Personal Finance

It is a snapshot of what you have and what you owe at a given point in time.

• Personal Financial Statement
• Balance Sheet
• Accounting Sheet
• Financial Sheet

Costs for items or resources that are used up or consumed in the course of daily living are called __.

• EXPENSES

__ is long-term credit, or the ability to delay payment over several periods.

• DEBT

Affect your financial planning, especially through educational requirements, income potential, and characteristics of the occupation or profession you choose.

• Family Structure
• Age
• Career Choice
• Health

Items with economic value that can be converted to cash are ______.

• All of the Above
• Stock
• Assets
• Wages
• Salary

A special kind of annuity that goes on forever.

• PERPETUITY

Derives from the Latin verb credere (to believe).

• CREDIT

It generally occurs after the business cycle peaks, but before it becomes a trough.

• Peaks and Troughs
• Growth
• Peaks
• Contraction
• Growth and Contraction

Patterns that are developed by the price action experience by all securities.

• Growth and Contraction
• Boom and Bust
• Expansion and Correction
• Peaks and Troughs

Shows how successful an economy is at creating opportunities to sell labor and efficiently using its human resources.

• Growth Rate
• None of the Above
• Unemployment Rate
• Participation Rate of the Labor Force

Employment Rate is a measure of an economy’s shortcomings, because it shows the proportion of people who want to work but the economy can’t provide jobs.

• True
• False

It is what you earned or received in a given period.

• Salary
• Income
• Savings
• All of the Above
• Wages

The process of selling risk to someone who then assumes the risk and its consequences.

• RISK SHIFTING

Whatever the type of asset you choose, investing in assets or selling capital can be more profitable than selling labor.

• True
• False

__ sources of income in both the labor market and the capital markets is the best hedge against risks in any one market.

Financial management is about managing the financing for consumption and investment.

• True
• False

The percentage of income that is paid in tax increases as income rises. Those income categories are called __.

• TAX BRACKETS

A budget covering all aspects of financial life- will include a projection of recurring incomes and expenses and of nonrecurring expenditures.

• COMPREHENSIVE BUDGET

The cost of delayed consumption is largely derived from a subjective valuation of whatever is consumed, or its utility or satisfaction

• True
• False

When the economy tends to be cyclical, usually expanding but sometimes contacting it is called Business Cycle

• True
• False

Transactions are recognized only when cash is exchanged.

• None of the Above
• Accrual Accounting
• Cash Accounting
• Accounting Process

A budget covering all aspects of financial life will include a projection of recurring incomes and expenses and of nonrecurring expenditures.

• COMPREHENSIVE BUDGET

Financing assets through equity means not sharing ownership and whatever gains or losses that brings.

• True
• False

A __ for long-term goals involving nonrecurring items.

• capital budget

Help with financial planning, such as accountants, investment advisors, tax advisors, estate planners, or insurance agents.

• Agent
• None of the Above
• Creditor
• Financial Advisor

Understanding the calculations is not so important in understanding the relationships between time, risk, opportunity cost, and value.

• True
• False

The asset can create income, reduce expenses, and store wealth.

• True
• False

A part of the capital market, capital is loaned and borrowed rather than bought and sold.

• CREDIT MARKET

Refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.

• umbrella policy

Exist in markets where they can add value to your purchasing process, either by providing information in the prepurchase stage or by providing convenience during the purchase.

• Exist in markets where they can add value to your purchasing process, either by providing information in the prepurchase stage or by providing convenience during the purchase.
• Select one:
• Seller
• Middlemen
• Financial Advisor
• None of the Above
• Agents

__ is a process of management and planning that anticipates or keeps abreast with changes.

• PERSONAL FINANCE

Estate taxes are taxes on specific consumption items such as alcohol, cigarettes, motor vehicles, fuel, or highway use.

• True
• False

Covers your losses from anything other than a collision, such as theft, weather damage, acts of nature, or hitting an animal.

• Comprehensive physical damage

The rate at which time affects value is the rate at which value grows, or the rate at which your value compounds, it is called__.

• RATE OF COMPOUNDING

__ is one of the factors where in you should include some protection against the risk of chronic illness, accidents, pregnancy and birth in your personal financial planning.

• HEALTH

__ is where your income for a period is greater than the expenses.

• BUDGET SURPLUS

Seller must have good title free of “Clouds on title.”

• Demand
• Scarcity
• Transferability
• Utility

Unlike a price tag, opportunity cost is obvious.

• True
• False

Borrowing is renting someone else’s money for a period of time, and the result is…

• Money
• Principal
• Interest
• Debt

__ and Sunk Cost are hidden expenses that affect financial decision making.

• OPPORTUNITY COST

The sense of regret after having made a purchase. It is frequently associated with the purchase of an expensive item such as a vehicle or real estate is called buyer's remorse.

• True
• False

If the asset is worth more when it is resold than it was when it was bought, then you have earned a _________.

• CAPITAL GAIN
• NONE OF THE ABOVE
• BUDGET DEFICIT
• CAPITAL LOSS
• BUDGET SURPLUS

It t is about managing the financing for consumption and investment.

• FINANCIAL MANAGEMENT

__ is a part of capital market.

• CREDIT MARKET

An amount payable by the insured before any expenses are assumed by the insurer.

• Deductibles

Having not enough cash to provide your wants and needs is called __.

• BUDGET DEFICIT

Labor is traded through hiring or employment.

• LABOR MARKET

It is the cost of simply making the trade.

• TRANSACTION COST

Which of the following is the third step in budget process?

• Monitoring actual outcomes and analyzing variances
• Forming expectations and reconciling goals and data
• Defining goals and gathering data
• Creating the budget
• Redefining goals

"PV" stands for.....

• PRESENT VALUE

Speculative Risks Risks that offer a chance of loss or gain, such as developing a “killer app” that may or may not sell or investing in a corporate stock that may or may not provide good returns.

. There are __ factors that affect Personal Financial concerns.

• FOUR

It is the rate that usually not difficult to forecast the timing and amounts of future cash flows.

• DISCOUNT RATE

Capital expenditures are usually part of a ____________ plan of building an asset base.

• Long-term
• Short-term

__ is a way to make an investment that could not otherwise be made, to buy an asset that you couldn’t buy without borrowing.

• DEBT

It may be used to directly transfer funds at the time of purchase, money is also withdrawn from an account and transferred to the payee's with one quick swipe at checkout.

• DEBIT CARD

__ is valuable, and an asset affects its value: all things being equal, the more liquid an asset is, and the better.

• LIQUIDITY

When income for a period is greater than expenses, there is a __.

• BUDGET SURPLUS

A comprehensive budget is a compilation of an __ for short-term goals involving recurring items.

• OPERATING BUDGET

A flexible savings account is used to supplement your basic coverage. It is offered by employers and funded by employees: you may have a tax-exempt deduction made from your paycheck to your flexible spending account.

• True
• False

It insures that the rights of ownership conferred upon you when you purchased your property will remain intact.

• PROPERTY INSURANCE

It also offers ratings and reviews and also provides data on frequency of repairs and annual maintenance costs.

• CONSUMER REPORTS

Offers minimal interest or a bit more interest with minimum deposit requirements.

• TIME DEPOSITS

Financial plans are expected to happen in the future, so financial decisions are based on values some distance away in time.

• True
• False

Three ways to deal with budget deficits:

• SELLING ASSETS
• INCREASING INCOME
• BORROWING
• REDUCING EXPENSES
• BUYING NEEDS ONLY

__ is the process where you gather and analyze financial data to develop a set of strategies that form an integrated plan to help people achieve their financial goals

A financial statement is any item with economic value that can be converted to cash.

• True
• False

An debit card offered by a bank allows for convenient access to the cash in your accounts through instant cash withdrawals.

• True
• False

Is a long-term rental agreement with a buyout option at maturity.

• LEASE

What the fundamental ways of earning income in a market- based economy?

• selling labor or selling capital

Income statement summarizes incomes and expenses for a period of time.

• True
• False

The method of accounting universally used in business today.

• The method of accounting universally used in business today.
• Answer:
• accrual accounting

A lower unit price for a higher volume purchased, may be available for customers buying larger quantities, although sometimes the opposite is true, that is, the smaller package offers a smaller unit price.

• QUANTITY DISCOUNTS

When there are regular payments at regular intervals and each payment is the same amount, that series of cash flows is an __.

• ANNUITY

__ is a matter of organizing personal financial information into summaries that can clearly show different and important aspects of financial life.

• Assessing the current situation

CPA means...

• CERTIFIED PUBLIC ACCOUNTANT

Tax Brackets means the higher the income or the more to be taxed, the greater the tax rate.

• True
• False

It is what people use as their primary means of managing cash flows for daily living.

• Direct Deposit
• Debit Card
• Checking Account
• Automatic Payments

__ is income from employment or self- employment; interest is earned by lending; a dividend is the income from owning corporate stock; and a draw is income from a partnership.

• WAGES OR SALARY

The value-added tax (VAT) or goods and services tax (GST) is widely used outside the United States. It is a consumption tax, but differs from the sales tax, which is paid only by the consumer as an end user.

• True
• False

Selling capital means trading in the capital markets, which is a sellers’ market. You can do this only if you have a budget deficit, or too little cash to provide for your wants or needs.

• True
• False

A comprehensive budget is a compilation of an operating budget for short-term goals involving recurring items.

• True
• False

When incomes are larger than expenses, there is a budget surplus.

• True
• False

Marital status and dependents, such as children, parents or siblings are under the __.

• FAMILY STRUCTURE

Sunk Cost is the return of a foregone option less than the return on your chosen option.

• True
• False

It is insurable due to its probabilities that can be calculated precisely enough for the risk to be quantified, means it can be priced, bought, and sold.

• Insurance
• Pure Risks
• Risk Shifting
• Remorse

Unlike price tag, opportunity cost is obvious.

• True
• False

Consumer Reports also offers ratings and reviews and also provides data on frequency of repairs and annual maintenance costs.

• True
• False

S.M.A.R.T stands for…

• Specific, Measurable, Attainable, Realistic, Timely
• Specefic, Measured, Achievable, Realistic, Timely
• Specific, Measurable, Achievable, Realistic, Timely
• Specific, Measured, Attainable, Realistic, Timely

According to a popular model, to be truly useful, goals must be __.

• Specific, Measurable, Attainable, Realistic, Timely

A process of management and planning the anticipates or keeps at least with changes.

• PERSONAL FINANCE

Capital Gain is the investment that has not only stored wealth but also increased it.

• True
• False

Coinsurance is shared payments of expenses by insured and insurer.

• True
• False

It is where you assess the current situation, or where you figure out where you are at present.

• Financial Planning
• Accounting and Financial Statements
• Personal Financial Statement
• Personal Financial Planning

__ is usually earned and received in a given period.

• INCOME

The method of accounting universally used in business today is known as…

• Cash Accounting
• Income Statement
• Accounting Process
• Accrual Accounting

Covers your injuries if the accident is caused by someone with insufficient insurance or by an unidentified driver.

• Uninsured motorist protection

__ is where cash and assets are traded, most commonly in the form of stocks and bonds.

• CAPITAL MARKET

Income from employment or self- employment is __.

• WAGES OR SALARY

Some assets not only store wealth but also create income.

• True
• False

Resources that can be used to create income, decrease expenses, or store wealth as an investment.

• Labor Market
• Personal Finance
• Assets
• Life Stages

Refers to the financial losses of people in the other car that are injured in an accident you cause, including their medical expenses, loss of income, and your legal fees.

• Refers to the financial losses of people in the other car that are injured in an accident you cause, including their medical expenses, loss of income, and your legal fees.
• Answer:
• Bodily injury liability

When the value of a currency decreases, an economy has ________.

• None of the Above
• Depression
• Inflation
• Deflation
• Recession

Unemployment Rate is a measure of an economy’s shortcomings because it shows the proportion of people who want to work but don’t because the economy cannot provide them jobs.

• True
• False

The cost of simply making the trade.

• TRANSACTION COST

It is more efficient and fair in the consumption that reflects in the income.

• SALES TAX

__ provide a look at the potential results of financial decisions. They can also be used as a tool to plan for certain results

• PRO FORMA FINANCIAL STATEMENTS

The higher the income or the more to be taxed, the greater the tax rate. It is called __.

• PROGRESSIVE TAX

Personal Finance is a process of management and planning that anticipates or keeps abreast with changes.

• True
• False

__ are resources that can be used to create income, decrease expenses, or store wealth as an investment.

• ASSETS

Covers the costs of damage to your own property.

• Collision

Selling an asset can result in a capital gain or capital loss.

• True
• False

A budget covering all aspects of financial life.

• COMPREHENSIVE BUDGET

__ are costs for items or resources that are used up or consumed in the course of daily living.

• EXPENSES

It means working either for someone else for you. Income comes in the form of a paycheck. Total compensation may include other benefits, such as retirement contributions, health insurance, or life insurance.

Which of the following is now a factor that affects a Personal Financial Concern?

• Career Choices
• None of the Above
• Age
• Family Structure

Part of the planning process is evaluating the possible future results of a decision. Since those results will occur sometime from now, it is critical to understand how time passing may affect those benefits and costs not only the probability of their occurrence, but also their value when they do.

• True
• False

It is an absolute law of gravity in business.

• Common- Size Statement
• Cash Flow Statement
• Accounting Process
• Accounting Equation

Cash flows from income may be less frequent than cash flows for expenses.

• True
• False

A transaction cost is the cost of simply making the trade.

• True
• False

The process of gathering and analyzing financial data to develop a set of strategies that form an integrated plan to help people achieve their financial goals.

• PERSONAL FINANCIAL PLANNING

Typically earns no or very low interest but allows complete liquidity on demand.

• DEMAND DEPOSIT

The higher the income or the more to be taxed, the greater the tax rate.

It will allow you to stay on track , and to make a deliberate decisions that will allow you to get closer to your goals.

• Income Statement
• Financial Sheet
• Cash Accounting
• Financial Planning
• Personal Financial Planning

Factors that affects personal financial concerns:

• Family Structure
• Career Choices
• Age
• Assets
• Health

If the rate of GDP increases the expansion is _______.

• Low
• Positive
• Negative
• High
• Neutral

__ is where labor is traded through hiring or employment.

• LABOR MARKET

A comprehensive budget is a compilation of a __ for long-term goals involving nonrecurring items.

• CAPITAL BUDGET

That depends on the cost of its not being liquid today, or on the opportunity costs and risks created by not having liquidity today.

• True
• False

Income remaining after the deduction of living expenses and debt obligations, or __, is cash available for capital expenditures or investment.

• FREE CASH FLOW

Middleman is also called as....

• Middleman is also called as....
• Answer:
• BROKERS

Covers the costs to other people’s property from damage that you cause.

• Property damage liability

Actual Cash Value Estimate the actual market value of the item at the time of loss, so it accounts for the original cost less any depreciation that has occurred.

Estate taxes are taxes on the transfer of wealth from the deceased to the living. Estate taxes are usually imposed on the very wealthiest based on their unusual ability to pay.

• True
• False

Capital Loss is costs that have been spent; that is, whatever resources you traded are gone, and there is no way to recover them.

• True
• False

__ is valuable, and it is an asset affects its value

• LIQUIDITY

Deductibles an amount payable by the insured before any expenses are assumed by the insurer.

Figuring out where you are or assessing the current situation involves understanding what your present situation is and the choices that it creates.

• Financial Planning
• Assessing the Current Situation
• Evaluating Alternatives and Making Choices
• Personal Financial Planning

__ is loaned and borrowed rather than bought and sold.

• CAPITAL

Certificates of deposit (CDs) offer a higher price for liquidity but extract a time commitment enforced by a penalty for early withdrawal.

• True
• False