SS Unit 1 CFA REVIEW

Use the scenario to answer the following question.

Jonathon has a weekly disposable income of $50.00 after completing his budget.

Which option carries the HIGHEST risk of Jonathon losing his money without receiving any benefit?

• loaning his disposable income to a friend

• storing his disposable income at home in a safe

• depositing his disposable income in a savings account

• purchasing a video game, he desires with his disposable income

Use the scenario to answer the following question.

You have your own car, which you make monthly payments on, by working a part time job. You must also pay for your own gas. Your friends want to take a trip to the beach, but you do not have enough money to pay for the extra gas required.

Which is an example of good personal finance decision making?

• borrow money from your parents to take the trip

• pay for gas with your credit card to be able to go on the trip

• wait until you have enough money in your budget to take the trip

• wait until you no longer have to make car payments to take the trip

What is the benefit of making good personal money management choices?

• You will not need to save money.

• Your income will greatly increase.

• You will not spend more than you earn.

• You can make all your purchases on credit.

• The later one begins saving, the more one can save.

• The earlier one begins saving, the more one can save.

• If you start saving at 25, you will be able to meet your financial goals.

• If you start saving at 35, you will not be able to meet your financial goals.

• Bill is spending too much money on groceries.

• Bill’s May budget includes a gift from his parents.

• Bill is overspending, which means that he is unable to save money.

• Bill’s income is too low, so he should use a credit card to pay for his bills.

Stephanie has a full-time job that pays her every two weeks. Sometimes she has enough to save a little, but not usually.

What should she spend her money on FIRST when she receives a paycheck?

• gifts for family

• books and games

• groceries and rent

• an expensive meal

• If Jane buys the car, she will need to use credit to pay for gas. 

• Jane should not purchase the car because she has to borrow money.

• Jane has a good interest rate because she did not have to borrow money to purchase the car. 

• If Jane pays more than the minimum payment each month, it will reduce the total cost of the car. 

Use the information to answer the following question.

The Samuels family often faces unexpected expenses, such as when one of their dogs gets sick. This year, they received a $5,000 bonus.

Which option represents a wise compromise between giving themselves a treat and preparing for unexpected expenses?

• save $100 for unexpected expenses and donate the rest to charity

• spend the $5,000 on a vacation and promise to save more when they get home

• save the entire amount for unexpected expenses and begin saving for a vacation

• spend $1,000 on things they want and save the rest for unexpected expenses