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 less and buys less.
B.   is less useful as a medium of exchange.
C.   is more stable.
D.   is worth more and buys more.
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.   Accumulation of assets
B.   Retirement
C.   Investment
D.   Responsibility for others
E.   Change of employment
Question #3
Which of the following individual situations often leads to a reduction of both income and wealth?
A.   Investment
B.   Retirement
C.   Change of employment
D.   Accumulation of assets
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.   spend more.
C.   save more.
D.   work more.
E.   invest more.
Question #5
Personal finance is about all of the following processes EXCEPT
A.   acquiring and creating assets.
B.   preventing exposure to risks.
C.   protecting assets and wealth.
D.   managing income and wealth.
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.   FALSE
B.   TRUE
Question #7
An example of a non-discretionary expense shown on an income statement is
A.   education.
B.   taxes.
C.   food, clothing, and shelter.
D.   entertainment.
E.   gifts.
Question #8
A summary of income and expenses over a period of time is called
A.   a balance sheet.
B.   an income statement.
C.   a cash flow statement.
D.   net worth.
E.   a budget.
Question #9
Bankruptcy occurs when there is negative net worth or
A.   you default on a loan.
B.   debts are greater than assets.
C.   lots of gambling debts.
D.   there is postive net worth.
E.   debts are less than assets.
Question #10
The Accounting Equation states that
A.   Assets = Liabilities + Equity.
B.   Assets = Debt + Net Worth
C.   Assets – Debt = Net Worth.
D.   Assets + Debt = Liquidity
E.   Assets = Income – Cash Flows.

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