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  1. Personal Finance Final Exam
  2. ------------------------------------------------------
  3.  
  4. Question 1: The ability to prepare a spreadsheet is an example of a soft skill.
  5. Answer: F
  6. Question 2: Statistics show that the amount and type of education you complete does not significantly affect the amount of money you earn.
  7. Answer: F
  8. Question 3: When demand for a product exceeds its supply, businesses will begin charging lower prices for the product.
  9. Answer: F
  10. Question 4: The United States has a market economy, which is based on the laws of supply and demand.
  11. Answer: T
  12. Question 5: The decline (recession) stage of the business cycle represents the lowest point on the business cycle graph.
  13. Answer: F
  14. Question 6: If you cannot answer a question on a job application or if it isn’t applicable, it is acceptable to write “N/A” on the answer blank.
  15. Answer: T
  16. Question 7: Tips given to a person for performing a service are not subject to federal income taxes.
  17. Answer: F
  18. Question 8: Workers are taxed on most of the benefits they receive from employers.
  19. Answer: F
  20. Question 9: Interest and dividends are forms of earned income that are taxable.
  21. Answer: F
  22. Question 10: Gambling winnings are subject to income tax but not social security tax.
  23. Answer: T
  24. Question 11: Consumers are said to be economizing when they are seeking to get the highest value for the money spent.
  25. Answer: F
  26. Question 12: Economists believe there is no direct relationship between inflation and employment.
  27. Answer: F
  28. Question 13: Bait and switch is considered an unethical sales technique, but it is not illegal.
  29. Answer: F
  30. Question 14: Higher productivity lowers the cost of each unit produced.
  31. Answer: T
  32. Question 15: Having a company representative give out free samples in a store is an example of direct advertising.
  33. Answer: T
  34. Question 16: Although people’s financial resources are limited, their wants and needs are unlimited and growing.
  35. Answer: T
  36. Question 17: If you spend less money on an item than you planned to spend, this is an unfavorable variance in your budget analysis.
  37. Answer: F
  38. Question 18: Financial goals should be set before personal goals, because your personal goals will be dependent on them.
  39. Answer: F
  40. Question 19: Because most people do not have enough resources to meet all their needs and wants, they must make choices.
  41. Answer: T
  42. Question 20: With a full endorsement, anyone who finds the endorsed check can cash it.
  43. Answer: F
  44. Question 21: A CD is a great savings option if you want to have immediate access to the money.
  45. Answer: F
  46. Question 22: Debit cards carry all the same protections provided with credit cards.
  47. Answer: F
  48. Question 23: Medicaid is a government-sponsored health insurance program for senior citizens.
  49. Answer: F
  50. Question 24: The beneficiary is the person covered by a life insurance policy.
  51. Answer: F
  52. Question 25: An umbrella policy is so named because it provides liability coverage above that of your homeowner’s and car insurance.
  53. Answer: T
  54. Question 26: Insurance providers are not allowed to charge higher or lower premiums based on marital status.
  55. Answer: F
  56. Question 27: A buying plan focuses only on items that you can afford to buy now.
  57. Answer: F
  58. Question 28: Service credit is often provided by utility companies and doctors.
  59. Answer: T
  60. Question 29: Finance charges increase the cost of items purchased by a credit card.
  61. Answer: T
  62. Question 30: No interest is charged on the unused portion of a line of credit.
  63. Answer: T
  64. Question 31: Long-term debt is a loan that is payable over a period longer than a year.
  65. Answer: T
  66. Question 32: Amortization is the process of dividing your debt obligation, plus interest, into increasingly smaller monthly payments over a set period of time.
  67. Answer: F
  68. Question 33: Many car buyers seek to obtain a preapproved loan so that they know the maximum amount they will be able to borrow in advance.
  69. Answer: T
  70. Question 34: If something major happens to a leased car, such as engine failure, the lessee usually must pay for it.
  71. Answer: F
  72. Question 35: A lease payment on a car is typically much more than a monthly car loan payment.
  73. Answer: F
  74. Question 36: A landlord must keep tenants’ security deposits in a separate account and refund any nonused portions.
  75. Answer: T
  76. Question 37: An unsecured loan must be backed by collateral.
  77. Answer: F
  78. Question 38: Debt represents future earnings already spent.
  79. Answer: T
  80. Question 39: You should establish and maintain an amount of unused credit available for use in emergencies.
  81. Answer: T
  82. Question 40: A loan shark offers illegal  loans at very high interest rates.
  83. Answer: T
  84. Question 41: Cash advances obtained through your credit card usually have a high fee of 6 percent or more but carry a lower interest rate than regular credit card purchases.
  85. Answer: F
  86. Question 42: A consumer has 90 days from the day a bill is received to file a dispute.
  87. Answer: F
  88. Question 43: If you order your credit report online, you can have access to it within minutes.
  89. Answer: T
  90. Question 44: As a rule of thumb, an emergency fund of $1,000 is sufficient to cover many types of unplanned expenses.
  91. Answer: T
  92. Question 45: Liquidity is a term used to describe how quickly your money can trickle away to nothing if you fail to meet your savings and investment goals.
  93. Answer: F
  94. Question 46: In general, the greater the potential return, the higher the risk.
  95. Answer: T
  96. Question 47: A bear market exists when stock prices are consistently rising.
  97. Answer: F
  98. Question 48: Using the strategy of dollar-cost averaging relieves the investor of having to study the stock market to try and determine the best time to buy stocks.
  99. Answer: T
  100. Question 49: You can lose part of your principal if you withdraw funds from a CD early.
  101. Answer: T
  102. Question 50: Most financial experts believe that buying your own home is the best investment you will ever make.
  103. Answer: T
  104. Question 51: All of the following are examples of hard skills except
  105. Answer: C
  106. Question 52: Factors that affect your earnings potential include
  107. Answer: D
  108. Question 53: A job description may include all except
  109. Answer: D
  110. Question 54: Price increases for a product are most likely to occur when
  111. Answer: B
  112. Question 55: Scholarships are available to students based on
  113. Answer: D
  114. Question 56: Which of the following is true of a subsidized student loan?
  115. Answer: A
  116. Question 57: Which of the following is not good advice regarding resumes?
  117. Answer: B
  118. Question 58: Which of the following is good advice regarding job interviews?
  119. Answer: A
  120. Question 59: The following are examples of pay without work except
  121. Answer: B
  122. Question 60: Which of the following is true of public goods?
  123. Answer: D
  124. Question 61: A property tax is based on the property’s
  125. Answer: A
  126. Question 62: Which of the following is not an optional deduction from your pay?
  127. Answer: B
  128. Question 63: The form used to report taxable income a worker received during the calendar year is
  129. Answer: C
  130. Question 64: An example of a perk is
  131. Answer: D
  132. Question 65: Which of the following is a measure of inflation?
  133. Answer: C
  134. Question 66: When consumers act in their own best self-interests when making purchases, they are engaging in
  135. Answer: A
  136. Question 67: The Consumer Technology Bill of Rights gives consumers the right to
  137. Answer: D
  138. Question 68: Which law requires drug manufacturers to test drugs for safety and effectiveness before they are sold to consumers?
  139. Answer: C
  140. Question 69: Your net worth can be computed as
  141. Answer: C
  142. Question 70: A utility bill (water,electric, gas)  is an example of
  143. Answer: B
  144. Question 71: Standards against which progress is measured in reaching goals are called
  145. Answer: A
  146. Question 72: Goals you wish to achieve in the next two to five years are
  147. Answer: C
  148. Question 73: Which of the following is a common Internet scam in which an e-mail is sent from someone posing as your bank or other legitimate business asking for personal information?
  149. Answer: A
  150. Question 74: The amount of extra money a person has left over after all necessary expenses are met is called
  151. Answer: B
  152. Question 75: What should you do if your budget does not balance?
  153. Answer: D
  154. Question 76: The words “Pay to the order of” are included in which type of endorsement?
  155. Answer: B
  156. Question 77: When a paper check is transformed into a digital image, it is said to be
  157. Answer: C
  158. Question 78: When reconciling a bank statement, the amount of outstanding checks is
  159. Answer: A
  160. Question 79: Which of the following would not be an adjustment to the checkbook register balance on a bank reconciliation?
  161. Answer: C
  162. Question 80: Which of the following is the most liquid?
  163. Answer: A
  164. Question 81: When you set aside a fixed amount of savings on a regular basis over time, it is called
  165. Answer: C
  166. Question 82: Self-insuring is an example of which risk strategy?
  167. Answer: D
  168. Question 83: If your health insurance has a $10,000 stop-loss provision, what percentage of medical expenses will it pay once you have incurred $10,000 in deductibles and copays in a year?
  169. Answer: D
  170. Question 84: Which of the following would not be covered by a regular homeowner’s insurance policy?
  171. Answer: B
  172. Question 85: Which type of insurance coverage protects against damage to your own vehicle when you are at fault in hitting another car?
  173. Answer: B
  174. Question 86: When choosing health insurance coverage a way to save money on monthly premuims is to
  175. Answer: D
  176. Question 87: The type of health care coverage that would pay for the care offered in a nursing home is
  177. Answer: D
  178. Question 88: Which of the following is not one of the five steps of creating a buying plan?
  179. Answer: B
  180. Question 89: Protections offered by many credit card companies include
  181. Answer: D
  182. Question 90: Which of the following is not a result of financial irresponsibility?
  183. Answer: C
  184. Question 91: Late credit card payments can
  185. Answer: D
  186. Question 92: Which of the following is not a benefit of using credit cards?
  187. Answer: D
  188. Question 93: Which of the following is true of a payday loan?
  189. Answer: B
  190. Question 94: Which of the following is true of an FHA mortgage loan?
  191. Answer: D
  192. Question 95: Which of the following is not a right of a landlord?
  193. Answer: A
  194. Question 96: Late fees and over-the-limit fees on your credit card bill can
  195. Answer: D
  196. Question 97: The legal process that allows a lender to take possession of a house because the borrower does not meet his or her mortgage obligations is called
  197. Answer: B
  198. Question 98: Under which type of bankruptcy is all debt erased?
  199. Answer: A
  200. Question 99: Under which type of bankruptcy does the debtor follow a court-approved plan to pay back as much debt as possible over a three- to five-year period?
  201. Answer: C
  202. Question 100: Which of the following methods of avoiding bankruptcy requires you to turn over your checking account and bills to a debt manager?
  203. Answer: B
  204. Question 101: Investing is
  205. Answer: B
  206. Question 102: Short-term goals may involve
  207. Answer: A
  208. Question 103: During retirement, it is likely that
  209. Answer: D
  210. Question 104: An investment portfolio should
  211. Answer: A
  212. Question 105: When a company’s overseas factory is destroyed during protests and rioting, this is an example of
  213. Answer: C
  214. Question 106: When the return on your investment is not keeping pace with the rapidly increasing prices in the general economy, this is a case of
  215. Answer: A
  216. Question 107: Which of the following is most likely to be a medium-term goal?
  217. Answer: B
  218. Question 108: Which of the following is FDIC-insured?
  219. Answer: A
  220. Question 109: Which of the following government securities has a variable interest rate that is adjusted annually based on inflation.
  221. Answer: A
  222. Question 110: When rental income exceeds the cost of ownership, you experience
  223. Answer: A
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