Basic Financial Planning Test
Preparation
Course Introduction
Basic Financial Planning introduces the fundamentals of personal financial management, equipping students with the knowledge and skills to make informed decisions regarding budgeting, saving, investing, credit, and risk management. The course covers essential topics such as goal setting, understanding financial statements, analyzing cash flows, and the time value of money. Through practical examples and case studies, students learn to develop financial plans that align with individual or family objectives, preparing them to manage resources effectively and achieve long-term financial security.
Recommended Textbook
Personal Finance 13th Edition by E. Thomas Garman
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17 Chapters
3061 Verified Questions
3061 Flashcards
Source URL: https://quizplus.com/study-set/1328
Page 2
Chapter 1: Understanding Personal Finance
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/26518
Sample Questions
Q1) Occasionally,the economy will dip into a trough before it has reached a new peak after a previous trough.This phenomenon is called a A)depression.
B)recession.
C)double dip recession.
D)stagflation.
Answer: C
Q2) The study of personal finance involves how people _____ their financial resources. A)spend
B)save
C)invest
D)All of these.
Answer: D
Q3) Fee-based financial planners/brokers charge up-front fees for providing services and charge commissions on any securities trades or insurance purchases that they conduct on your behalf.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Career Planning
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76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/26519
Sample Questions
Q1) Weighing the demands of particular jobs with your social and cultural preferences involves making lifestyle trade-offs.
A)True
B)False
Answer: True
Q2) When you leave an employer,you have the right to continue your health insurance coverage for a specified period of time by paying the premiums yourself.
A)True
B)False
Answer: True
Q3) A career plan provides guidance to help you attain your career goals.
A)True
B)False Answer: True
Q4) Professional networking is the process of establishing and using contacts to obtain and exchange career information.
A)True
B)False Answer: True
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Chapter 3: Financial Statements,tools,and Budgets
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150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/26520
Sample Questions
Q1) The basis for financial planning is (are)
A)a budget.
B)personal values.
C)a balance sheet.
D)goals.
Answer: B
Q2) A family with two income earners will always need a greater amount of cash reserves than a family with one earner.
A)True
B)False Answer: False
Q3) When budgeting,recordkeeping is the process of recording the sources and amount of dollars earned and spent.
A)True
B)False Answer: True
Q4) A low asset-to-debt ratio is a positive indicator of financial well-being.
A)True
B)False Answer: False
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Chapter 4: Managing Income Taxes
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201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/26521
Sample
Questions
Q1) Sal is a 27-year-old single taxpayer in the 28 percent marginal tax bracket.Assuming Sal's standard deduction is $5,800 and she has itemized deductions totaling $6,500,Sal should take the ____ for the additional tax savings of ____.
A)standard deduction; $700
B)standard deduction; $196
C)itemized deduction; $700
D)itemized deduction; $196
Q2) Charitable contributions of goods and property to a qualifying organization should be valued at fair market value when used as an itemized deduction.
A)True
B)False
Q3) The IRS requires that you have receipts for deducted cash contributions of $250 or more.
A)True
B)False
Q4) Most tax shelters are methods permitting an investor to avoid taxes forever.
A)True
B)False
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Chapter 5: Managing Checking and Savings Accounts
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181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/26522
Sample Questions
Q1) Institutions have a rule requiring that savings account holders give 30 to 60 days' notice for withdrawals.
A)True B)False
Q2) Writing a "bad check" can be very expensive because of fees assessed by both the bank and the payee.
A)True B)False
Q3) Time deposits specify a period that the savings must be left on deposit,such as six months or three years.
A)True
B)False
Q4) If your checking account balance drops to less than perhaps $50 at any point during a month you would likely be better off with a minimum deposit account in order to avoid fees.
A)True B)False
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Chapter 6: Building and Maintaining Good Credit
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/26523
Sample Questions
Q1) You may still owe money after repossession if there is a A)deficiency balance.
B)contingency clause in your contract.
C)foreclosure agreement.
D)Chapter 7 bankruptcy.
Q2) The most well-known of the many different types of credit scores used by lenders today is the A)FICO score.
B)Vantage score.
C)Experian score.
D)TransUnion score.
Q3) Services which allow one to access his/her credit report as often as daily and obtain a personal FICO credit score is called a A)credit score.
B)credit-monitoring service.
C)credit application.
D)negative option.
Q4) Credit cannot be used to own expensive products sooner. A)True
B)False
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Chapter 7: Credit Cards and Consumer Loans
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166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/26524
Sample Questions
Q1) Many installment loan contracts that use the add-on method include a prepayment penalty,a special charge to the borrower for paying off a loan earlier than the final due date.
A)True
B)False
Q2) Using the rule of 78s,a borrower who repaid a 12-month loan after only 5 months would save ____ of his or her interest.
A)7/12
B)5/12
C)50/78
D)28/78
Q3) If your credit card issuer allows you to "skip a payment," interest will not be charged for the month.
A)True
B)False
Q4) Making a payment on one credit card with a cash advance from another is called a balance transfer.
A)True
B)False
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Chapter 8: Vehicles and Other Major Purchases
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145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/26525
Sample Questions
Q1) Which of the following will not help you become a better on-line shopper?
A)Only do business with sellers for which you have complete contact information.
B)Use only one particular credit card for on-line purchases.
C)Use a debit card for on-line purchasing.
D)Do not use your regular e-mail address.
Q2) The term used to describe righting a wrong is
A)negotiation.
B)redress.
C)complaint.
D)warranty.
Q3) To compare the two APRs accurately when choosing between low interest rate dealer financing and a rebate on a new vehicle,you must subtract the opportunity cost of the foregone rebate from the finance charge of the dealer financing. A)True
B)False
Q4) The first step in negotiating a new vehicle purchase is to obtain a firm commitment for your trade-in.
A)True
B)False
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Chapter 9: Obtaining Affordable Housing
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217 Verified Questions
217 Flashcards
Source URL: https://quizplus.com/quiz/26526
Sample Questions
Q1) A point,as defined in the real estate market,is ____ percent of the loan amount.
A)one-half of
B)1
C)1 and one-half
D)2
Q2) In general,you can avoid capital gains tax on the sale of your home providing you owned and used the home as your principal residence for two of the last five years prior to the date of the sale.
A)True
B)False
Q3) The maximum down payment is based on the lender's desired loan-to-value ratio.
A)True
B)False
Q4) Home warranty insurance is quite similar to a service contract on a vehicle or other product.
A)True
B)False
Q5) A lease typically protects the landlord but not the renter.
A)True
B)False
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Chapter 10: Managing Property and Liability Risk
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209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/26527
Sample Questions
Q1) Homeowner's insurance will pay for bodily injuries to visitors regardless of who is at fault for the loss.
A)True
B)False
Q2) Homeowner's insurance includes
A)property coverage.
B)liability coverage.
C)life insurance coverage.
D)both property coverage and liability coverage.
Q3) Meeting an 80 percent replacement-cost requirement in your homeowner's insurance enables you to avoid incomplete coverage on small losses to your dwelling.
A)True
B)False
Q4) Homeowner's policies may include a clause that automatically raises the policy coverage amount each year to keep pace with inflationary increases in the cost of replacing the dwelling.
A)True
B)False
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Page 12
Chapter 11: Managing Health Expenses
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/26528
Sample Questions
Q1) A clause that require you to pay an initial portion of medical expenses annually before receiving reimbursement is a/an
A)coinsurance
B)deductible
C)premium
D)copayment
Q2) You might want to seek out disability income policies with a cost-of-living clause,which will increase your benefit amount to keep up with inflation.
A)True
B)False
Q3) Disability income policies can be written on ____ basis.
A)an own-occupation
B)an any-occupation
C)a split-definition
D)All of these
Q4) The greater your age when a disability income policy is purchased,the more you might need inflation protection.
A)True
B)False
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Chapter 12: Life Insurance Planning
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215 Verified Questions
215 Flashcards
Source URL: https://quizplus.com/quiz/26529
Sample Questions
Q1) The advantage of term insurance is
A)stable premiums.
B)forced savings.
C)more coverage per premium dollar.
D)high rates of investment return.
Q2) A 5-year term life policy will cost ____ a 1-year renewable term policy during the fifth year of the 5-year period,other factors being equal.
A)more than
B)less than
C)the same as
D)Not enough information is given to answer the question.
Q3) Surviving spouses under age 60 may only collect Social Security survivor's benefits if there are also surviving children under age 18.
A)True
B)False
Q4) Sales commissions represent as much as 90 percent of the first-year premium paid for a cash-value life insurance policy.
A)True
B)False
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Chapter 13: Investment Fundamentals
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172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/26530
Sample Questions
Q1) The investment strategy that requires the percentage of dollars invested in stocks,bonds,and cash to remain fixed over a long period of time is called
A)the buy-and-hold approach.
B)dollar-cost averaging.
C)asset allocation.
D)portfolio diversification.
Q2) ____ risk represents the uncertainty that the yield on an investment will deviate from what is expected.
A)Financial
B)Premium
C)Investment
D)Market
Q3) The real rate of return on a tax-free investment yielding 7 percent annually would be ____ percent if the investor were in the 35 percent marginal tax bracket and inflation were 4 percent.
A)-0.55 percent
B)0.55 percent
C)3.00 percent
D)4.48 percent
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Page 15
Chapter 14: Investing in Stocks and Bonds
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352 Verified Questions
352 Flashcards
Source URL: https://quizplus.com/quiz/26531
Sample Questions
Q1) New companies sell new issues of stock to obtain
A)market share.
B)start-up capital.
C)access to credit.
D)a board of directors.
Q2) The lower the price-to-sales ratio,the better the marketability of a stock.
A)True
B)False
Q3) Which of the following is simply an estimate based on projected future earnings?
A)dividend yield
B)trailing P/E ratio
C)forward P/E ratio
D)earnings per share
Q4) A corporate bond rated AAA would pay a higher rate of interest than a corporate bond rated BBB.
A)True
B)False
Q5) Buying on margin will prevent losses.
A)True
B)False
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Chapter 15: Mutual Funds and Exchange Traded Funds
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176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/26532
Sample Questions
Q1) A(n)____ guarantees the owner a fixed or floating interest rate for predetermined period of time with full return of the initial amount invested.
A)guaranteed investment contract (GIC)
B)unit investment trust
C)index fund
D)mortgage-backed fund
Q2) Purchasing a life-cycle fund is a "set-it-and-forget-it" approach to investing for retirement.
A)True
B)False
Q3) A trailing commission is compensation paid to salespersons for months or years in the future.
A)True B)False
Q4) The SEC requires each mutual fund to state its investment objectives. A)True
B)False
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Chapter 16: Real Estate and High-Risk Investments
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112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/26533
Sample Questions
Q1) An effective way to estimate the value or asking price of a real estate investment is by using the
A)discounted cash-flow method.
B)break-even price.
C)REIT.
D)call option.
Q2) Futures contracts usually focus on all of the following except A)soybeans.
B)orange juice.
C)rubber.
D)coffee.
Q3) Investors in real estate enjoy a high level of liquidity.
A)True
B)False
Q4) Capital gains on real estate are realized through A)price appreciation.
B)price depreciation.
C)depreciation deduction.
D)liquidity.
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Chapter 17: Retirement and Estate Planning
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269 Verified Questions
269 Flashcards
Source URL: https://quizplus.com/quiz/26534
Sample Questions
Q1) Retirement is defined as the time period when you stop all work for pay.
A)True
B)False
Q2) Women need to save more money for retirement than men because they
A)get less from Social Security.
B)get fewer retirement benefits from employer plans.
C)live longer.
D)(All of these.)
Q3) Employer-sponsored retirement plans that are approved by the IRS are said to be A)vested.
B)exempt.
C)qualified.
D)endowed.
Q4) The best-known defined-contribution plan is the
A)401(k) plan.
B)403(b) plan.
C)457 plan.
D)SIMPLE IRA.
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Page 19