BUSI 1307 Personal Finance Quiz 1

A family has a net worth of $156,000 and liabilities of $167,000, what is the amount of their assets? (a) $323,000 (b) $156,000 (c) $11,000 (d) $167,000

(a) $323,000

Jim has a savings account with $550 in it. He knows that he can withdraw this money from his savings account whenever he wishes. This would be an example of: (a) a liquid asset (b) a long-term investment (c) net worth (d) money management

(a) a liquid asset

The stages that an individual goes through based on age, financial needs, and family situation is called the: (a) adult life cycle (b) financial planning process (c) personal economic cycle (d) tax planning process

(a) adult life cycle

An all-purpose account that provides several services is a(n); (a) asset management account (b) EFT account (c) money market account (d) mutual fund

(a) asset management account

Changes in the demand for goods and services is an example of a(n) _____ influence on the job market. (a) economic (b) social (c) competitive (d) technological

(a) economic influence

Money received in the form of dividends or interest is _____ income. (a) investment (b) passive (c) earned (d) capital gain

(a) investment

A budget is a specific plan of how a person or family will spend their money. (a) true (b) false

(a) true

Personal financial records include birth certificate, marriage license, and social security card. (a) true (b) false

(a) true

In a recent month, Ken has cash inflows of $3,100 and cash outflows of $2,950, resulting (a) a balanced budget (b) a surplus of $150 (c) a surplus of $3,100 (d) a deficit of $150

(b) a surplus of $150

Billy has decided to put $25 more per week in his savings account. He knows this will reduce his ability to go out to eat each week but thinks building his savings is important. This would be an example of: (a) a budget variance (b) an opportunity cost (c) a liquid asset (d) net worth

(b) an opportunity cost

Consumers will usually obtain the best overall value of their dollar by having all financial services with the same institution. (a) true (b) false

(b) false

_____ are expenses that a taxpayer is allowed to deduct from adjusted gross income. (a) exemptions (b) itemized deductions (c) tax credits (d) passive income

(b) itemized deductions

An advantage credit unions may have over other financial institutions is: (a) interest-bearing checking accounts (b) low-cost personal loans (c) credit cards (d) variable-rate savings plans

(b) low-cost personal loans

The main responsibility of The Fed is to: (a) approve spending by Congress (b) maintain an adequate supply of money (c) determine illegal business activities (d) maintain a balanced budget for the federal government

(b) maintain an adequate supply of money

An exclusion affects a person's taxes by: (a) increasing itemized deductions (b) reducing the amount of taxable income (c) increasing the number of expectations a person can claim (d) decreasing itemized deductions

(b) reducing the amount of taxable income

A personal balance sheet: (a) predicts income and expenses (b) reports what an individual or a family owes and owns (c) analyzes debt payment activities (d) analyzes spending habits

(b) reports what an individual or a family owes and owns

A Traditional IRA, Keogh plan and 401 K plan are examples of: (a) tax-exempt retirement plans (b) tax-deferred retirement plans (c) capital gains (d) job-related expenses that are tax-deductible

(b) tax-deferred retirement plans

Patricia McDonald has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000, and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long-term liabilities is $98,000. What is Jamie's net worth? (a) $267,500 (b) $105,500 (c) $162,000 (d) $132,000

(c) $162,000

The first step of the career planning process is to: (a) evaluate the job market (b) identify potential job opportunities (c) access your interests, abilities, and goals (d) develop a resume and cover letter

(c) access your interests, abilities and goals

The main goal of personal financial planning is: (a) saving and investing for future needs (b) reducing a person's tax liability (c) achieving personal economic satisfaction (d) spending to achieve financial objectives (e) saving, spending, and borrowing based on current needs

(c) achieving personal economic satisfaction

A financial institution organized for the main purpose of providing loans to purchase homes is a: (a) credit union (b) consumer financial company (c) mortgage company (d) mutual savings bank

(c) mortgage company

To avoid high fees for loans, a person should not borrow from a: (a) credit union (b) savings and loan association (c) pawnshop (d) mutual savings bank

(c) pawnshop

The Truth-in-Savings law requires that financial institutions: (a) provide insurance for savings account (b) send customers monthly bank statements (c) report annual percentage yield on savings (d) become members of the Federal Reserve System

(c) report annual percentage yield on savings

What type of tax is imposed on the value of an individual's property at the time of his or her death? (a) inheritance (b) excise (c) gift (d) estate

(d) estate