Question 1

Which of the following statements is usually true about individuals who are financially literate?

Accepted Answer

They understand the basics of personal finance & money management.

Answer

They achieve all of their financial goals.

Answer

They almost always choose stocks and bonds that increase in value.

Answer

They have high debt and low savings.

Question 2

Goals:

Accepted Answer

need to be realistic, have a target date, and, if possible, an associated cost.

Answer

are generally the same for middle class families.

Answer

need to reflect current income.

Answer

remain the same year after year, throughout life.

Question 3

A good example of a well-stated financial goal is:

Accepted Answer

pay off $5,000 in credit card debt in two years.

Answer

buy a house.

Answer

become financially independent.

Answer

buy a $25,000 car.

Question 4

Financial planning helps individuals to:

Accepted Answer

have strategies for saving and investing.

Answer

guarantee future income.

Answer

achieve all goals by set target dates.

Answer

eliminate risk on investments.

Question 5

Julian is a single, recent college graduate who just got his first full-time job.  Which of the following should be his first financial goal?

Accepted Answer

establishing a fund for emergencies.

Answer

buying a life insurance policy.

Answer

buying a house.

Answer

creating a stock portfolio.

Question 6

Which of the following will help you the LEAST in managing your money?

Accepted Answer

get advice from your friends.

Answer

pay your rent/mortgage payment and utility bills on time.

Answer

plan ahead for large expenses, shop with a list, and resist impulse buying.

Answer

set goals and keep a budget for your net income.

Question 7

You want to gain control over your income and spending so that you will be able to save money.  Which step will help you the most?

Accepted Answer

developing a budget.

Answer

developing a retirement plan.

Answer

applying for a loan.

Answer

getting advice from a friend.

Question 8

Electricity and food expenditures are:

Accepted Answer

variable expenses that change from one period to another.

Answer

discreet expenses that do not have to be paid monthly.

Answer

fixed expenses that remain the same from one period to another.

Answer

personal expenses for an individual or family.

Question 9

Discretionary income is:

Accepted Answer

the difference between your total income and your essential living expense.

Answer

a capital gain.

Answer

income and has been spent.

Answer

wages plus investment income.

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