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

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