Midterm Exam Questions - Personal Financial Mgmt.

Jamie McFarland 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? $267,500 $105,500 $162,000 $205,500 None of the above

$162,000

Ned Turner has done some research and has found that the population in the U.S. is aging and this means that there will be an increased need for health care professionals in the future. This is an example of ______________________ influencing jobs in the future. Demographic trends Economic conditions Industry trends Geographic trends None of the above

Demographic trends

Michelle Duncan wants to know what price home she can afford. Her annual gross income is $45,000. She has $750 expenses per month in other debt and expects that her property taxes and homeowners insurance to cost $250 per month. She knows she can get a 7.5%, 30 year mortgage so that her mortgage payment factor is 6.99. She expects to make a 20% down payment. What is Michelle's affordable home purchase price? (Round your answer to the nearest $100) $76,000 $60,800 $304,000 $42,500 $254,800

$76,000

Which of the following payments would be considered a variable expense? Rent An installment loan payment A mortgage payment A monthly parking fee A telephone bill

A telephone bill

Paul Carter is 43 years old, married and has three children, ages 13, 10 and 5. Which influence on financial planning does this demonstrate? Adult Life Cycle Economic Factors Global Influences Opportunity Costs None of the above

Adult Life Cycle

Which of the following is likely to be part of a lease agreement? The name and address of the landlord The length of the lease The amount of the security deposit The amount and due date of the monthly rent All of the above are likely to be part of a lease agreement

All of the above are likely to be part of a lease agreement

Kyle Burroughs 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: Money management An opportunity cost A balance sheet A liquid asset Net worth

An opportunity cost

A ______________________ allows a taxpayer to put pre-tax dollars into an employer-sponsored program to cover medical and child care costs. Tax credit Tax deduction Flexible spending account Tax deferred investment None of the above

Flexible spending account

Kathy Stumbaugh has determined that the value of her assets is $46,000 and that the value of her debts is $32,000. The difference between these two is. $14,000. This calculation would be an example of: Money management An opportunity cost Net Worth A balance sheet A liquid asset

Net Worth

Which of the following is an advantage of buying? Mobility Tax benefits Fewer responsibilities Minimal financial commitment All of the above are advantages of buying

Tax benefits

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks: measurable terms. a realistic perspective. specific terms. the type of action to be taken. a time frame.

a time frame.

Payments that do not vary from month to month are_____ expenses. a. fixed b. current c. variable d. luxury e. budgeted

a. fixed

Efficient work habits are an example of on-the-job training. continuing education. an employee's initiative. cooperative education.

an employee's initiative

The first step of the financial planning process is to: develop financial goals. implement the financial plan. analyze your current personal and financial situation. evaluate and revise your actions. create a financial plan of action.

analyze your current personal and financial situation.

The use of legitimate methods to reduce one's taxes is tax ____________. evasion avoidance exemptions deferred techniques reductions

avoidance

Amy Farmer has developed a budget that she follows each month. She went to the office supply store and purchased a spiral notebook. Each month she pens in what she wants to spend in the various categories. At the end of the month, she pens the amount that she actually spent in each of these categories and compares the results What type of budget has Amy created? a. A mental budget b. a written budget c. a physical budget d. a computerised budget e. none of the above

b. a written budget

Who is most likely to benefit by inflation? retired people lenders borrowers low-income consumers government

borrowers

The difference between the amount budgeted and the actual amount is called a: financial plan. current liability. change in net worth. budget variance. variable living expense.

budget variance.

______ is correspondence you send toa company to indicate your interest in a position and to obtain an interview. It is generally accompanied by your resume. a. a career fax b. none of the above c. a cover letter d. networking e. an internship

c. a cover letter

A broker statement is an example of a(n)______ record. a. estate planning b. insurance c. investment d. tax e. consumer purchase

c. investment

The major service offered by investment companies is: a. interest-bearing checking accounts b. variable-rate loans c. mutual funds d. savings bonds e. credit card accounts

c. mutual funds

Warranties are commonly associated with ____________ purchases. investment insurance credit financial service consumer

consumer

Michele Barbour is considering an additional charitable contribution of $2,000 to a tax-deductible charity, bringing her total itemized deductions to $16,000. If Michelle is in a 28% tax bracket, how much will this $2,000 contribution reduce her taxes? a. nothing b. $1,600 c. $2,000 d. $560 e. $4,480

d. $560

Allen Arnold has determined that the amount of money he spends on his mortgage payment, car insurance payment and cable bill totals $1200 each month. What type of expenses has Allen determined with this calculation? a. Current Liabilities b. Long Term Liabilities c. Net worth d. Variable Expenses e. fixed expenses

e. Fixed Expenses

Which of the following is not a service provided by electronic banking? a. ability to check balances of accounts at the bank b. ability to make an automatic payment for your mortgage c. ability to transfer funds from a savings account to a checking account d. ability to get direct deposit of your paycheck e. ability to write a check at the grocery store

e. ability to write a check at the grocery store

a chronological résumé represents personal data based on: a. education b. areas or ability c. career goal d. experience e. time

e. time

The study of how wealth is created and distributed is: financial planning. opportunity cost. inflation. economics. a market economy.

economics.

The Occupational Outlook Handbook would be most useful to determine: jobs available in your community. current economic conditions. expected employment in various career clusters. interview questions for various careers. suggested résumé formats for various career fields.

expected employment in various career clusters.

If a person deposited $50 a month for 6 years earning 8 percent, this would involve what type of computation? simple interest future value of a single amount future value of a series of deposits present value of a single amount present value of a series of deposits

future value of a series of deposits

Increased consumer spending will usually cause: lower consumer prices. reduced employment levels. lower tax revenues. lower interest rates. higher employment levels.

higher employment levels

An example of a long-term goal for a young couple may be: a new car. reduction of amounts owed on credit cards. increased savings. income for retirement. funds for a vacation.

income for retirement.

Taxable income is used to compute a person's: exemptions. income tax. deductions. capital gains. exclusions.

income tax

Which of the following is an example of an industrial trend that could affect the job market? increased use of computers in manufacturing fewer children being born higher interest rates lower inflation rates affecting spending more families with both parents working

increased use of computers in manufacturing

An advantage of U.S. savings bonds is: interest earned is exempt from federal income taxes. a constant rate of earnings. interest earned is deferred for federal tax purposes. they can be converted to other types of investments.

interest earned is deferred for federal tax purposes.

An example of a tax-exempt investment is: interest on U.S. savings bonds. dividends from corporate stock. earnings from a mutual fund. interest on municipal bonds. interest on corporate bonds.

interest on municipal bonds.

A personal balance sheet presents: amounts budgeted for spending. income and expenses for a period of time. earnings on savings and investments. items owned and amounts owed. family financial goals.

items owned and amounts owed

A(n) ____________ is an employment position that is obtained mainly to earn money. career job internship apprenticeship cooperative experience

job

A VA-guaranteed loan program provides assistance to: military veterans. recent college graduates. low-income homebuyers. government employees. the elderly.

military veterans.

A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would: receive a refund of $3,975. owe $4,350. owe $375. receive a refund of $4,350. receive a refund of $375.

owe $375.

Kenton Greer wants to locate employment positions available in his area. This information would be best obtained from the Occupational Outlook Handbook. professional contacts. an informational interview. the Bureau of Labor Statistics. business and economic news reports.

professional contacts.

As Wally Quinten conducts an investigation of property value factors, most real estate experts tell him that ____________ most influences the housing values in an area. community pride style of homes zoning laws quality of schools age of neighborhood

quality of schools

The purpose of a selection interview is to: select the best applicants for further interviewing. obtain training information on a career area. question candidates for a job in detail. explore possible job opportunities in a career area. locate potential candidates for a position.

question candidates for a job in detail.

The ______________ property tax is based on the value of land and buildings. personal real estate direct proportional regressive

real estate

A __________________ endorsement is especially useful when you are depositing checks. blank restrictive common special documented

restrictive

Which of the following is an example of opportunity cost? renting an apartment near school saving money instead of taking a vacation setting aside money for paying income tax purchasing automobile insurance using a personal computer for financial planning

saving money instead of taking a vacation

A savings account at a credit union is called a ____________ account. share money market NOW club certificate

share

In the bank reconciliation process, service fees should be: added to the bank statement balance. subtracted from the bank statement balance. added to the checkbook balance. subtracted from the checkbook balance.

subtracted from the checkbook balance.

A ____________ résumé is designed to obtain a specific job. functional chronological goal-oriented targeted data

targeted

Samuel Jew has developed a budget that he follows each month. This is a budget that he keeps in his head. He does not write anything down, nor does he use a computer keep track of this budget. What type of budget has Samuel created? A mental budget A physical budget A written budget A computerized budget None of the above

A mental budget

Jonathan Wynn has developed a budget that he follows each month. Jonathan has an envelope for each type of expenditure. After he cashes his paycheck, he puts the amount of cash in each envelope that he plans to spend on that category each month. What type of budget has Jonathan created? A mental budget A physical budget A written budget A computerized budget None of the above

A physical budget