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

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