Course Test - Foundations in Personal Finance PDF

Course Test MULTIPLE CHOICE Circle the letter next to the correct answer. o 1. To gain an understanding of your personal finances, you should know... A. Your financial goals C. How much income you have B. Where you stand financially, how m...

Course Test MULTIPLE CHOICE Circle the letter next to the correct answer. o 1. To gain an understanding of your personal finances, you should know... A. Your financial goals C. How much income you have B. Where you stand financially, how much D. Your investment portfolio and your financial income you have, what goals you want to advisors’ contact information set, and how you’ll reach those goals 2. Avoiding debt can give you financial peace and a sense of hope for the future. A. True B. False 3. Why is tracking your expenses throughout the month important? A. It allows you to delete categories you C. It helps you pull money from your savings to don’t like. spend in other categories. B. It gives you insight into whether you’re D. It really isn’t that important in the long run. sticking to the budget you set. 4. Why is budgeting so important? A. It’s a good way to make sure all your money C. It gives you control of your money and sets is spent by the end of the month. you up for financial success in the future. B. It helps you figure out the best way to justify D. It helps you brush up on your math skills. purchases that maybe aren’t necessary. 5. The main reasons you should save your hard-earned money are so you can... A. Cover emergencies, pay cash for large C. Buy gifts, donate to charities, and build up a purchases, and build wealth college fund for your kids B. Afford for your dream home, buy your dream D. Invest, indulge, and influence car, and go on your dream vacation 6. What is The First Foundation? A. Open a checking account. C. Build wealth and give. B. Save a $500 emergency fund. D. Pay cash for college. 7. Your monthly rent payment is an example of a variable expense. A. True B. False F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 1 O F 9 MULTIPLE CHOICE Circle the letter next to the correct answer. o 8. The first priority in your budget should be. A. Investing C. Spending B. Saving D. Giving 9. Why do some accounts, like saving accounts at your local bank, earn interest? A. Because you deposit money, adding to your C. Because of inflation principal each month D. Because those accounts always have great B. Because the bank pays you for the use of your interest rates money. 10. Which two habits are the most important for building wealth and becoming a millionaire? A. Working a high-paying job and relying on a C. Consistently investing money and giving it trust fund time to grow B. Investing into the right stocks and using a D. Always paying off your credit card on time and private CPA putting extra money into a retirement account 11. What is The Second Foundation? A. Get out and stay out of debt. C. Pay cash for your car. B. Save a $500 emergency fund. D. Build wealth and give. 12. When you buy with credit, you typically spend more than you would with cash or a debit card. A. True B. False 13. Something that credit card commercials don’t show you is... A. People making payments for months or C. How happy your parents will be that they years on those credit card purchases don’t have to lend you cash anymore B. How much your credit score will grow D. How great your life will be with payments right away 14. When you finance a new car, you will end up paying more than the sticker price. A. True B. False 15. Creating a budget, having clear money goals, and slowing down to think through a purchase are all practices of a. A. College student C. Foolish consumer B. Wise consumer D. Free spirit F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 2 O F 9 MULTIPLE CHOICE Circle the letter next to the correct answer. o 16. Americans spend over $2,100 a year on. A. Impulse purchases C. Groceries and eating out B. Entertainment D. Credit card fees 17. The very best investment you can make is in. A. Yourself C. Real estate B. The stock market D. A new car 18. Job shadowing is a great way to gain experience in a career field. A. True B. False 19. Many employers will research job candidates’ social media posts. A. True B. False 20. Many service industries, including massage therapy, financial services, auto repair, electrical work, and plumbing, don’t require four-year degrees. A. True B. False 21. You can fund your education by finding the right mix of , , and. A. Cash; loans; grants C. Work; loans; cash B. Grants; scholarships; work D. Scholarships; trust funds; federal aid 22. Student loans are a type of “good” debt. A. True B. False 23. When deciding on the right bank for you, you should first identify what type of bank you want, the features that matter most to you, and. A. What kind of accounts you want C. How large your savings account is B. What type of home you want to own D. If you want to go to an Ivy League or someday community college 24. You need to track everything that involves money, including... A. Your clothing budget for the month C. All of the sales that are currently B. Debit card purchases, third-party app happening transactions, and ATM withdrawals D. The latest retail store credit card offers F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 3 O F 9 MULTIPLE CHOICE Circle the letter next to the correct answer. o 25. Insurance helps you transfer the from your bank account to the insurance company. A. Risk C. Insurance B. Money D. Health 26. Getting good grades, driving safely, and driving an older car are examples of ways you can... A. Lower your auto insurance costs C. Raise your monthly premiums B. Avoid getting into an accident D. Pass your driver’s ed test 27. Every American who earns an income must file a each year. A. Tax deduction C. Tax extension B. Paycheck D. Federal tax return 28. Using online tax software or hiring a tax professional are both good options depending on your situation. A. True B. False 29. What does cost of living refer to? A. How much of your monthly income is C. The level of wealth, comfort, material budgeted specifically for your rent or goods, and necessities available to a group mortgage of people B. The average cost of the basic goods and D. How wealthy or poor you are at the time of services needed to maintain a certain purchasing your first home standard of living 30. A leasing contract... A. Can be terminated at any time without any C. Is something a roommate owes taxes on fees or penalties when they move in with the current renter B. Is a legal document that allows the renter D. Should be signed immediately, even before (tenant) to use the property for a period of time reading it 31. When you invest in a mutual fund, you are contributing to a pool of money that will be... A. Given to hundreds of local charities in C. Taxed based on each individual investor’s your area annual salary B. Invested in a mix of stocks, bonds, and D. Put into a separate savings account for your money market accounts children to inherit someday F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 4 O F 9 MULTIPLE CHOICE Circle the letter next to the correct answer. o 32. is key when it comes to compound growth. A. Time C. Attitude B. Money D. Roth IRA 33. Inflation, deflation, the rate of economic growth, price levels, national income, changes in employment rates, and GDP are all called... A. Stock markets C. Developing countries B. Global economy D. Economic indicators 34. Economics is a study of consumer. A. Choices C. Supply B. Availability D. Demand F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 5 O F 9 SHORT ANSWER Use what you've learned in this chapter to answer these questions. o 35. Why is personal finance dependent on behavior? 36. What are some key components of successful budgeting? 37. How does planning and saving for your future help you build wealth? 38. List three ways the credit card industry makes money off of customers. 39. List some examples of how a thief would commit card fraud. F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 6 O F 9 SHORT ANSWER Use what you've learned in this chapter to answer these questions. o 40. What are two questions smart spenders ask before making a purchase? 41. What’s the difference between soft skills and hard skills? 42. List five non-college options available for postsecondary education. 43. Describe the process of balancing your checking account. 44. Explain the difference between gross income and net income. F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 7 O F 9 ESSAY QUESTIONS Use what you've learned in this chapter to answer these questions. o 45. Identify The Five Foundations and describe each of them. Then, evaluate how they will help you manage your money right now. 46. What are the main differences between saving and investing? 47. What is your current dream job? Explain why and how it fits with your talents, values, and passion. F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 8 O F 9 ESSAY QUESTIONS Use what you've learned in this chapter to answer these questions. o 48. Why is it important for students to think about what they want to do before pursuing a college education? What kind of education do you think is right for you, based on what you’re passionate about? 49. Why is it important to do The Five Foundations in order? 50. Explain how debt can hold someone back from living like no one else after retirement. F O U NDA TI O NS I N PERSONA L FI NA NCE | COURSE T EST PAGE 9 O F 9