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Midterm 1) FP/101 What term is used to describe people beginning to spend their wealth in their retirement years? A. disposing B. deferring C. distributing D. decumulating 2) Which of the following would be considered a savings alternative? A. a debit card B. checking account C. certificate of deposit D. a NOW account 3) Which of the following is not included in a typical financial plan? A. A fund for financial emergencies B. A retirement plan C. A plan for protecting your assets with insurance D. A career plan 4) Which of the following is not normally considered an area of personal finance? A. investments B. budgeting C. retirement planning D. choice of a marriage partner 5) For the overall U.S. market, how is inflation measured? A. change in Consumer Price Index B. change in Producer Price Index C. change in GDP D. change in Wholesale Price Index 6) Which step in the financial planning process involves developing goals? A. Step 1 B. Step 2 C. Step 3 D. None of the Above 7) Which of the following is not one of the steps in the personal financial planning process? A. Identifying and evaluating alternative strategies for achieving goals B. Developing short-term and long-term financial goals C. Implementing a plan for achieving goals D. Determining appropriate risk level of participant 8) Preparing personal financial statements is part of which of the five steps of the financial planning process? A. Develop Goals B. Analyze Your Current Financial Position C. Establish and Implement Your Plan D. None of the above 9) Which of the following is an advantage of using a debit card? A. They free customers from carrying cash or checkbooks. B. They help control overspending. C. They cause an immediate electronic withdrawal from a bank account. D. They are not accepted at all retail stores. 10) Which federal agency insures bank deposits? A. FDIC B. Federal Reserve C. SEC D. FSLIC 11) Which of the following would be considered a transaction account? A. mutual fund account B. certificate of deposit C. savings account D. checking account 12) Which of the following would not be used to create a personal balance sheet? A. Slide presentation software B. Spreadsheet software C. Personal financial management software D. Pencil, paper, and calculator 13) Which of the following is included in a typical financial plan? A. A copy of your drivers license B. Photographs of your family C. A copy of your latest checking account reconciliation D. An estate plan, including a will 14) What is a personal cash flow statement? A. A document that uses the same information needed for the personal balance sheet. B. A document that is necessary for calculating one's net worth. C. A document that shows income and expenditures over a period of time. D. A document that shows income and expenditures at one specific point in time. 15) When you have a baby, which of the following should you do? A. Change your career. B. Review the consumer price index because you will need to buy things. C. Consider buying a larger home. D. Review how the change in your life situation affects your financial plan. 16) Who is the person that agrees to take responsibility for repayment of a loan the if primary borrower defaults? A. guarantor B. benefactor C. cosigner D. mentor 17) Which of the following is an advantage credit cards have over other forms of consumer credit? A. Cannot make remote payments B. Easier to return merchandise C. Loss of privacy D. Most expensive way to borrow 18) Which of the following is a disadvantage of credit cards but not of all consumer credit? A. Safety of not carrying cash B. Additional benefits, such as frequent flier miles C. Risk of fraud and identify theft D. Can be used as a method of identification A. Safety of not carrying cash 19) If you are a victim of credit card fraud or theft, your maximum liability for charges made without your authorization is ________, provided you report your loss promptly. A. $25 B. $100 C. $50 D. 0 20) Which of the following can be a reason for a lender to deny credit? A. Negative information in your credit report B. Stable job history (character) C. Consistency, cash, collateral, creativity, compounding D. Multiple properties to use as collateral 21) Which of the following is considered a cash outflow on your Personal Cash Flow Statement? A. Proceeds from the sale of a car B. Grocery spending C. Student loan funds D. Gambling winnings 22) Which of the following is not a type of consumer credit? A. Automobile loans B. Savings accounts C. Credit card accounts D. Student loans 23) What information is needed to steal your identity? A. A credit card number, expiration date, and address B. Your Social Security number, a credit card number, and birth date C. Your Social Security number, name, and address A. A credit card number, expiration date, and address D. A credit card number and Social Security number 24) What is the timeframe for removing negative credit information, with the exception of bankruptcies, from a credit report? A. after 5 years B. after 10 years C. after 7 years D. after 3 years 25) Which of the following is not one of the five C's of credit? A. capacity B. capital C. credibility D. conditions 26) Which of the following is a good reason to create a Personal Cash Flow Statement? A. To calculate your net worth B. To help with your estate plan by previewing your retirement savings C. To decide where to invest your money D. To evaluate the relationship between your income and expenditures 27) How much would you pay for a $50 Series EE savings bond (Patriot bond)? A. $25 B. $100 C. $75 D. $50 28) What are the five C's of credit? A. Credibility, character, consistency, capital, confidence B. Consistency, cash, collateral, creativity, compounding A. Credibility, character, consistency, capital, confidence C. Capacity, capital, collateral, character, conditions D. Capital, creativity, consistency, confluence, contacts 29) Where on your Personal Cash Flow Statement would you record money received when your rich uncle dies? A. As an asset on your Personal Balance Sheet B. In the cash inflow column C. It would not be included because it is exempt from taxes D. In the expenditures column 30) Which of the following FICO credit scoring factors is carries the greatest weight? A. recent credit activity B. variety of debt sources C. payment history D. debt ... View Full Document

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