WorksheetsPersonal Finance Exam Review
Total questions: 87
Worksheet time: 44mins
Chapter 1 — Introduction to Personal Finance: Which statement best describes the purpose of the New Deal during the Great Depression created under Franklin D. Roosevelt?
It aimed to stimulate economic recovery and provide relief through government programs
It reduced federal spending to balance the budget immediately
It focused on expanding overseas trade to boost exports
It privatized banks to increase competition
Chapter 1 — Introduction to Personal Finance: Personal finance is primarily about behavior rather than head knowledge. Which proportion reflects this idea most accurately?
80% behavior and 20% head knowledge
50% behavior and 50% head knowledge
20% behavior and 80% head knowledge
100% behavior and 0% head knowledge
Chapter 1 — Introduction to Personal Finance: Financial goals should be set in what way?
Specific, measurable, and time-bound
General and flexible without deadlines
Based on trends and popularity
Left unwritten to encourage spontaneity
Chapter 1 — Introduction to Personal Finance: What is the key difference between a short-term financial goal and a long-term financial goal?
Short-term goals are achieved within a year; long-term goals take several years
Short-term goals require borrowing; long-term goals require saving
Short-term goals are optional; long-term goals are mandatory
Short-term goals are unrelated to budgeting; long-term goals are part of a budget
Chapter 1 — Introduction to Personal Finance: Which of the following is one of the Five Foundations for financial success?
Save $500 for an emergency fund
Finance purchases with store credit cards
Ignore insurance needs
Invest only after retirement
Chapter 1 — Introduction to Personal Finance: What percentage of Americans live paycheck to paycheck?
78%
55%
30%
12%
Chapter 1 — Introduction to Personal Finance — Define: Which term refers to the price paid for borrowing money, expressed as a percentage of the principal?
Interest Rate
Asset
Net Worth
Liability
Chapter 1 — Introduction to Personal Finance — Define: Which term is a resource with economic value that you own?
Asset
Debt
Consumer
Liability
Chapter 1 — Introduction to Personal Finance — Define: Which term represents what you owe to others?
Liability
Net Worth
Percent
Interest
Chapter 1 — Introduction to Personal Finance — Define: Which term is calculated as assets minus liabilities?
Net Worth
Debt
Basic Paycheck
Financial Literacy
Chapter 1 — Introduction to Personal Finance — Define: Which term refers to the knowledge and skills needed to make responsible financial decisions?
Financial Literacy
Percent
Consumer
Interest
Chapter 2 — Budgeting Basics: What percentage of Americans actually use a written budget?
32%
10%
60%
90%
Chapter 2 — Budgeting Basics: How often should a budget be prepared and reviewed?
Monthly
Annually
Every five years
Only when income changes
Chapter 2 — Budgeting Basics: About how many months does it usually take before a new budget starts working smoothly?
Three months
One week
Twelve months
Immediately
Chapter 2 — Budgeting Basics: Which is a discretionary expense?
Dining out at restaurants
Rent payment
Required insurance premium
Student loan payment
Chapter 2 — Budgeting Basics: Which is a variable expense in a household budget?
Electricity bill
Mortgage payment
Car loan payment
Fixed internet plan price
Chapter 2 — Budgeting Basics: Why is budgeting important?
It gives your money purpose and control
It guarantees higher income
It eliminates all unexpected expenses
It replaces the need for saving
Chapter 2 — Budgeting Basics — Define: Which term refers to planned and tracked income and expenses for a set period?
Budget
Commission
Net Income
Cash Flow Statement
Chapter 2 — Budgeting Basics — Define: Which term refers to earnings remaining after taxes and deductions?
Net Income
Income
Variable Expense
Fixed Expense
Chapter 2 — Budgeting Basics — Define: Which term is a cost that changes in amount from one period to the next?
Variable Expense
Fixed Expense
Commission
Incremental Expense
Chapter 2 — Budgeting Basics — Define: Which term is a cost that stays the same each period?
Fixed Expense
Variable Expense
Income
Commission
Chapter 2 — Budgeting Basics — Define: Which term is payment to a salesperson based on a percentage of sales?
Commission
Income
Incremental Expense
Budget
Chapter 2 — Budgeting Basics — Define: Which document summarizes cash inflows and outflows during a period?
Cash Flow Statement
Basic Paycheck
Net Worth
Interest
Chapter 3 — Saving Money: What percentage of Americans have less than $1,000 saved for an emergency?
69%
20%
5%
90%
Chapter 3 — Saving Money: What is the primary goal of an emergency fund?
Cover unexpected expenses without going into debt
Finance vacations at low interest rates
Provide investment capital for high-risk ventures
Replace the need for insurance
Chapter 3 — Saving Money: When should you begin investing money?
After you have an emergency fund and are out of consumer debt
Before you have any savings
Only after age 40
Only when interest rates are low
Chapter 3 — Saving Money: What is financial fitness?
Maintaining strong habits for saving, budgeting, and avoiding debt
Maximizing credit card rewards each month
Speculating in short-term investments
Owning luxury items as status symbols
Chapter 3 — Saving Money: What should you keep in your emergency fund?
Liquid cash in a separate savings account
Stock shares held in a brokerage account
Collectibles stored at home
Long-term certificates of deposit only
Chapter 3 — Saving Money: What are the three main reasons for saving your income?
Emergency fund, purchases, and wealth building
Taxes, insurance, and debt payments
Travel, entertainment, and dining
Rent, utilities, and transportation
Chapter 3 — Saving Money — Define: Which term refers to the original amount of money invested or borrowed?
Principal
Compound Interest
Inflation
Time Value of Money
Chapter 3 — Saving Money — Define: Which term describes earnings that grow on both the principal and previously earned interest?
Compound Interest
Simple Interest
Depreciation
Equity
Chapter 3 — Saving Money — Define: Which term is the increase in prices over time that reduces purchasing power?
Inflation
Interest Rate
Equity
Collateral
Chapter 3 — Saving Money — Define: Which concept explains that a dollar today is worth more than a dollar in the future because it can earn interest?
Time Value of Money
Appreciating Asset
Debt Snowball
Lease
Chapter 4 — Credit and Debt: Banks and lenders use credit scores to determine what?
Your likelihood of repayment and the terms of a loan
Your eligibility for voting
Your salary at work
Your tax bracket
Chapter 4 — Credit and Debt: Your greatest tool for building wealth is what?
Your income
Credit card points
High-risk investing
Lottery winnings
Chapter 4 — Credit and Debt: What type of loan requires the borrower to put up collateral?
Secured loan
Unsecured loan
Personal line of credit
Revolving credit
Chapter 4 — Credit and Debt: What does FICO score refer to?
A standardized credit score ranging roughly from 300 to 850
A bank’s interest rate on savings accounts
A government tax identification number
An insurance premium calculation
Chapter 4 — Credit and Debt: Why is it important to check your credit report regularly?
To catch errors or fraud and manage your credit responsibly
To guarantee lower loan interest rates automatically
To increase your net worth instantly
To avoid having to budget
Chapter 4 — Credit and Debt: What is the Debt Snowball method of getting out of debt?
Paying off debts from smallest balance to largest while maintaining minimums on others
Consolidating all debts into one large loan
Negotiating interest rates before making any payments
Paying only high-interest debts and ignoring others
Chapter 4 — Credit and Debt: Which is an example of an appreciating asset?
Real estate property
Used car
Smartphone
Furniture
Chapter 4 — Credit and Debt: Which is an example of a depreciating asset?
Automobile
Land
Collectible art
Savings bond
Chapter 4 — Credit and Debt — Define: Which term refers to property pledged to secure a loan?
Collateral
Equity
Principal
Lease
Chapter 4 — Credit and Debt — Define: Which term refers to the length of time over which a loan is repaid?
Term
Interest
Credit Score
Predatory Lending
Chapter 4 — Credit and Debt — Define: Which term is the amount of ownership in an asset after liabilities are subtracted?
Equity
Depreciation
Interest Rate
Debt
Chapter 5 — Consumer Awareness: Define and give an example of discretionary spending. Which option best demonstrates discretionary spending?
Buying concert tickets with leftover income
Paying monthly rent
Making a required car loan payment
Purchasing mandatory textbooks
Chapter 5 — Consumer Awareness: What does it mean to develop power over purchase?
Making thoughtful, planned decisions rather than impulsive buys
Opening more store credit accounts
Spending quickly to capture sales
Letting advertisements guide every purchase
Chapter 5 — Consumer Awareness — Define: Which term describes lending that exploits borrowers with unfair or abusive terms?
Predatory Lending
Secured Loan
Equity
Collateral
Chapter 5 — Consumer Awareness — Define: Which term refers to an asset that tends to lose value over time?
Depreciating Asset
Appreciating Asset
Equity
Principal
Chapter 5 — Consumer Awareness — Define: Which term is the reduction in value of an asset over time due to wear, age, or obsolescence?
Depreciation
Interest
Lease
Commission
Chapter 5 — Consumer Awareness — Define: Which term is a contract allowing use of property for a specified time in exchange for payments without ownership?
Lease
Principal
Debt Snowball
Time Value of Money
Chapter 5 — Consumer Awareness — Define: Which term refers to the original amount owed on a loan?
Principal
Interest Rate
Equity
Variable Expense
Chapter 5 — Consumer Awareness — Define: Which term refers to the price paid for the use of borrowed money?
Interest
Cash Flow Statement
Commission
FICO Score
Chapter 5 — Consumer Awareness — Define: Which term represents the numerical measure of a person’s creditworthiness?
Credit Score
Percent
Budget
Asset
Digital marketing strategy that tracks users across the web
Search engine optimization
Retargeting ads
Affiliate links
Influencer sponsorships
Why should you have a consumer diary?
To record your purchases and patterns so you can spot habits and make better choices
To keep receipts for warranty claims only
To compare your spending to other people
To qualify for store rewards programs
Why should you never buy the extended warranty?
It usually duplicates coverage and costs more than the likely repair
It voids the original manufacturer warranty
It prevents you from returning the item
It requires you to finance the purchase
Define: Identity Theft
Unauthorized use of someone’s personal information to commit fraud
Accidental loss of a debit card
Legal sharing of data with lenders
Marketing to a specific demographic
Define: Opportunity cost
The value of the next best alternative you give up when you choose
The total price including tax
A discount offered at checkout
The amount financed on a loan
Define: Payment
Transfer of money to settle a debt or purchase
A promise to consider a future purchase
A refund issued after a return
An interest charge added to a loan
Define: Brand Recognition
Consumer ability to identify a brand by its attributes such as logo or slogan
A company’s legal trademark filing
A store’s planogram layout
A manufacturer’s warranty policy
Define: Card Fraud
Unauthorized transactions or use of a credit or debit card
A legal dispute over billing errors
An overdraft fee assessed by a bank
Normal monthly interest on a credit card
Define: Wise Consumer
A shopper who researches, budgets, and resists impulse buys
A person who always buys the cheapest item
A customer who only uses credit
A buyer who relies on advertising claims
Define: Buyer’s remorse
Regret or dissatisfaction after making a purchase
Excitement before buying a product
A price match guarantee
A refund issued by the seller
Define: Marketing
Activities that promote, price, place, and sell products to consumers
Only the design of product packaging
Accounting for sales and expenses
Government regulation of advertising
Define: Contentment
Satisfaction with what you have rather than constant desire for more
A temporary sale promotion
A savings account balance
An interest rate cap on loans
First step in finding your dream job
Identify your strengths, interests, and values
Apply to as many jobs as possible
Negotiate salary before interviewing
Wait for recruiters to contact you
Benefits of working while in school
Builds experience and skills
Helps cash-flow education costs
Reduces time available for study
Expands professional network
The characteristics of entrepreneurs revealed that millionaires are more likely to
Be self-made through consistent saving and hard work rather than inherit wealth
Rely on luck and windfalls
Depend primarily on high-risk speculation
Have guaranteed success without failure
When writing a purpose statement, what should you think about?
Your values, goals, and the impact you want to have
Only future income potential
What others expect of you
Current trends on social media
Key to failure is to do what with it?
Learn from it and adjust
Ignore it entirely
Blame others
Quit after the first setback
Qualities of a good mentor
Experience and integrity
Willingness to give honest feedback
Guarantee of a job
Alignment with your goals
Define: Entrepreneur
A person who starts and operates a business, taking on financial risk
An employee who avoids responsibility
A consultant who only gives advice
A volunteer in a nonprofit
Define: Soft skills
Personal attributes like communication, teamwork, and problem-solving
Technical abilities specific to a job
Physical tasks requiring strength
Licenses required for employment
Define: Hard skills
Technical, teachable abilities measurable by tests or performance
Interpersonal traits and attitudes
General interest or hobbies
Volunteering experience
Define: Mentor
An experienced person who advises and guides someone less experienced
A co-worker at the same level
A competitor in the industry
A recruiter who screens applicants
Define: Revenue
Income generated from sales or services before expenses
Net profit after costs
Owner’s equity contribution
Interest paid on loans
Define: Sweet spot
The intersection of your skills, passions, and economic opportunity
The highest possible salary regardless of interest
A job with minimal effort
A role chosen only for status
What parts are needed when making a plan to pay cash for college?
Savings plan and budget
Work strategy such as part-time jobs
Scholarship and grant search
Credit card balance transfers
The average American takes how long to pay off their student loan debt
About 5 years
About 10 years
About 20 years
About 30 years
Define: Community College
A local two-year institution offering associate degrees and certificates
A four-year private university
An online-only bootcamp
A vocational licensing agency
Define: Public and Private (colleges)
Public colleges are government-funded; private colleges are funded by tuition, donations, and endowments
Both are funded entirely by federal grants
Public colleges are more expensive than private ones by law
Private colleges must be religiously affiliated
Define: Trade Schools
Programs focused on specific skilled careers with practical training
General liberal arts institutions
Research universities only
Test-prep centers
Define: Scholarship
Aid you don’t repay, awarded for merit, need, or criteria
Money borrowed with interest
Employer tuition reimbursement only
A savings account for college
Define: FAFSA
The Free Application for Federal Student Aid used to determine eligibility for financial aid
A federal loan repayment program
A scholarship search website
A private lender’s contract
Define: Private Student Loans
Loans issued by non-government lenders with terms set by the lender
Federal loans with fixed rates
Grants awarded by the state
Tuition waived by colleges
Define: Federal Student Loans
Loans funded by the U.S. government with standardized terms and protections
Credit card advances used for tuition
Scholarships awarded by colleges
Private loans with variable terms
Define: Associate Degree
An undergraduate two-year degree typically earned at a community college
A four-year bachelor’s degree
A graduate master’s degree
A professional certification
