Unit 1 Test

Question 1

Samantha wants to learn more about financial issues that can affect her life. She is learning about

Answer 1

Personal Finance

Question 2

The process will help George plan his financial future.

Answer 2

Personal Finacial Planning

Question 3

Leon used money from his savings account for a down payment on an ATV. Money in his savings account is an example of

Answer 3

liquid asset

Question 4

is a legal process filed when one is unable to pay their bills

Answer 4

bankruptcy

Question 5

Allison wanted to spend the evening at the movies with friends instead of working at the grocery store. With this decision she incurred an

Answer 5

opportunity cost

Question 6

The process of planning every aspect of your personal finances is known as

Answer 6

personal finacial planning

Question 7

Liquid assets are those possessions that can be rapidly converted to

Answer 7

cash

Question 8

All of the following are important in choosing a career except

Answer 8

gender

Question 9

Which of these would not be considered an expense item in a budget

Answer 9

tax return

Question 10

Good financial planning can help you achieve all of the following goals except

Answer 10

winning the lottery

Question 11

Tara wants to have financial success, so she develops a

Answer 11

personal finacial plan

Question 12

Clayton planned his spending and savings for the next three months by his money

Answer 12

budgeting

Question 13

Rafael added up his assets and subtracted his liabilities to determine his

Answer 13

net worth

Question 14

Lorenzo listed his motorcycle as an on his bank loan

Answer 14

asset

Question 15

Lorenzo also listed the remaining $1,500 he owes on his motorcycle as a

Answer 15

liability

Question 16

Susan has a car worth $6,000. She has paid off half of it so she has $3,000 in her car.

Answer 16

equity

Question 17

Sarah makes $1,200 per month at her job and receives $50 a month from her parents in allowance. The $1,250 she brings in each month is listed as in her budget

Answer 17

income

Question 18

Tamara needed $150 by next week to pay for a new warm up for basketball. She looked at her to determine her ability to pay for the warm up.

Answer 18

liquidity

Question 19

good would help Tamara be prepared for extra expenses like a new warm up.

Answer 19

money management

Question 20

Javier received a credit card application in the mail. His parents talked with him about good before he applied for the card

Answer 20

credit management

Question 21

Javier noticed that the credit card company charges 18% each month he is late to pay off his card.

Answer 21

interest

Question 22

Javier’s parents went over the of the credit card with him so that he would fully understand when he would need to pay the card off so that he didn’t have to pay interest.

Answer 22

payment terms

Question 23

Jeff bought the least insurance coverage on his car. He is taking a because if he gets in a wreck, he may have to pay a lot out of pocket.

Answer 23

risk

Question 24

Rachel had little savings, so she knew she would have to the purchase of her car.

Answer 24

finance

Question 25

is not a very liquid investment because it is not easy or always possible to sell buildings and land quickly.

Answer 25

real estate

Question 26

Assume you have a car worth $3,200 and investments worth another $7,500. If your only debt is $1,300 on a credit card payment, what is your current net worth?

Answer 26

$ 9,400

Question 27

How much does Jill have in liquid assets if her car is worth $4,500 and she has $1,110 in a savings account and $532 in a checking account?

Answer 27

$ 1,642

Question 28

If you buy a house for $250,000 and put $20,000 in initially on a down payment, how much equity do you have in the house?

Answer 28

$ 20,000

Question 29

Mike makes $75 a week mowing lawns, he decides in July that he wants to take 2 weeks off and go on a vacation that will cost him a total of $300. What is his opportunity cost? And what is his total cost of this decision?

Answer 29

Opportunity: $150 total:$450

Question 30

You have decided to save 30% of your income for the next two years. You bring home $200 a week, how much will you save over that time?

Answer 30

$6,240

Question 31

Which of the following is not a component of a financial plan?

Answer 31

utilities

Question 32

Net worth is the difference between

Answer 32

assets and liabilities

Question 33

Which of the following is not a source of income?

Answer 33

car payment

Question 34

A person’s income may depend on all of the following except:

Answer 34

height

Question 35

Consumers tend to spend the highest percentage of their budget on:

Answer 35

housing

Question 36

Assume you intend to borrow $5,000. Which of the following payment terms would be the best deal?

Answer 36

5 percent for 4 years

Question 37

Which of the following is a key component of risk management?

Answer 37

insurance

Question 38

In general, the higher risk of a particular investment the higher the potential

Answer 38

return

Question 39

The most common investments include

Answer 39

stocks and bonds

Question 40

Good record keeping is important for

Answer 40

estate planning