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MIDTERMS Flashcards

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1
Q
  1. What term describes the process of monitoring and adjusting your budget to ensure financial goals are met?
    a. Financial Forecasting
    b. Financial Flexibility
    c. Financial Tracking
    d. Financial Assessment
A

c. Financial Tracking

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2
Q
  1. Which type of investment carries the highest risk but also the potential for the highest returns?
    a. Savings Account
    b. Government Bonds
    c. Stocks
    d. Certificate of Deposit (CD)
A

c. Stocks

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3
Q
  1. What financial concept involves spreading investments across different asset classes to reduce risk?
    a. Risk Management
    b. Asset Allocation
    c. Market Diversification
    d. Portfolio Concentration
A

b. Asset Allocation

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4
Q
  1. What is the term for the process of estimating the value of a property or asset?
    a. Appraisal
    b. Depreciation
    c. Valuation
    d. Assessment
A

a. Appraisal

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5
Q
  1. Which of the following is NOT a component of a typical credit score?
    a. Payment History
    b. Credit Utilization
    c. Marital Status
    d. Length of Credit History
A

c. Marital Status

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6
Q
  1. What is an asset acquired or money committed to earning income in the future called?
    a. Savings
    b. Investment
    c. Equities
    d. Bonds
A

b. Investment

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7
Q
  1. What are the first forms of money in the barter system?
    a. Crypto
    b. Bonds
    c. NFTs
    d. Agricultural commodities
A

d. Agricultural Commodities

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8
Q
  1. What characteristic of an investment makes it easily saleable or marketable?
    a. Safety
    b. Liquidity
    c. Risk
    d. Return
A

b. Liquidity

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9
Q
  1. Which investors are driven by the prospect of earning maximum returns and high profits?
    a. Risk-averse
    b. Risk-takers
    c. Neutral
    d. None of the above
A

b. Risk Takers

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10
Q
  1. What is an arrangement to receive cash, goods, or services now and pay for them in the future?
    a. Credit
    b. Budget
    c. Savings
    d. Investment
A

a. Credit

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11
Q
  1. Which is NOT an advantage of consumer credit?
    a. Enables people to enjoy goods and services now
    b. Allows people to shop and travel without cash
    c. Gives consumers a temptation to overspend
    d. Indicates stability and good credit history
A

c. Gives consumers a temptation to overspend

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12
Q
  1. What type of money is not backed by a physical commodity and is declared as legal tender by a government?
    a. Plastic Money
    b. Fiat Money
    c. Gold
    d. All of the above
A

b. Fiat Money

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13
Q
  1. Which type of insurance provides coverage for damage to your own vehicle in case of an accident?
    a. Health Insurance
    b. Life Insurance
    c. Home Insurance
    d. Auto Insurance
A

d. Auto Insurance

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14
Q
  1. What is the maximum amount of money that an individual can invest in a tax-advantaged retirement account (e.g., 401(k)) in 2023?
    a. $5,000
    b. $10,000
    c. $19,500
    d. $50,000
A

c. $19,500

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15
Q

What type of tax is levied on the income you earn from investments, such as interest, dividends, and capital gains?
a. Sales Tax
b. Property Tax
c. Income Tax
d. Investment Tax

A

d. Investment Tax

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16
Q

Which of the following best describes a bear market?
a. A market with rising stock prices
b. A market with falling stock prices
c. A market with stable stock prices
d. A market with no stock trading

A

b. A market with falling stock prices

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17
Q

In financial planning, what does the term “ROI” stand for?
a. Return on Investment
b. Rate of Interest
c. Risk of Inflation
d. Revenue from Operations

A

a. Return on Investment

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18
Q

What is the primary function of a financial advisor?
a. Providing tax advice
b. Selling insurance policies
c. Helping clients achieve their financial goals
d. Managing government budgets

A

c. Helping clients achieve their financial goals

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19
Q

Which of the following is considered a short-term financial goal?
a. Saving for retirement
b. Buying a house in five years
c. Paying off credit card debt
d. Funding a child’s college education

A

c. Paying off credit card debt

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20
Q

What is the term for an investment strategy that involves buying a diversified portfolio of stocks and holding them for the long term?
a. Day Trading
b. Swing Trading
c. Buy and Hold
d. Options Trading

A

c. Buy and Hold

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21
Q

What type of tax is typically used to fund local government services like schools and roads?
a. Federal Income Tax
b. State Sales Tax
c. Property Tax
d. Capital. Gains Tax

A

c. Property Tax

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22
Q
  1. Which of the following is a key component of a comprehensive estate plan?
    a. Creating a will
    b. Opening a savings account
    c. Buying life insurance
    d. Investing in stocks
A

a. Creating a will

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23
Q
  1. What term describes a sudden and significant increase in the overall price level of goods and services?
    a. Inflation
    b. Deflation
    c. Stagflation
    d. Recession
A

a. Inflation

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24
Q
  1. What is the primary purpose of a 529 college savings plan?
    a. Funding retirement
    b. Paying off credit card debt
    c. Saving for a child’s education
    d. Investing in real estate
A

c. Saving for a child’s education

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25
Q

Which of the following is an example of a fixed expense?
a. Grocery bills
b. Rent or mortgage
c. Entertainment expenses
d. Dining out at restaurants

A

b. Rent or mortgage

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26
Q
  1. What is the term for the interest rate that central banks charge commercial banks for borrowing money?
    a. Mortgage Rate
    b. Prime Rate
    c. Inflation Rate
    d. Exchange Rate
A

b. Prime Rate

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27
Q

Which of the following investments is considered the most liquid?
a. Real Estate
b. Gold
c. Treasury Bonds
d. Cash

A

d. Cash

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28
Q
  1. In the context of insurance, what is a “deductible”?
    a. The amount you pay out of pocket before insurance coverage kicks in
    b. The premium you pay for insurance
    c. The maximum coverage amount of an insurance policy
    d. The time period during which insurance is in effect
A

a. The amount you pay out of pocket before insurance coverage kicks in

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29
Q

What type of tax is imposed on the transfer of assets from one person to another upon the death of the asset owner?
a. Income Tax
b. Sales Tax
c. Estate Tax
d. Property Tax

A

c. Estate Tax

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30
Q
  1. What is the term for the process of regularly setting aside a portion of your income for future use?
    a. Saving
    b. Investing
    c. Spending
    d. Borrowing
A

a. Savings

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31
Q

Which of the following is a characteristic of a good financial plan?
a. Flexibility to adapt to changing circumstances
b. Immediate wealth accumulation
c. High-risk investments
d. No need for periodic assessment

A

a. Flexibility to adapt to changing

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32
Q

What is the term for an investment strategy that involves buying and holding a mix of assets designed to meet specific financial goals?
a. Dollar-Cost Averaging
b. Asset Allocation
c. Risk Tolerance
d. Short Selling

A

b. Asset Allocation

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33
Q

What term describes the process of monitoring and adjusting your budget to ensure financial goals are met?
a. Financial Forecasting
b. Financial Flexibility
c. Financial Tracking
d. Financial Assessment

A

c. Financial Tracking

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34
Q

Which type of investment carries the highest risk but also the potential for the highest returns?
a. Savings Account
b. Government Bonds
c. Stocks
d. Certificate of Deposit (CD)

A

c. Stocks

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35
Q

What is the term for the process of estimating the value of a property or asset?
a. Appraisal
b. Depreciation
c. Valuation
d. Assessment

A

a. Appraisal

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36
Q

Which of the following is NOT a component of a typical credit score?
a. Payment History
b. Credit Utilization
c. Marital Status
d. Length of Credit History

A

c. Marital Status

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37
Q

Which of the following is a key component of a comprehensive estate plan?
a. Creating a will
b. Opening a savings account
c. Buying life insurance
d. Investing in stocks

A

a. Creating a will

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38
Q

What term describes a sudden and significant increase in the overall price level of goods and services?
a. Inflation
b. Deflation
c. Stagflation
d. Recession

A

a. Inflation

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39
Q

Which of the following is an example of a fixed expense?
a. Grocery bills
b. Rent or mortgage
c. Entertainment expenses
d. Dining out at restaurants

A

b. Rent or mortgage

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40
Q

Which of the following investments is considered the most liquid?
a. Real Estate
b. Gold
c. Treasury Bonds
d. Cash

A

d. Cash

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41
Q

In the context of insurance, what is a “deductible”?
a. The amount you pay out of pocket before insurance coverage kicks in
b. The premium you pay for insurance
c. The maximum coverage amount of an insurance policy
d. The time period during which insurance is in effect

A

a. The amount you pay out of pocket before insurance coverage kicks in

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42
Q

What type of tax is imposed on the transfer of assets from one person to another upon the death of the asset owner?
a. Income Tax
b. Sales Tax
c. Estate Tax
d. Property Tax

A

c. Estate Tax

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43
Q

Which of the following is a characteristic of a good financial plan?
a. Flexibility to adapt to changing circumstances
b. Immediate wealth accumulation
c. High-risk investments
d. No need for periodic assessment

A

a. Flexibility to adapt to changing circumstances

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44
Q

What is the term for the process of regularly setting aside a portion of your income for future use?
a. Saving
b. Investing
c. Spending
d. Borrowing

A

a. Saving

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45
Q

What term describes a situation where your total debts exceed your total assets?
a. Financial Stability
b. Debt-Free
c. Insolvency
d. Asset Allocation

A

c. Insolvency

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45
Q

What is the term for an investment strategy that involves buying and holding a mix of assets designed to meet specific financial goals?
a. Dollar-Cost Averaging
b. Asset Allocation
c. Risk Tolerance
d. Short Selling

A

b. Asset Allocation

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46
Q

What is the term for a sudden and unexpected event that can negatively impact your finances, such as a medical emergency or natural disaster?
a. Windfall
b. Emergency Fund
c. Asset Allocation
d. Liability

A

b. Emergency Fund

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47
Q

What type of insurance provides coverage for damage to someone else’s property or injuries caused by you or your property?
a. Health Insurance
b. Liability Insurance
c. Homeowners Insurance
d. Disability Insurance

A

b. Liability Insurance

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48
Q

Which of the following is an advantage of using a credit card for purchases?
a. It allows you to spend beyond your means
b. It can help build a positive credit history
c. It has higher interest rates than loans
d. It does not require monthly payments

A

b. It can help build a positive credit history

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49
Q

What is the term for the percentage of your income that goes toward paying off debts, such as loans and credit cards?
a. Credit Score
b. Debt-to-Income Ratio
c. Interest Rate
d. Collateral

A

b. Debt-to-Income Ratio

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50
Q

Which type of insurance provides coverage for damage to your own vehicle in case of an accident?
a. Health Insurance
b. Life Insurance
c. Home Insurance
d. Auto Insurance

A

d. Auto Insurance

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51
Q
  1. You earn from investments, such as interest, dividends, and capital gains?
    a. Sales Tax
    b. Property Tax
    c. Income Tax
    d. Investment Tax
A

d. Investment Tax

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52
Q

Which of the following best describes a bear market?
a. A market with rising stock prices
b. A market with falling stock prices
c. A market with stable stock prices
d. A market with no stock trading

A

b. A market with falling stock prices

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53
Q

In financial planning, what does the term “ROI” stand for?
a. Return on Investment
b. Rate of Interest
c. Risk of Inflation
d. Revenue from Operations

A

a. Return on Investment

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54
Q

What is the primary function of a financial advisor?
a. Providing tax advice
b. Selling insurance policies
c. Helping clients achieve their financial goals
d. Managing government budgets

A

c. Helping clients achieve their financial goals

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55
Q

Which of the following is considered a short-term financial goal?
a. Saving for retirement
b. Buying a house in five years
c. Paying off credit card debt
d. Funding a child’s college education

A

c. Paying off credit card debt

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56
Q

What is the primary purpose of a will in estate planning?
a. To avoid paying taxes on assets
b. To distribute assets according to your wishes c. To create a trust for future generations
d. To sell property at auction

A

b. To distribute assets according to your wishes

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57
Q

What is the term for a financial product that provides regular payments in retirement, typically purchased with a lump-sum payment?
a. Pension
b. Annuity
c. Mutual Fund
d. Treasury Bond

A

b. Annuity

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58
Q

What financial concept refers to the increase in an investment’s value over time?
a. Depreciation
b. Appreciation
c. Amortization
d. Deductible

A

b. Appreciation

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59
Q

In personal finance, what is the “Rule of 72” used for?
a. Calculating monthly
expenses
b. Estimating the time it takes for an investment to double in value
c. Determining credit card interest rates
d. Budgeting for retirement

A

b. Estimating the time it takes for an investment to double in value

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60
Q

What is the term for a legal agreement that allows someone else to manage your
financial affairs if you become unable to do so?
a. Power of Attorney
b. Living Will
c. Trust Deed
d. Probate

A

a. Power of Attorney

61
Q

Which of the following is a characteristic of a traditional 401(k) retirement
account?
a. Contributions are tax-deductible
b. Withdrawals in retirement are tax-
free
c. It is primarily for self-employed individuals
d. There are no contribution
limits

A

a. Contributions are tax-deductible

62
Q

What is the term for a financial institution that specializes in buying and selling
securities, such as stocks and bonds, on behalf of its clients?
a. Retail Bank
b. Investment Bank
c. Credit Union
d. Mutual Fund Company

A

b. Investment Bank

63
Q

What type of insurance can provide income replacement if you are unable to
work due to illness or injury?
a. Homeowners Insurance
b. Health Insurance
c. Disability Insurance
d. Auto Insurance

A

c. Disability Insurance

64
Q

Which of the following is an example of a variable expense?
a. Rent or mortgage
b. Grocery bills
c. Insurance premiums
d. Utility bills

A

b. Grocery bills

65
Q

What is the term for a diversified investment fund that pools money from many investors and is managed by a professional portfolio manager?
a. Hedge Fund
b. Exchange-Traded Fund (ETF)
c. Mutual Fund
d. Certificate of Deposit (CD)

A

c. Mutual Fund

66
Q

What is the term for the practice of buying an investment with borrowed money,
with the hope of making a profit?
a. Diversification
b. Leverage
c. Risk Aversion
d. Liquidation

A

b. Leverage

67
Q

What type of tax is levied on the transfer of wealth from one generation to another, typically upon inheritance?
a. Sales Tax
b. Property Tax
c. Gift Tax
d. Capital Gains Tax

A

c. Gift Tax

68
Q

What is the term for a loan that is backed by collateral, such as a house or car?
a. Unsecured Loan
b. Secured Loan
c. Personal Loan
d. Payday Loan

A

b. Secured Loan

69
Q

What financial document provides a summary of a person’s financial position at a specific point in time, listing assets, liabilities, and net worth?
a. Budget
b. Credit Report
c. Balance Sheet
d. Income Statement

A

c. Balance Sheet

70
Q

In personal finance, what is a “CD ladder” used for?
a. Climbing out of debt
b. Managing credit card payments
c. Diversifying investments
d. Maximizing the return on savings

A

d. Maximizing the return on savings

71
Q

What is the term for the rate at which the general level of prices for goods and
services rises, causing purchasing power to fall?
a. Interest Rate
b. Inflation Rate
c. Exchange Rate
d. Prime Rate

A

b. Inflation Rate

72
Q

Which of the following is an example of a tax credit?
a. Sales Tax
b. Property Tax
c. Child Tax Credit
d. Income Tax

A

c. Child Tax Credit

73
Q

What is the term for a type of investment that represents ownership in a
company and gives the investor a share of that company’s earnings and assets?
a. Bond
b. Mutual Fund
c. Stock
d. Certificate of Deposit (CD)

A

c. Stock

74
Q

What financial concept refers to spreading investments across a wide variety of assets to reduce risk?
a. Concentrated Portfolio
b. Diversification
c. Leverage
d. Speculation

A

b. Diversification

75
Q

Which of the following is NOT a component of a typical credit report?
a. Credit Score
b. Credit History
c. Social Security Number
d. Open Credit Accounts

A

c. Social Security Number

76
Q

What is the term for money earned or received in a certain period?
a. Expense
b. Income
c. Investment
d. Savings

A

b. Income

77
Q

Which term refers to the ability to understand and effectively use various financial skills?
a. Financial Literacy
b. Financial Knowledge
c. Financial Planning
d. Personal Finance

A

a. Financial Literacy

78
Q

How can a monthly budget help achieve financial security?
a. By choosing stocks likely to increase in price
b. By reducing unexpected maintenance expenses
c. By increasing credit card limits
d. By increasing financial awareness and fund allocation

A

d. By increasing financial awareness and fund allocation

79
Q

Where is the best place to set funds aside for “surprise” expenditures?
a. The stock market
b. Bitcoins
c. A savings account
d. Ownership of real estate

A

c. A savings account

80
Q

What term refers to an estimation of revenue and expenses over a specified
future period of time?
a. Budgeting
b. Personal Finance
c. Wealth Management
d. Investing

A

a. Budgeting

81
Q

Which action does NOT help increase savings?
a. Cutting down on unnecessary
expenses
b. Seeking additional sources of income
c. Impulsive buying
d. Investinga portion of income wisely

A

c. Impulsive buying

82
Q

What might happen if you don’t have a budget?
a. You become more aware of your financial situation.
b. You’ll be prepared for any emergency.
c. You’ll accumulate large savings and investments.
d. You may accumulate debts.

A

d. You may accumulate debts.

83
Q

What is the practice of putting together a plan for managing finances and preparing for potential costs and issues in the future?
a. Budgeting
b. Borrowing
c. Earning
d. Financial Planning

A

d. Financial Planning

84
Q

What is the key benefit of creating a financial plan?
a. Immediate investment return
b. Increase consumer credit score
c. Guaranteed wealth accumulation
d. Better control of financial goals

A

d. Better control of financial goals

85
Q

What involves arranging the management and distribution of assets upon one’s
death?
a. Estate Planning
b. Retirement Planning
c. Tax Planning
d. Risk Management

A

a. Estate Planning

86
Q

What is diversification in investing?
a. Putting all your money into a single stock
b. Spreading investments across different assets
c. Investing in a single sector exclusively
d. Avoiding the stock market entirely

A

b. Spreading investments across different assets

87
Q

Which investment type is typically considered the least risky?
a. Bonds
b. Venture Capital Investment
c. Stocks
d. Real estate

A

a. Bonds

88
Q

What are costs for items or resources that are used up or consumed in daily living
called?
a. Income
b. Expenses
c. Insurance
d. Fees

A

b. Expenses

89
Q

What is a system of value that facilitates the exchange of goods in an economy?
a. Credit
b. Bitcoin
c. Money
d. Savings

A

c. Money

90
Q

How is net worth calculated?
a. Total income - Total expenses
b. Total assets - Total liabilities
c. Total savings + Total investments
d. Total assets + Total liabilities

A

b. Total assets - Total liabilities

91
Q

Which action does NOT help build a good credit history?
a. Paying all bills promptly
b. Establishing a steady work record
c. Avoiding bouncing checks
d. Paying credit card balances beyond the due date

A

d. Paying credit card balances beyond the due date

92
Q

What is the term for the loss of capital, delay in repayment, non-payment of
interest, or variability in the returns of an investment?
a. Risk
b. Liquidity
c. Investing
d. Gambling

A

a. Risk

93
Q

Which of the following is NOT a fixed monthly expense?
a. Insurance premiums
b. Loan payments
c. Subscription services
d. Transportation

A

d. Transportation

94
Q

What is the imposition of compulsory levies on individuals or entities by governments called?
a. Budgeting
b. Taxation
c. Revenue Generation
d. Final Duties

A

b. Taxation

95
Q

Which of the following is NOT a purpose of taxation?
a. Resource allocation
b. Income redistribution
c. Stabilization
d. All of the above are correct.

A

d. All of the above are correct.

96
Q

What is the primary purpose of creating a budget?
a. To limit spending on non-essential items
b. To track and manage income and expenses
c. To maximize investment returns
d. To eliminate all debt

A

b. To track and manage income and expenses

96
Q

What is the Philippine government agency in charge of collecting taxes?
a. Bureau of Internal Regulation
b. Bureau of Internal Revenue
c. Bureau of Intelligence Regulation
d. None of the above

A

b. Bureau of Internal Revenue

97
Q

What term describes a budget that accounts for all sources of income and all
expenses, including discretionary spending?
a. Comprehensive Budget
b. Emergency Budget
c. Basic Budget
d. Fixed Budget

A

a. Comprehensive Budget

98
Q

Which of the following is a common budgeting method that allocates a specific
amount of money to each spending category?
a. Zero-Based Budgeting
b. Envelope Budgeting
c. Flexible Budgeting
d. Static Budgeting

A

b. Envelope Budgeting

99
Q

What does the “50/30/20 rule” in budgeting suggest?
a. Allocate 50% of income to savings, 30% to needs, and 20% to wants
b. Spend 50% of income on essentials, 30% on entertainment, and 20% on vacations
c. Dedicate 50% of income to housing, 30% to transportation, and 20% to groceries
d. Save 50% of income, invest 30%, and allocate 20% to charity

A

a. Allocate 50% of income to savings, 30% to needs, and 20% to wants

100
Q

What term describes a budget category that includes expenses that vary from
month to month, such as groceries or entertainment?
a. Fixed Expenses
b. Irregular Expenses
c. Discretionary Expenses
d. Variable Expenses

A

d. Variable Expenses

101
Q

Which of the following is an example of a fixed expense in a budget?
a. Dining out
b. Groceries
c. Rent or mortgage payment
d. Movie tickets

A

c. Rent or mortgage payment

102
Q

What is the purpose of a sinking fund in budgeting?
a. To save for a future purchase or expense
b. To cover daily living expenses
c. To invest in the stock market
d. To pay off high-interest debt

A

a. To save for a future purchase or expense

103
Q

In budgeting, what does “YOY” stand for?
a. Year of Yield
b. Year on Year
c. Year of Yachts
d. Year of Yielding

A

b. Year on Year

104
Q

What is the recommended frequency for reviewing and adjusting a budget?
a. Quarterly
b. Annually
c. Monthly
d. Biannually

A

c. Monthly

105
Q

In budgeting, what does “discretionary income” refer to?
a. Income that can be spent however you like
b. Income that must be used for essential expenses
c. Income that is automatically deducted for taxes
d. Income that is fixed and cannot be changed

A

a. Income that can be spent however you like

106
Q

What term describes the process of comparing your actual expenses to your
budgeted expenses?
a. Budgeting Analysis
b. Expense Evaluation
c. Budget Reconciliation
d. Financial Audit

A

c. Budget Reconciliation

107
Q

Which budgeting approach involves assigning every dollar of your income to a
specific category, leaving no money unallocated?
a. Zero-Based Budgeting
b. Incremental Budgeting
c. Rolling Budgeting
d. Top-Down Budgeting

A

a. Zero-Based Budgeting

108
Q

What is the primary advantage of using budgeting software or apps?
a. They automatically generate income
b. They eliminate the need for budgeting
altogether
c. They can automate tracking and categorizing expenses
d. They provide investment advice

A

c. They can automate tracking and categorizing expenses

109
Q

What term describes the process of
reducing expenses to the bare minimum in
response to a financial crisis or emergency? a. Comprehensive Budgeting
b. Austerity Budgeting
c. Dynamic Budgeting
d. Basic Budgeting

A

b. Austerity Budgeting

110
Q

Which budgeting method involves allocating a fixed percentage of your income to specific categories, such as savings or housing?
a. Envelope Budgeting
b. Percentage Budgeting
c. Incremental Budgeting
d. Dynamic Budgeting

A

b. Percentage Budgeting

111
Q

What is the term for a budget category that includes required, recurring expenses, such as rent or mortgage payments?
a. Flexible Expenses
b. Variable Expenses
c. Fixed Expenses
d. Discretionary Expenses

A

c. Fixed Expenses

112
Q

What is the first step in creating a budget? a. Tracking current expenses
b. Setting financial goals
c. Allocating funds to savings
d. Paying off all debts

A

b. Setting financial goals

113
Q

Which of the following statements about budgeting is true?
a. Budgeting restricts your financial freedom.
b. A budget must be rigid and unchangeable.
c. Budgeting can help you achieve financial goals.
d. Budgeting is only necessary for people with high incomes.

A

c. Budgeting can help you achieve financial goals.

114
Q

What is the primary goal of a budget for most individuals and families?
a. To eliminate all discretionary spending
b. To maximize investment returns
c. To achieve financial stability and security d. To accumulate debt for future
investments

A

c. To achieve financial stability and security

115
Q

What is the primary purpose of creating a budget?
* a. To limit spending on non-essential items
* b. To track and manage income and expenses
* c. To maximize investment returns
* d. To eliminate all debt

A

b. To track and manage income and expenses

116
Q

What term describes a budget that accounts for all sources of income and
all expenses, including discretionary spending?
a. Comprehensive Budget
b. Emergency Budget
c. Basic Budget
d. Fixed Budget

A

a. Comprehensive Budget

117
Q

What does the “50/30/20 rule” in budgeting suggest?
a. Allocate 50% of income to savings, 30% to needs, and 20% to wants
b. Spend 50% of income on essentials, 30% on entertainment, and 20% on
vacations
c. Dedicate 50% of income to housing, 30% to transportation, and 20% to
groceries
d. Save 50% of income, invest 30%, and allocate 20% to charity

A

a. Allocate 50% of income to savings, 30% to needs, and 20% to wants

117
Q

What term describes a budget category that includes expenses that vary from month to month, such as groceries or entertainment?
a. Fixed Expenses
b. Irregular Expenses
c. Discretionary Expenses
d. Variable Expenses

A

d. Variable Expenses

117
Q

Which of the following is a common budgeting method that allocates a
specific amount of money to each spending category?
* a. Zero-Based Budgeting
* b. Envelope Budgeting
* c. Flexible Budgeting
* d. Static Budgeting

A

b. Envelope Budgeting

118
Q

Which of the following is an example of a fixed expense in a budget?
* a. Dining out
* b. Groceries
* c. Rent or mortgage payment
* d. Movie tickets

A

c. Rent or mortgage payment

119
Q

What is the purpose of a sinking fund in budgeting?
* a. To save for a future purchase or expense
* b. To cover daily living expenses
* c. To invest in the stock market
* d. To pay off high-interest debt

A

a. To save for a future purchase or expense

120
Q

In budgeting, what does “YOY” stand for?
* a. Year of Yield
* b. Year on Year
* c. Year of Yachts
* d. Year of Yielding

A

b. Year on Year

121
Q

What is the recommended frequency for reviewing and adjusting a budget?
a. Quarterly
* b. Annually
* c. Monthly
* d. Biannually

A

c. Monthly

122
Q

In budgeting, what does “discretionary income” refer to?
* a. Income that can be spent however you like
* b. Income that must be used for essential expenses
* c. Income that is automatically deducted for taxes
* d. Income that is fixed and cannot be changed

A

a. Income that can be spent however you like

123
Q

What term describes the process of comparing your actual expenses to
your budgeted expenses?
* a. Budgeting Analysis
* b. Expense Evaluation
* c. Budget Reconciliation
* d. Financial Audit

A

c. Budget Reconciliation

124
Q

Which budgeting approach involves assigning every dollar of your income
to a specific category, leaving no money unallocated?
* a. Zero-Based Budgeting
* b. Incremental Budgeting
* c. Rolling Budgeting
* d. Top-Down Budgeting

A

a. Zero-Based Budgeting

125
Q

What is the primary advantage of using budgeting software or apps?
* a. They automatically generate income
* b. They eliminate the need for budgeting altogether
* c. They can automate tracking and categorizing expenses
* d. They provide investment advice

A

c. They can automate tracking and categorizing expenses

126
Q

Which budgeting method involves allocating a fixed percentage of your
income to specific categories, such as savings or housing?
a. Envelope Budgeting
* b. Percentage Budgeting
* c. Incremental Budgeting
* d. Dynamic Budgeting

A

b. Percentage Budgeting

127
Q

What is the term for a budget category that includes required, recurring expenses, such as rent or mortgage payments?
* a. Flexible Expenses
* b. Variable Expenses
* c. Fixed Expenses
* d. Discretionary Expenses

A

c. Fixed Expenses

128
Q

What is the first step in creating a budget?
* a. Tracking current expenses
* b. Setting financial goals
* c. Allocating funds to savings
* d. Paying off all debts

A

b. Setting financial goals

129
Q

Which of the following statements about budgeting is true?
* a. Budgeting restricts your financial freedom.
* b. A budget must be rigid and unchangeable.
* c. Budgeting can help you achieve financial goals.
* d. Budgeting is only necessary for people with high incomes.

A

c. Budgeting can help you achieve financial goals.

130
Q

Name four common types of insurance policies.

A

LIFE INSURANCE
HEALTH INSURANCE
AUTO INSURANCE
HOMEOWNERS INSURANCE

131
Q

Enumerate three key components of a comprehensive financial plan.

A
  1. Budgeting and expense management
  2. Investment strategy
  3. Retirement planning
132
Q

List five common sources of income for individuals or households.

A
  1. Salary or wages
  2. Rental income
  3. Dividends from investments
  4. Social Security benefits
  5. Business income
133
Q

Name three types of financial institutions where you can open a savings account.

A
  1. Banks
  2. Credit unions
  3. Online banks
134
Q

Name two reasons why budgeting is important.

A
  1. To know how to efficiently allocate your funds.
  2. To increase your savings.
135
Q

List three examples of Life Insurance companies in the Philippines.

A
  1. AXA
  2. Sunlife
  3. Pru-life
  4. BDO
  5. BPI
136
Q

Enumerate two examples of E-wallets used conveniently in the Philippines.

A
  1. Gcash
  2. Maya
137
Q

What are the two types of expenses?

A
  1. Fixed expenses
  2. Variable expenses
138
Q

Name four common asset classes used in investment diversification.

A

i. Stocks
ii Bonds
iii. Real estate
iv. Commodities

139
Q

Enumerate three factors that can affect the liquidity of an investment.

A

Economic condition, Market Demand, Investment type

140
Q

List five factors to consider when setting financial goals.

A

i. Specificity
ii. Measurability
iii. Achievability
iv. Relevance
v. Time-bound

141
Q

Enumerate three key components of an emergency fund.

A

i. Cash savings
ii. Liquid assets
iii. Adequate reserve for unexpected expenses

142
Q

Name four common asset classes used in investment diversification.

A

i. Stocks ii. Bonds iii. Real estate iv. Commodities

143
Q

Name five common categories in a typical monthly budget.

A
  1. Housing (rent or mortgage)
  2. Food (groceries and dining out)
  3. Transportation (car expenses, public transit)
  4. Utilities (electricity, water, internet)
  5. Entertainment and leisure
144
Q

List five types of investment vehicles.

A
  1. Stocks
  2. Bonds
  3. Mutual funds
  4. Real estate
  5. Exchange-Traded Funds (ETFs)
145
Q

Name three factors that can affect your credit score.

A
  1. Payment history
  2. Credit utilization
  3. Length of credit history
146
Q

Give two reasons why budgeting is important.

A
  1. To know how to efficiently allocate your funds.
  2. To increase your savings.

Personal Finance (1 decks)

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