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Claxton
Spring 2016
DUE: A-Day, 3/07/16
TAKE-HOME QUIZ: Chapter 3 and Chapter 5
Personal Financial Planning and Money Management
1. The trade-off when you make a choice is called
a. cost of choice
b. a financial goal
c. opportunity lost
d. opportunity cost
2. Future value is
a. the amount to which your original deposit will increase based on a certain interest rate and a certain amount of
time
b. the gross national product forecasted over a ten-year period
c. the current interest rate
d. the result of supply and demand
3. Inflation refers to
a. a balloon payment
b. a general rise in prices of goods and services
c. the rise in the price of a stock
d. the cost of intangible goods
4. The ability to easily convert your financial resources into cash without loss in value is called
a. inflation
b. compounding
c. liquidity
d. present value
5. A series of equal deposits is
a. serial deposits
b. an annuity
c. time deposits
d. annual deposits
6. Present value is
a. the amount spent to provide someone with a gift
b. last year’s inflation rate adjusted to today’s dollar
c. the amount of money you need to deposit now to attain a desired future amount
d. the current value of a past investment
7. Time value of money is best described as
a. an increase in an amount of money as a result of interest or dividends earned
b. what one hour of your time is worth in today’s dollars
c. the current value of the dollar
d. the amount of work time needed to make up for inflation
Claxton
Spring 2016
8. Which of the following is not part of the financial planning process?
a. determining your current financial situation
b. developing financial goals
c. acquiring consumable and durable goods on credit
d. identifying and evaluating alternative courses of action
9. The term used to define the price that is paid for the use of another’s money is
a. a price tag
b. money market value
c. interest
d. face value
10. The amount that your original deposit will be worth on a specific date, based on a specific interest rate over a
specific period of time is called
a. present value
b. increased value
c. future value
d. dollar value
11. A plan for using your income in a way that best meets your wants and needs
a. personal balance sheet
b. budget
c. cash flow statement
d. installment payments
12. Items of value that you own, including cash, real estate, personal possessions, and investments are
a. debts
b. assets
c. liabilities
d. net worth
13. Your net worth is the difference between your
a. liquid assets and your real estate’s market value
b. personal possession’s market value and your investment assets
c. assets and liabilities
d. current liabilities and long-term liabilities
14. Jewelry falls into the category of
a. liquid assets
b. personal possessions
c. real estate
d. 1investments
15. The condition that occurs when a person’s liabilities are greater than his or her assets is called
a. long-term liability
b. low cash flow
c. insolvency
d. bankruptcy
Claxton
Spring 2016
16. An example of cash outflow is
a. a paycheck
b. an allowance
c. interest on savings
d. a credit card payment
17. The amount of income left after taxes and other deductions are taken out of your paycheck is called
a. net pay
b. gross pay
c. discretionary income
d. cash flow
18. An example of a variable expense is
a. a mortgage payment
b. an auto insurance premium
c. school tuition
d. clothing purchases
19. Your budget shows a surplus when you
a. spend more money than budgeted on entertainment
b. receive a cut in pay
c. spend money budgeted for emergencies on car repairs
d. spend less than you earn
20. The key to establishing a sound financial future is to
a. increase your savings
b. keep track of every expense
c. buy whatever you want
d. run a budget deficit