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.
is worth more and buys more.
B.
is worth less and buys less.
C.
is less useful as a medium of exchange.
D.
is more stable.
E.
has less purchasing power.
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.
Investment
C.
Retirement
D.
Accumulation of assets
E.
Responsibility for others
Question #3
Which of the following individual situations often leads to a reduction of both income and wealth?
A.
Change of employment
B.
Investment
C.
Accumulation of assets
D.
Retirement
E.
Responsibility for others
Question #4
If you had a budget deficit, the best way to reduce it among the following choices would be to
A.
borrow more.
B.
save more.
C.
invest more.
D.
spend more.
E.
work more.
Question #5
Personal finance is about all of the following processes EXCEPT
A.
preventing exposure to risks.
B.
protecting assets and wealth.
C.
acquiring and creating assets.
D.
creating income and wealth.
E.
managing 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.
entertainment.
C.
gifts.
D.
education.
E.
taxes.
Question #8
A summary of income and expenses over a period of time is called
A.
a balance sheet.
B.
a budget.
C.
a cash flow statement.
D.
an income statement.
E.
net worth.
Question #9
Bankruptcy occurs when there is negative net worth or
A.
debts are less than assets.
B.
there is postive net worth.
C.
debts are greater than assets.
D.
you default on a loan.
E.
lots of gambling debts.
Question #10
The Accounting Equation states that
A.
Assets = Liabilities + Equity.
B.
Assets – Debt = Net Worth.
C.
Assets + Debt = Liquidity
D.
Assets = Income – Cash Flows.
E.
Assets = Debt + Net Worth
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