Individual and Family Resource Management
Exam Materials
Course Introduction
Individual and Family Resource Management explores the strategies and decision-making processes involved in managing resources such as time, money, energy, and relationships within households. The course examines the impact of values, goals, and cultural differences on resource allocation and utilization, considering challenges faced by individuals and families across various life stages. By integrating practical problem-solving skills, students analyze real-world scenarios to understand budgeting, financial planning, time management, and conflict resolution, ultimately gaining insights to effectively manage personal and family resources in changing environments.
Recommended Textbook
Personal Finance Turning Money into Wealth 7th Edition by Arthur J. Keown
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17 Chapters
2509 Verified Questions
2509 Flashcards
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Page 2
Chapter 1: The Financial Planning Process
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) Personal financial planning can help you to
A) deal with unplanned health issues.
B) minimize your tax payments to Uncle Sam.
C) minimize your chances of personal bankruptcy.
D) have enough money for a comfortable retirement.
E) all of the above.
Answer: E
Q2) Diversification allows you to reduce risk.
A)True
B)False
Answer: True
Q3) Which of the following is outlined in the text as reason(s)why many people do not have an adequate financial plan?
A) For most people it is easier to spend than save.
B) Procrastination can affect everyone.
C) Many of us lack the proper knowledge.
D) There is never enough time for organizing and planning.
E) All of the above are common excuses for not planning.
Answer: E
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Page 3
Chapter 2: Measuring Your Financial Health and Making a Plan
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Suppose that you have been operating an online marketing business out of your home,and the business has recently expanded beyond belief.Since you have neglected your personal finances for some time,what would you do as a first step?
A) Separate your personal finances from the business finances.
B) Combine your personal finances and business finances to save time.
C) Rent a separate office for your business activities.
D) Purchase a software program to handle both your business and personal finance at the same time.
Answer: A
Q2) ________ can be more than or less than the price you paid for a given asset,depending on what others are willing to pay for that asset today.
A) Net value
B) Fair market value
C) Intrinsic value
D) Sentimental value
Answer: B
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Chapter 3: Understanding and Appreciating the Time Value of Money
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122 Flashcards
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Sample Questions
Q1) Which financial planning concepts should be helpful to a couple planning for how much money to start saving for their retirement?
A) Reinvesting
B) Compound interest
C) Future values
D) Present values
E) All of the above
Answer: E
Q2) Suppose that you want to create a "retirement party fund" for yourself and place $50 in a bank account for each of the next 20 years.If that account earns an annual rate of return of 7%,how much will be in your retirement party fund at the end of the twentieth year?
A) $1,529.70
B) $2,679.22
C) $1,032.57
D) $2,049.77
Answer: D
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Chapter 4: Tax Planning and Strategies
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129 Flashcards
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Sample Questions
Q1) Explain the concept of using the standard deduction or using itemized deductions.
Q2) If you are in a 25 percent tax bracket then every dollar of your adjusted gross income will be taxed at 25 percent.
A)True
B)False
Q3) Claire currently makes $30,000 per year and is in a 15% tax bracket.If she contributes $1,800 to her 401(k)plan at work,by how much will this lower her tax liability?
A) $270
B) $1,800
C) $4,500
D) $4,230
Q4) The FICA tax is typically deducted from your salary at a rate of ________until your salary reaches a point where it is no longer taxed at the rate of ________ for Social Security.
A) 6.20 percent; 1.45 percent
B) 7.65 percent; 6.20 percent
C) 15.3 percent; 7.65 percent
D) 20 percent; 10 percent
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Chapter 5: Cash or Liquid Asset Management
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) List the common deposit-type financial institutions.
Q2) Card-blocking occurs when you use a debit card (or credit card)to check into a hotel or rent a car and the anticipated expenses are blocked-in effect,placing a hold on the money.
A)True
B)False
Q3) Once you have examined a financial institution's service and convenience you will want to ask three questions about their cash management alternatives.What are they?
Q4) Financial institutions that provide traditional checking and savings accounts are commonly referred to as
A) deposit-type financial institutions.
B) nondeposit-type financial institutions.
C) personal depository institutions.
D) financial brokerage companies.
E) None of the above are correct.
Q5) It is best for college students to wait and begin saving once they are "making more money."
A)True
B)False
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Chapter 6: Using Credit Cards: The Role of Open Credit
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153 Verified Questions
153 Flashcards
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Sample Questions
Q1) Leon is 28 years old and pays cash for everything he buys.He has never had credit in his name and never missed or been late on any bills he has ever had.He recently went online to check what his credit score was.Where do you think his credit score would be?
A) over 800
B) between 700 and 799
C) between 600 and 699
D) None of the above
Q2) Why is it important for young people to establish a good credit history as soon as possible?
Q3) Non-profit Credit Counselors should be avoided due to their high fees.
A)True
B)False
Q4) Susan has never seen a copy of her credit report.Which of the following is not a credit bureau?
A) Experian
B) TransUnion
C) Equifax
D) Equitax
Q5) Compare and contrast the average,previous,and adjusted balance methods.
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Chapter 7: Student and Consumer Loans: The Role of Planned Borrowing
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Describe in detail the characteristics of the direct subsidized and unsubsidized student loans from the Federal government.
Q2) Consumer loans can range from unsecured,fixed-rate,single-payment loans to secured,variable-rate,installment loans.
A)True
B)False
Q3) A 529 plan is a tax-advantaged savings plan designed to encourage parents to save for future college costs for their children.The plan comes in two forms: pre-paid tuition plans and college savings plans.
A)True
B)False
Q4) The 28/36 rule says that as long as your total debt payments are under 36 percent of your gross income then you are not overextended.
A)True
B)False
Q5) What are some of the leading causes of bankruptcy?
Q6) Describe the four major parts of a typical loan contract.
Q7) List three reasons why a student-loan borrower may be granted a deferment.
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Chapter 8: The Home and Automobile Decision
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199 Flashcards
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Sample Questions
Q1) A mortgage loan in which the interest rate charged fluctuates with the level of current interest rates is called a(n)
A) MRA.
B) MAR.
C) RAM.
D) ARM.
E) none of the above.
Q2) Rhonda is buying a second home to use as income property.She is financing 75% of the home's $100,000 value.Her bank is loaning her the money for 10 years at an APR of 4.5%.How much are Rhonda's mortgage payments?
A) $441.28
B) $598.74
C) $777.28
D) $958.44
E) $1,014.33
Q3) It's advisable to always take the biggest loan that a lender will give you.
A)True
B)False
Q4) Provide the most common one-time or initial costs involved in buying a house.
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Chapter 9: Life and Health Insurance
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212 Verified Questions
212 Flashcards
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Sample Questions
Q1) If your employer doesn't provide them,then it might not be a financially wise decision to purchase dental and eye insurance.
A)True
B)False
Q2) Life insurance buying is a new experience for many people.Which of the following is not a basic consideration when determining life insurance needs?
A) Whether or not you need life insurance at this time
B) The amount of coverage you need now and in the future
C) The settlement options
D) The type of life insurance that fits your needs
E) Shopping around for the best agent and price
Q3) How does the concept of "opting out" work?
Q4) Describe the pros and cons of major medical insurance.
Q5) Describe the disability insurance features that make sense.
Q6) One of the best features of term insurance is that you are able to borrow against the face value.
A)True
B)False
Q7) Why is health insurance so necessary today?
Page 11
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Chapter 10: Property and Liability Insurance
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) With no-fault insurance you can still sue for "pain and suffering" but only if the other driver was at fault.
A)True
B)False
Q2) Felix's $2,000 TV was stolen.He has no record of its purchase,however,he knows his insurance company will reimburse him the full value of the TV.
A)True
B)False
Q3) Wilber Robinson found out that his homeowner's coverage comes in handy when a neighbor steps on a garden rake and it flips up and causes a concussion.Josh did just that and spent two weeks in the hospital running up a $23,000 bill.Josh was covered under
A) section II medical payments.
B) section II personal liability.
C) section I loss of use.
D) added liability insurance.
E) the 80 percent rule.
Q4) Describe each of the six HO packaged policies.Which one is the most common?
Q5) Provide an explanation of Section II: Personal Liability Coverage.
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Chapter 11: Investment Basics
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309 Verified Questions
309 Flashcards
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Sample Questions
Q1) Explain the concept of liquidity relating to personal financial planning.
Q2) Securities are generally sold in the primary markets with the help of a(n)________ serving as a(n)________.
A) individual investor; underwriter
B) corporation; investment banker
C) regulatory commission; individual investor
D) underwriter; regulatory commission
E) investment banker; underwriter
Q3) The ________ rate of return earned on an investment is unadjusted for lost purchasing power.
A) effective
B) annual
C) real
D) nominal
E) none of the above
Q4) Why do investors sometimes demand risk premiums when investing?
Q5) What personal characteristics should you look for in a full-service broker and why are they important?
Q6) Tell how your understanding of efficient markets helps with investing.
Q7) Describe the sources of risk in the risk-return trade off.
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Chapter 12: Investing in Stocks
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178 Verified Questions
178 Flashcards
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Sample Questions
Q1) A ________ increases the number of stock shares outstanding by replacing each existing share of stock with a stated number of new shares.
A) dividend reinvestment
B) stock split
C) stock repurchase
D) stock reissue
E) none of the above
Q2) Coca-Cola is an example of a red-chip stock.
A)True
B)False
Q3) Capital appreciation refers to an increase in the selling price of your shares of stock.
A)True
B)False
Q4) Earnings per share is a ratio that describes the amount of net income less preferred stock dividends available to the common shareholders.
A)True
B)False
Q5) Briefly describe the SWOT analysis.
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Chapter 13: Investing in Bonds and Other Alternatives
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) According to your textbook,when you are investing in gold,silver,gems,and collectibles you are actually
A) discreetly investing.
B) diversifying your investment portfolio.
C) hedging.
D) speculating.
E) none of the above.
Q2) The long-term bond you own was issued by IBM Corporation and used no collateral.This is an example of a(n)
A) unsecured mortgage.
B) credit.
C) debenture.
D) nomenclature.
E) none of the above.
Q3) Approximately two-thirds of Americans own their own homes.
A)True
B)False
Q4) Bonds which are very low rated,yet high yielding bonds are known as junk bonds. A)True
B)False
Page 15
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Chapter 14: Mutual Funds: An
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136 Flashcards
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Sample Questions
Q1) The process of buying a mutual fund involves determining your investment goals,identifying funds that meet your objectives,and evaluating those funds.
A)True
B)False
Q2) Zippo Mutual Fund is one of your best performers.It just announced a year-end distribution of $2.50 per share in capital gains and $4.25 in dividends.Assuming the NAV increased from $31.50 to $43.75,calculate your total annual return.
A) 60.32%
B) 46.87%
C) 26.95%
D) 24.53%
Q3) When screening mutual funds,two of the best websites are: Morningstar and Yahoo!Finance.
A)True B)False
Q4) In what ways do unit investment trusts and real estate investment trusts resemble mutual funds?
Q5) Provide a list of sources of information to evaluate mutual funds.
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Chapter 15: Retirement Planning
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Sample Questions
Q1) Defined-benefit pension plans are generally ________ and they lack ________.
A) contributory; divesting
B) noncontributory; divesting
C) contributory; portability
D) noncontributory; portability
E) vested; portability
Q2) The difference between a Money Purchase Plan and a Profit Sharing plan is that A) with the Profit Sharing Plan the employee is guaranteed to see profits in their retirement funds.
B) with the Money Purchase Plan the contributions are required regardless of how the firm performs.
C) Profit Sharing Plans constantly outperform Money Purchase Plans.
D) all of the above are correct.
E) both A and C are correct.
Q3) The Federal Insurance Contributions Act isn't an investment,but rather a mandatory insurance plan that one pays into through salary deductions.
A)True
B)False
Q4) Relate the pros and cons of defined-benefit plans.
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Chapter 16: Estate Planning: Saving Your Heirs Money and Headaches
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Sample Questions
Q1) Only about ________ Americans have created a trust as part of an estate plan.
A) one out of three
B) one out of five
C) five out of 10
D) eight out of 10
Q2) A trust that gives the individual establishing the trust the ability to direct income from the trust to his or her spouse over the spouse's life,and then,at the spouse's death,to
choose to whom the assets go is called a
A) sprinkling trust.
B) Q-TIP.
C) A-B trust.
D) credit-shelter trust.
E) unified credit trust.
Q3) All of the following are commonly used estate planning tools except A) a will.
B) durable power of attorney and joint ownership of assets.
C) life insurance.
D) gifts and trusts.
E) All of the above are commonly used estate planning tools.
Q4) Make a list of ways to avoid probate.
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Chapter 17: Financial Life Events Fitting the Pieces Together
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Sample Questions
Q1) According to your text,which of the following is true regarding employment in today's world?
A) Your history with the company is all that matters.
B) Working at a company for many years ensures that you will keep your job.
C) Reinventing and upgrading your skills is a necessity in today's business world.
D) None of the above.
Q2) Buying a home is one of the smartest investments you can make.What are the proper steps necessary to make sure you do it right?
Q3) Which of the following is not true regarding investing in stocks?
A) They are risky, but not as risky as not investing in them.
B) Mutual funds are an easy way to invest in stocks and diversify.
C) You should let asset allocation decisions be guided by your time horizon.
D) You should review the time dimension of investing.
E) All of the above are true statements.
Q4) According to your text,is it recommended that couples have a joint credit card or not?
A) No, it is best for couples to have their own credit cards.
B) Yes, it is important for couples to have joint credit cards.
Q5) How can someone plan for a major illness?
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