Financial 4#

What is the primary advantage of using electronic payments over paper checks?

• They increase the risk of fraud

• They reduce the delivery and processing delays, enhancing efficiency

• They require more paperwork

• They are more expensive for businesses

• They are only used for international transactions

What is the term "float" in the context of banking and payment systems?

• The amount of time a check takes to clear between the payer and payee

• The total balance in a checking account

• The rate of interest on loans

• The amount of debt a person can incur without penalty

• The fluctuation in the stock market

How does the "remote capture" process benefit the payment system?

• It allows checks to be paid instantly without any delays

• It eliminates the need for paper checks entirely

• It scans checks and electronically transmits payment details, reducing errors and float

• It increases the number of paper checks processed

• It is only available for international payments

What is the primary goal of personal financial planning?

• To increase debt as much as possible

• To manage financial resources to achieve life goals

• To avoid financial investments

• To eliminate all discretionary spending

• To avoid creating a budget

Which of the following is considered an essential expense in a personal budget?

• Entertainment subscriptions

• Mortgage or rent payments

• Luxury vacations

• Investing in high-risk stocks

• Dining out expenses

Personal income primarily includes which of the following?

• Loans and borrowed funds

• Salary, wages, and investment returns

• Gifts from friends and family

• Credit card cash advances

• Tax refunds only

Which of the following best describes a discretionary expense?

• Mortgage payment

• Monthly utility bill

• Groceries

• Savings for retirement

• Vacation travel

Why is it important to track both income and expenses in personal finance?

• To avoid paying taxes

• To ensure that spending exceeds income

• To monitor cash flow and make adjustments

• To prevent budgeting for essential expenses

• To eliminate all investments

A personal budget typically includes which of the following categories?

• Income, expenses, savings, and debt repayment

• Only income and discretionary expenses

• Investments and government loans

• Credit card limits and stock market trends

• Gifts and donations only

What is a common financial strategy to increase personal savings?

• Spend all remaining income on luxury items

• Reduce discretionary expenses

• Ignore financial planning

• Increase short-term debt

• Avoid tracking expenses