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

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