Fin 008 - Personal Finance and Investments » Winter 2021 » Quiz 1

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Question #1
An effect of deflation is that your money
A.   has less purchasing power.
B.   is more stable.
C.   is worth more and buys more.
D.   is less useful as a medium of exchange.
E.   is worth less and buys less.
Question #2
Which of the following individual situations typically leads to increased income needs, reduced risk tolerance, and greater need for future income protection?
A.   Change of employment
B.   Accumulation of assets
C.   Retirement
D.   Responsibility for others
E.   Investment
Question #3
Which of the following individual situations often leads to a reduction of both income and wealth?
A.   Change of employment
B.   Responsibility for others
C.   Retirement
D.   Investment
E.   Accumulation of assets
Question #4
If you had a budget deficit, the best way to reduce it among the following choices would be to
A.   work more.
B.   borrow more.
C.   invest more.
D.   save more.
E.   spend more.
Question #5
Personal finance is about all of the following processes EXCEPT
A.   protecting assets and wealth.
B.   managing income and wealth.
C.   acquiring and creating assets.
D.   preventing exposure to risks.
E.   creating income and wealth.
Question #6
Personal finance is about learning how to get what you want and how to protect what you've got.
A.   TRUE
B.   FALSE
Question #7
An example of a non-discretionary expense shown on an income statement is
A.   food, clothing, and shelter.
B.   education.
C.   gifts.
D.   entertainment.
E.   taxes.
Question #8
A summary of income and expenses over a period of time is called
A.   an income statement.
B.   a cash flow statement.
C.   a budget.
D.   a balance sheet.
E.   net worth.
Question #9
Bankruptcy occurs when there is negative net worth or
A.   debts are greater than assets.
B.   there is postive net worth.
C.   lots of gambling debts.
D.   you default on a loan.
E.   debts are less than assets.
Question #10
The Accounting Equation states that
A.   Assets = Debt + Net Worth
B.   Assets – Debt = Net Worth.
C.   Assets + Debt = Liquidity
D.   Assets = Liabilities + Equity.
E.   Assets = Income – Cash Flows.

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