Course Introduction
Financial Literacy
Solved Exam Questions
Financial Literacy introduces students to the fundamentals of managing personal finances and understanding the broader financial environment. The course covers essential topics such as budgeting, saving, investing, credit and debt management, and the basics of insurance and taxation. Students will learn practical strategies for making informed financial decisions, setting financial goals, and evaluating financial products and services. By exploring real-world scenarios and case studies, the course aims to equip students with the knowledge and skills needed to handle financial challenges and build a secure financial future.
Recommended Textbook
Personal Finance 4 4th Edition by Lawrence J. Gitman
Available Study Resources on Quizplus 15 Chapters
2587 Verified Questions
2587 Flashcards
Source URL: https://quizplus.com/study-set/3514
Page 2
Chapter 1: Understanding the Financial Planning Process
Available Study Resources on Quizplus for this Chatper
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/69803
Sample Questions
Q1) The consumer price index (CPI)is the amount of goods and services each dollar buys at a given time.
A)True
B)False
Answer: False
Q2) Current consumption is inversely related to saving for the future.
A)True
B)False
Answer: True
Q3) Gross domestic product (GDP)refers to the total earnings of American workers during a year.
A)True
B)False
Answer: False
Q4) Cities with higher cost of living also experience higher rates of inflation.
A)True
B)False
Answer: False
Q5) [Tax | Liability and insurance] planning is introduced early in the life cycle. Answer: B
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Using Financial Statements and Budgets
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/69804
Sample Questions
Q1) When Phil lists his house on his balance sheet,he should record the:
A) actual purchase price.
B) replacement value.
C) insured value.
D) deferred price.
E) fair market value.
Answer: E
Q2) Jewelry,furniture,and computers are examples of personal property.
A)True
B)False
Answer: True
Q3) The Flemings will need $80,000 annually for 20 years during retirement.How much will they need at retirement if they can earn a 4% rate of return?
Answer: 11ea84e6_2e09_a554_abcc_791d70784b6e_TB3853_00_TB3853_00
Q4) Using time value of money is most important when planning for short-term goals. A)True
B)False
Answer: False
Q5) When your liabilities exceed your assets,you are [solvent | insolvent].
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Preparing Your Taxes
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/69805
Sample Questions
Q1) My son,age 26 and a full-time college student,earned $5,000 last year.He still lives at home,and I provide over 50% of his support.I [can | cannot] claim him as a dependent on my tax return.
Answer: B
Q2) Your marital status will affect the amount of social security you must pay in a year. A)True
B)False Answer: False
Q3) The terms "tax free" and "tax deferred" [do | do not] mean the same thing.
Answer: B
Q4) The highest marginal tax rate is currently [39.6% | 35%]. Answer: A
Q5) Shawn earned $65,000.If the total Social Security tax rate is 15.3% then how much was his social security tax? How much would his employer pay in social security taxes for Shawn?
Answer: Alex paid social security tax of $4,973 [(.153 × $65,000)/ 2]. Alex's employer would also pay $4,973.
Q6) Interest you paid on your [vacation home | consumer] loan could be deducted. Answer: A
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Managing Your Cash and Savings
Available Study Resources on Quizplus for this Chatper
189 Verified Questions
189 Flashcards
Source URL: https://quizplus.com/quiz/69806
Sample Questions
Q1) Credit union members are expected to have some common bond.
A)True
B)False
Q2) A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of: (Select the closest answer)
A) $11,600.
B) $16,640.
C) $22,500.
D) $52,938.
E) $96,000.
Q3) You make a promise to keep funds on deposit for a stated period of time when you open a [MMDA | CD].
Q4) [All | Some] banks include canceled checks with the monthly statement.
Q5) Credit unions channel the savings of depositors primarily into mortgage loans for purchasing and improving homes.
A)True
B)False
Q6) Series EE bonds may be redeemed [any time after the first 12 months | only at the maturity date].
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Making Automobile and Housing Decisions
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/69807
Sample Questions
Q1) Capitalized cost on an auto lease is similar to the interest rate on a loan.
A)True
B)False
Q2) The _____ Act governs closings on owner-occupied houses,condominiums,and apartment buildings of four units or fewer.
A) Equal Credit Opportunity
B) Truth-in-Lending
C) Real Estate Settlement Procedures
D) Mortgage Lenders
E) None of the above
Q3) One can arrange auto loans through:
A) auto dealers.
B) banks.
C) credit unions.
D) consumer finance companies.
E) all of the above
Q4) Renting affords more flexibility than home ownership.
A)True
B)False
Q5) The biggest fixed cost of owning a car is [the loan payment | insurance].
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Using Credit
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/69808
Sample Questions
Q1) It is safe,and often required,to give your Social Security number as a form of identification when using a credit card.
A)True
B)False
Q2) The majority of reduction in consumer indebtedness is due to home and consumer loan defaults.
A)True B)False
Q3) Unsecured lines of credit are easy to use and often use some form of collateral as default protection.
A)True
B)False
Q4) All of the following are key items lenders look at in granting credit except: A) income.
B) outstanding debt.
C) stability in employment and housing.
D) religious affiliations.
E) credit history.
Q5) An example of open account credit would be a bank [debit | credit] card.
Q6) An improper use of extended credit would be to buy [a car | nondurable goods].
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Using Consumer Loans
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/69809
Sample Questions
Q1) In order to receive Stafford student loans,the student must be making satisfactory progress in his academic program.
A)True
B)False
Q2) If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.
A)True B)False
Q3) The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.
A)True
B)False
Q4) Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.
A)True B)False
Q5) Savings and loan associations dominate the consumer loan market. A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Insuring Your Life
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/69810
Sample Questions
Q1) An insured can borrow from the [cash | face] value of his/her life insurance policy.
Q2) Marilyn Simms died with a $200,000 life insurance policy.Her husband,Jack,was the primary beneficiary and their children,Mimi (age 24)and Ann (age 30),were the contingent beneficiaries.All three survived Marilyn.How would the policy proceeds be distributed?
A) $200,000 to Jack
B) $100,000 each to Mimi and Ann
C) $100,000 to Jack and $50,000 each to Mimi and Ann
D) $66,666 each to Jack,Mimi,and Ann
E) $150,000 to Jack and $25,000 each to Mimi and Ann
Q3) The policy owner assumes the investment risk with a [whole life | variable life] insurance policy.
Q4) A [viatical settlement | guaranteed purchase option] is when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary.
Q5) [Level premium | annual renewable] term policies have become much more popular in recent years.
Q6) If a loss is certain to occur,there is [a | no] risk.
Q7) Group insurance is most likely to be for [a term | whole life].
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Insuring Your Health
Available Study Resources on Quizplus for this Chatper
154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/69811
Sample Questions
Q1) Major medical plans will usually cover the cost of nursing home care.
A)True
B)False
Q2) Medicare and Medicaid are hospital and physicians coverage,respectively.
A)True
B)False
Q3) Some surgical expense insurance pays a specific amount for a list of various types of surgery.
A)True
B)False
Q4) Major medical insurance often supplements the basic coverage of hospital,surgical,and physician's expense insurance.
A)True
B)False
Q5) If you are laid off,your group health insurance [can be continued at the employer's option | must be continued if you pay the premiums].
Q6) [Medicare | Workers' compensation] pays for medical expenses that are the result of on-the-job injuries and illnesses.
Q7) Long-term care [does | does not] have a deductible.
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Protecting Your Property
Available Study Resources on Quizplus for this Chatper
189 Verified Questions
189 Flashcards
Source URL: https://quizplus.com/quiz/69812
Sample Questions
Q1) [Comprehensive | Named peril] policy covers all perils unless they are specifically excluded.
Q2) Actual cash value (ACV)is calculated by subtracting depreciation from the [purchase price | replacement cost] of an item.
Q3) The insurance company [will | will not] provide liability coverage if your dog bites the neighbor.
Q4) Section I of a homeowner's insurance policy covers [personal liability | medical payments |].
Q5) If your furniture in your rented apartment is destroyed by a fire,it [would | would not] be covered by your landlord's policy.
Q6) You use a small building on your property to manufacture Widgets.This building [will | will not] be covered by your standard HO policy.
Q7) While you were away on winter vacation,there was a severe snowstorm that caused your roof to cave in causing a $20,000 loss.Your HO-2 policy will cover this loss.
A)True
B)False
Q8) A claims adjustor typically works for a(n) [insurance company | claimant].
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Investment Planning
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/69813
Sample Questions
Q1) The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included provisions to improve [accountability | sustainability].
Q2) Portfolio management involves making decisions in order to:
A) buy low and sell high.
B) maximize risk and return.
C) accept risk.
D) own stocks in bear markets.
E) meet your investment needs and objectives.
Q3) Before you start investing,you should plan to have a minimum of [$1,000 | $15,000] available.
Q4) The NYSE index includes all stocks listed on the "Big Board."
A)True
B)False
Q5) There are a variety of investment vehicles including which of the following?
A) Common stock.
B) Bonds.
C) Preferred and convertible securities.
D) Real estate.
E) All of the above are investment vehicles
Q6) A [bull | bear] market is characterized by falling stock prices.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Investing in Stocks and Bonds
Available Study Resources on Quizplus for this Chatper
186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/69814
Sample Questions
Q1) Annual interest income divided by market price of the bond equals [current yield | yield to maturity].
Q2) The commonly-cited price for a bond in the financial press and on the Web is usually its clean bond price.
A)True
B)False
Q3) When cash dividends on stock are paid,but the stockholder has these dividends automatically reinvested,what are the federal income tax implications?
A) Taxes must be paid in the year the dividends are paid at ordinary income tax rates.
B) Taxes must be paid in the year the dividends are paid at long-term capital gains rates.
C) Taxes must be paid,but not until the stockholder sells the stock that was purchased through the dividend reinvestment plan.
D) Taxes do not have to be paid on these dividends ever.
E) Either a or c -- it is up to the investor to make the choice.
Q4) A [cyclical | defensive] stock's price would tend to move in the same direction as the entire market.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
170 Verified Questions
170 Flashcards
Source URL: https://quizplus.com/quiz/69815
Sample Questions
Q1) Closed-ended mutual funds are guaranteed,they cannot lose value.
A)True
B)False
Q2) Socially Responsible Funds typically avoid investing in:
A) environmentally sound companies.
B) alcohol and Tobacco stocks.
C) car companies that do not promote safety.
D) fast food chains that sell meat.
E) all of the above
Q3) Mutual funds must value their securities [monthly | daily].
Q4) It is almost impossible to lose money in a mutual fund as the result of fraud or the mutual fund company's bankruptcy.
A)True
B)False
Q5) A no-load mutual fund would most likely be sold by [a broker | calling the mutual fund company].
Q6) Index funds are actively managed.
A)True
B)False
Q7) [Both load and no-load | Only no-load] funds can charge a redemption fee.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Planning for Retirement
Available Study Resources on Quizplus for this Chatper
208 Verified Questions
208 Flashcards
Source URL: https://quizplus.com/quiz/69816
Sample Questions
Q1) The two ways to buy annuities are single premium and:
A) multi-premium.
B) future premium.
C) installment premium.
D) guaranteed premium.
E) lateral premium.
Q2) [Earned income | 401k's] has accounted for a growing amount of total retirement income.
Q3) Keogh and SEP plans provide tax deferred methods for the self-employed to save for their retirement.
A)True
B)False
Q4) The maximum contribution to Keogh plan in 2015 is $53,000 or 25 percent of earned income for sole proprietors.
A)True
B)False
Q5) The third step in retirement planning is to formulate an investment program.
A)True
B)False
Q6) A Roth IRA will be funded with [pre | post] tax dollars.
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Preserving Your Estate
Available Study Resources on Quizplus for this Chatper
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/69817
Sample Questions
Q1) More damage is done to estates by doing nothing than by doing the wrong thing.
A)True
B)False
Q2) You could give an unlimited amount of assets to your [children | spouse] without incurring any gift taxes.
Q3) Knowing where parents keep important documents is a step for estate planning process.
A)True
B)False
Q4) The gift tax law allows a person to give gifts up to [$10,000 | $14,000] tax free.
Q5) Claudia had not yet signed her newly written will when she died.Her new will [would | would not] be valid.
Q6) Your gross estate is reduced by the _____ to determine the adjusted gross estate.
A) state death tax credit
B) orphan's deduction
C) marital deduction
D) funeral and administrative expenses
E) previous year's income tax
To view all questions and flashcards with answers, click on the resource link above. Page 17