Personal Finance - True/False questions, Quizzes of Finance

Download Personal Finance - True/False questions and more Quizzes Finance in PDF only on Docsity! PERSONAL FINANCE – MULTIPLE CHOICE QUESTIONS QUESTION T/F $500 on deposit at 6% for 6 months would earn $30. F A budget is a record of how a person or family has spent their money. F A cash flow statement uses this equation: Assets - Liabilities = Net worth. F A financial plan is an informal report that analyzes past financial decisions. F A mortgage is an amount borrowed to buy a house or other real estate. T After two or three years of making loan payments on a new car, the balance owed is greater than the value of the car, which is a situation referred to as upside-down. T After two or three years of making loan payments on a new car, the balance owed is greater than the value of the car, which is a situation referred to as upside-down. T Borrowers is less likely to be harmed by inflation. T Checking account balance is a liquid asset. T Consumer credit refers to the use of debit cards for personal needs. F During problem identification, a clear statement of a problem is "I need to have a car". F Education plan is incorporated in a financial plan. If you earn 11.5 percent on your investments, it will take you 6.3 years for your money to double T Lease-to-purchase and rent-with-option allow renters to become homeowners. T Liabilities are amounts owed to others. T Liquid assets are cash, money in checking and savings accounts, and items of value that can be easily converted to cash. T Making transactions using a debit card will immediately reduce your bank balance. T Minh checked out brands and prices of blue jeans at several stores. She was impulse shopping. F Money management refers to day-to-day financial activities. T Net worth is the amount owed to others. F One of the best ways to compare prices of food packages of different sizes is to use rebate pricing. F Opportunity costs refer to money already spent. F Opportunity costs refer to money already spent. F Personal opportunity costs refer to resources, such as time, health, and energy, that are given up when a choice is made. T Purchasing a car is an example of a durable-product goal. T Stocks are guaranteed to have large returns. F The information gathered from your loan application and the credit bureau establishes your credit rating. T The life situation of a household includes a combination of personal factors such as age, income, household size, and personal beliefs. T The phases of the buying process are problem identification, pre-shopping activities, evaluating alternatives, selection and purchase, and post purchase activities. F The problem of bankruptcy is associated with overuse and misuse of credit in the borrowing component of financial planning T The two personal financial statements that you create yourself are the personal balance sheet and a credit card payoff statement. F The unit price of a 32-ounce jar of honey that costs $8.32 is $0.13 per ounce. F Using the Rule of 72, at an annual interest rate of 5.75 percent, it will take 15 years for savings to double. F Using the Rule of 72, with the value of land in an area increasing 12.5 percent a year, it will take 5.8 years for property values to double. T When completing a cash flow statement, deductions are subtracted from gross salary to determine take-home pay. T