lawyer probably has a photocopy. 
B)  One year. 
C)  Three years. 
D)  Seven years. 
E)  Permanently.

Question 18

The equation to calculate net worth is

Accepted Answer

A)  Assets - Cash outflows = Net worth. 
B)  Cash inflows - Liabilities = Net worth. 
C)  Cash inflows - Cash outflows = Net worth. 
D)  Assets - Liabilities = Net worth. 
E)  Cash inflows + Liabilities = Net worth. 
A)  Assets - Cash outflows = Net worth. 
B)  Cash inflows - Liabilities = Net worth. 
C)  Cash inflows - Cash outflows = Net worth. 
D)  Assets - Liabilities = Net worth. 
E)  Cash inflows + Liabilities = Net worth.

Question 19

Money management refers to

Accepted Answer

A)  Preparing personal financial statements. 
B)  Day-to-day financial activities. 
C)  Trade-offs that occur with financial decisions. 
D)  Storing financial records for easy access. 
E)  Spending money on current living expenses. 
A)  Preparing personal financial statements. 
B)  Day-to-day financial activities. 
C)  Trade-offs that occur with financial decisions. 
D)  Storing financial records for easy access. 
E)  Spending money on current living expenses.

Question 20

After having established a spending plan, it is important to

Accepted Answer

A)  File the budget in a safe deposit box. 
B)  Compare it to the previous budget. 
C)  Keep track of your actual income and expenses. 
D)  Pay attention only to expenses that are more than 10 percent of your salary. 
E)  None of these are true since budgets are just estimates. 
A)  File the budget in a safe deposit box. 
B)  Compare it to the previous budget. 
C)  Keep track of your actual income and expenses. 
D)  Pay attention only to expenses that are more than 10 percent of your salary. 
E)  None of these are true since budgets are just estimates.

A family with $100,000 in assets and $60,000 of liabilities would have a net worth of

Given the following information, calculate the savings ratio: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Current liabilities = $2,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050

In an organized system of financial records, investment records belong in a home file, home computer, or online.

Money management refers to day-to-day financial activities necessary to manage current personal economic resources while working toward long-term financial security.

Take-home pay is also called

Which of the following ratios shows the relationship between gross income and money saved?

All of the following are fixed expenses except a(n)

When creating a budget, it is important to

Which of the following is most correct?

When creating a budget, which of the following statements is true?

When creating a personal balance sheet, which of the following is a real estate asset?

Financial experts recommend monthly savings of ____ of gross income.

Which of the following situations describes a person who could be insolvent?

Financial advisers suggest that an emergency fund should cover one to two months of living expenses.

All of the following are sources of income except

If a household has $195,000 of assets and $75,000 of liabilities, then their net worth would be $125,000.

How long should you keep your most current will?

The equation to calculate net worth is

Money management refers to

After having established a spending plan, it is important to

Personal Financial Planning in Action

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 2: Money Management Skills

A family with $100,000 in assets and $60,000 of liabilities would have a net worth of

Given the following information, calculate the savings ratio: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Current liabilities = $2,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050

In an organized system of financial records, investment records belong in a home file, home computer, or online.

Money management refers to day-to-day financial activities necessary to manage current personal economic resources while working toward long-term financial security.

Take-home pay is also called

Which of the following ratios shows the relationship between gross income and money saved?

All of the following are fixed expenses except a(n)

When creating a budget, it is important to

Which of the following is most correct?

When creating a budget, which of the following statements is true?

When creating a personal balance sheet, which of the following is a real estate asset?

Financial experts recommend monthly savings of ____ of gross income.

Which of the following situations describes a person who could be insolvent?

Financial advisers suggest that an emergency fund should cover one to two months of living expenses.

All of the following are sources of income except

If a household has $195,000 of assets and $75,000 of liabilities, then their net worth would be $125,000.

How long should you keep your most current will?

The equation to calculate net worth is

Money management refers to

After having established a spending plan, it is important to

Personal Financial Planning in Action

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters