WorksheetsExam 1 Review
Total questions: 50
Worksheet time: 27mins
What is the term for the ability to apply financial concepts to make informed decisions about money management?
Financial planning.
Financial knowledge.
Financial independence.
Financial security.
People who believe that what happens to them is based on fate or luck might view their financial journey as being uncertain. This is an example of
feelings of control.
financial literacy.
financial risk tolerance.
financial ability.
What term describes your comfort level with making investments that may result in either gains or losses?
Financial risk tolerance.
Financial ability.
Financial knowledge.
Financial literacy.
Scarcity refers to:
having too much debt.
having limited resources available.
having unlimited resources available.
having too little financial knowledge.
The skills, knowledge, and experiences you possess that help you earn income and make informed financial choices are known as what?
Financial literacy.
Human capital.
Financial well-being.
Social capital.
How well you are able to form connections with other people is referred to as what?
Human capital.
Social capital.
Financial literacy.
Financial well-being.
Nate is considering a Master's degree that will enable him to upgrade his job. The program would mean that he would have to miss a year of work. It would cost him $25,000 in tuition and another $25,000 in additional living expenses that he can pay for with a student loan. He currently earns $45,000, and the promotion would pay him $65,000. What is his payback period??
1.46
2.50
3.50
4.75
Which of the following refers to the "S" in SMART goals?
Strategic.
Significant.
Simple.
Specific.
Which of the following is an example of a SMART financial goal?
Save money for the future.
Increase savings each year.
Save $10,000 in five years for a down payment on a house.
Plan to have more money after retirement.
Which of the following is an example of a specific and measurable financial objective?
Save enough money to live comfortably after retirement.
Increase savings each year for future needs.
Accumulate $500,000 in retirement savings by age 65.
Plan to have more money than expenses in retirement.
Which of the following refers to your personal preference for keeping things just like they currently are?
Hyperbolic discounting.
Heuristics.
Status quo bias.
Procrastination.
If you dislike losing, especially money, you might be said to be which of the following?
Strategic.
Heuristic.
Loss-averse.
Procrastinator.
Which of the following refers to the price paid for using money?
Compound growth.
Principal.
Interest.
Debt.
The Federal Deposit Insurance Corporation and the National Credit Union Administration protects savings deposits up to what amount?
$250,000.
$350,000.
$450,000.
$500,000.
Which of the following refers to a series of equal payments or deposits?
Future value.
Annuity.
Number of periods.
TVM.
Which of the following estimates how much current savings and investments will be worth at a certain date in the future?
FV of a lump sum.
PV of a lump sum.
FV of an annuity.
PV of an annuity.
Which of the following determines the current value of a future amount?
FV of a lump sum.
PV of a lump sum.
FV of an annuity.
PV of an annuity.
Which of the following refers to what you own?
Assets.
Liabilities.
Net worth.
Principal.
Which of the following refers to what you owe?
Assets.
Liabilities.
Net worth.
Principal.
Which of the following is an asset that would appreciate in value over time?
Computer.
Car.
House.
Bicycle.
Which of the following refers to an asset that loses value over time?
Liquidity.
Depreciating asset.
Liability.
Appreciating asset.
Which of the following is an obligation that must be settled within twelve months?
Assets.
Short-term liabilities.
Long-term liabilities.
Liabilities.
Which of the following is an element in a budget?
Fixed expenses.
Variable expenses.
Income.
All of these answer choices are correct.
Which of the following means that your expenses exceed your income?
Asset.
Surplus.
Net worth.
Deficit.
If demand outpaces supply, prices will:
decrease.
increase.
remain the same.
There is not enough information to answer this question.
Which of the following indicates the percentage of income that you are actively saving?
Net worth ratio.
Surplus ratio.
Deficit ratio.
Savings ratio.
Which of the following is the recommended targeted savings rate if you are under age 30?
10%.
12%.
15%.
20%.
What is Renea's surplus available for saving and investing if she has an annual income of $73,000 and living expenses of $59,000?
$10,000.
$14,000.
$20,000.
$25,000.
Which of the following refers to compensation received for services performed for an employer?
Income.
Earnings.
Dividends.
Allowance.
How much is the minimum wage in the United States?
$7.25 per hour.
$8.25 per hour.
$9.25 per hour.
$10.25 per hour.
If you regularly receive more than $30 in tips per month, then federal rules allow for a minimum wage of per hour.
$7.25
$7.13
$3.25
Those on salary typically have those working for a wage.
worse employee benefits than
the exact employee benefits as
free employee benefits compared to
Jorge earns $20 per hour. He works 40 hours per week and takes two weeks of paid vacation each year. How much does Jorge earn per year, assuming that he does not receive overtime pay?
$40,000.
$41,600.
$46,000.
$51,000.
If an individual is self-employed and considered an independent contractor, what percent of Social Security and Medicare taxes is he or she required to pay relative to salaried individuals?
20%.
25%.
50%.
100%.
What is the default legal structure of a self-employed individual?
Partnership.
Corporation.
Employer.
Sole proprietorship.
Which of the following refers to being totally responsible for paying all liabilities a business incurs?
Unlimited liability.
Capital liability.
General liability.
Limited liability.
Which of the following refers to a legal structure that is separate from the owners of the business?
Limited partnership.
General partnership.
Sole proprietorship.
Corporation.
Which of the following refers to money you receive from work?
Declared income.
Earned income.
Taxable income.
Unearned income.
Which of the following refers to the money you receive from the investments that you have made?
Earned income.
Commissions.
Unearned income.
Earnings.
When you make a deposit, you are essentially:
giving the bank or credit union money.
lending the bank or credit union money.
borrowing from the bank or credit union.
investing in the bank or credit union.
Which of the following refers to almost everything you own or use for personal or investment purposes?
Personal asset.
Personal belonging.
Investment asset.
Capital asset.
Which of the following happens when you sell an asset for more than you paid for it?
Capital gain.
Dividends.
Capital loss.
You break even on the sale.
If you hold an asset for more than one year and then sell it for a profit, you will be taxed at a rate of which of the following?
Short-term capital gains.
Capital assets.
Long-term capital gains.
Normal dividends.
The power of compound interest refers to:
the return on vocational training.
interest being reinvested and earning additional interest.
the return on an educational investment.
how long it takes to earn a certain sum.
Which of the following statements is true about compound growth?
Only interest experiences compound growth, not other investment gains.
The longer you let your money grow, the more it will produce.
The full benefits of compound growth are generally realized within 5 to 10 years.
How long money is set aside does not matter when calculating compound growth.
Given the choice, it is preferable to earn interest that is compounded:
yearly.
daily.
monthly.
quarterly.
What form is used by financial planners to estimate someone's net worth?
Income and expense statement.
Budget.
Balance sheet.
Cash flow statement.
Which of the following is a short-term debt?
A balance owed on a credit card statement.
A deferred student loan.
A vehicle loan on a new car.
A balance owed on a credit card statement, a deferred student loan, and a vehicle loan on a new car.
Sarah's assets and liabilities are listed below.
Cash: $500
Jewelry and electronics: $2,500
Bike: $1,200
Savings account: $15,000
Credit card debt: $400
Bike loan: $800
Personal loan: $5,000
What is Sarah's net worth?
$13,000
$18,000
$12,000
$16,500
Which of the following individuals would be most likely classified as self-employed?
I. A teller at a bank
II. A lawyer in a partnership
III. An independent plumber
Iv. A worker paid by the hour, whose weekly paycheck does not withhold any taxes.
II and III only.
III and IV only.
I, II, III, and IV.
II, III, and IV only.
