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

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