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Personal Finance Final Exam Study Guide, Exams of Finance

Virginia State University (VSU)Finance

Personal Finance Final Exam Study Guide

Typology: Exams

2025/2026

Available from 05/07/2026

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Personal Finance Final Exam Study Guide
1.
The main goal of personal financial planning is:
A.
saving and investing for future needs.
B. reducing a person's tax liability.
C.
achieving personal economic satisfaction
D.
spending to achieve financial objectives.: C. achieving personal economic
satisfaction
2.
Who is most likely to benefit from inflation?
A.
retired people
B.
lenders
C.
borrowers
D.
low-income consumers
E. government:
C.
borrowers
3. The Fed refers to:
A.
government regulation of business.
B. Congress.
C. the Federal Reserve System.
D.
the
Federal
Deposit
Insurance
Corporation.:
C. the Federal Reserve System.
4. Some savings and investment choices have the potential for
higher earn-ings. However, these may also be difficult to convert to
cash when you need
the funds. This problem refers to:
A.
Inflation risk
B.
Interest rate risk
C.
Income
risk
D.
Liquidity
Risk:
D. Liquidity Risk
5. A question associated with the saving component of financial
planning is:
pf3
pf4
pf5
pf8
pf9
pfa
pfd
pfe
pff
pf12
pf13
pf14
pf15
pf16
pf17
pf18
pf19
pf1a
pf1b
pf1c
pf1d
pf1e
pf1f
pf20
pf21
pf22
pf23

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Personal Finance Final Exam Study Guide

  1. The main goal of personal financial planning is: A. saving and investing for future needs. B. reducing a person's tax liability. C. achieving personal economic satisfaction D. spending to achieve financial objectives.: C. achieving personal economic satisfaction
  2. Who is most likely to benefit from inflation? A. retired people B. lenders C. borrowers D. low-income consumers E. government: C. borrowers
  3. The Fed refers to: A. government regulation of business. B. Congress. C. the Federal Reserve System. D. the Federal Deposit Insurance Corporation.: C. the Federal Reserve System.
  4. Some savings and investment choices have the potential for higher earn-ings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to: A. Inflation risk B. Interest rate risk C. Income risk D. Liquidity Risk: D. Liquidity Risk
  5. A question associated with the saving component of financial planning is:

2 / 35 A. Do you have an adequate emergency fund? B. Is your will current? C. Is your investment program appropriate to your income and tax situation? D. Do you have a realistic budget for your current financial situation?: A. Do you have an adequate emergency fund?

  1. When an individual makes a purchase without considering the financial consequences of that purchase, they are ignoring the aspect of financial planning. A. Borrowing B. Risk Management C. Spending D. Retirement and Estate Planning: C. Spending
  2. As an individual plans to set aside funds for her young children's college education, she is setting a(n) goal. A. intermediate B. long-term C. short-term D. intangible: B. long-term
  3. The time value of money refers to: A. personal opportunity costs such as time lost on an activity. B. financial decisions that require borrowing funds from a financial institu-tion. C. changes in interest rates due to changes in the supply and demand for money in our economy. D. increases in an amount of money as a result of interest.: D. increases in an amount of money as a result of interest.
  4. The first step of the financial planning process is to:

4 / 35 D. items owned and amounts owed.: D. items owned and amounts owed.

  1. Current liabilities differ from long-term liabilities based on: A. the amount owed. B. the financial situation of the creditor. C. the interest rate charged. D. when the debt is due.: D. when the debt is due.

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  1. Which of the following situations is a person who could be insolvent? A. Assets $56,000; annual expenses $60, B. Assets $78,000; net worth $22, C. Liabilities $45,000; net worth $6, D. Assets $40,000; liabilities $45,000: D. Assets $40,000; liabilities $45,
  2. Total earnings of a person minus the deductions for taxes and other items is called: A. take-home pay. B. gross pay. C. net worth. D. total revenue.: A. take-home pay.
  3. Payments that do not vary from month to month are expenses. A. fixed B. current C. variable D. luxury: A. fixed
  4. To determine a person's solvency, which financial document should be consulted? A. Cash flow statement B. Budget C. Debt consolidation statement D. Balance sheet: D. Balance sheet
  5. The difference between the amount budgeted and the actual amount is called a:

7 / 35 C. change in net worth. D. budget variance.: D. budget variance.

  1. Nick Boss has a savings account with $550 in it. He knows that he can withdraw this money from his savings account whenever he wishes. This would be an example of: A. Money management B. An opportunity cost C. A balance sheet D. A liquid asset: D. A liquid asset
  2. A personal balance sheet: A. predicts income and expenses. B. reports what an individual or a family owes and owns. C. reports income and expenses or an individual or a family. D. predicts net worth of an economic entity.: B. reports what an individual or a family owes and owns.
  3. Jerry Allison needs to store the title to his car and his house. Where is the most appropriate place for Jerry to store this information? A. His home file cabinet B. His safe deposit box C. His personal computer D. His best friend's house: B. His safe deposit box
  4. Jamie McFarland has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000 and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long-term liabilities is $98,000. What is the total value of her assets?
  • 8 /
  • A. $267,
  • B. $105,

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  1. Reductions from gross income for such items as individual retirement account contributions and alimony payments will result in:

11 / 35 A. adjusted gross income. B. taxable income. C. earned income. D. passive income.: A. adjusted gross income.

  1. Which of the following would qualify a person for an exemption when computing taxable income? A. mortgage interest B. a tax shelter C. a dependent D. charitable contributions: C. a dependent
  2. Most people pay federal income tax by: A. paying the total amount owed by April 15. B. filing quarterly tax payments. C. having amounts withheld from income. D. earning tax credits for various deductions.: C. having amounts withheld from income.
  3. An example of a tax-exempt investment is: A. interest on U.S. savings bonds. B. dividends from corporate stock. C. earnings from a mutual fund. D. interest on municipal bonds.: D. interest on municipal bonds.
  4. The state of Oklahoma imposes a tax of $.17 per gallon on gasoline. What type of tax is this most likely to be? A. General sales tax B. Excise tax C. Personal property tax D. Income tax: B. Excise tax
  5. Joan Sanchez is single and earns $40,000 in taxable

13 / 35 Joan has calculated that she owes $6,747.50 in taxes. What is Joan's marginal tax rate? A. 10% B. 15% C. 25% D. 28%: C. 25%

  1. Maryellen Epplin worked in Poland for part of the year and earned $50,000 while she was there. This income will not be included in her income for the year. This represents: A. A deduction B. An exclusion C. An exemption D. A tax credit: B. An exclusion
  2. Although credit permits more immediate satisfaction of needs and desires, it: A. does increase total purchasing power. B. does not increase total purchasing power. C. does not diminish your ability to buy more goods and services on credit. D. has no opportunity costs attached to it.: B. does not increase total purchasing power.
  3. Another name for open-end credit is: A. revolving credit. B. a box of credit. C. convenience credit. D. installment credit.: A. revolving credit.
  4. The debit card:

14 / 35 A. debits your account at the moment you buy goods or services.

16 / 35 B. you have no legal remedies. C. credit bureaus are not required to change it. D. there are legal remedies available to you.: D. there are legal remedies available to you.

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  1. A bank that is looking at your past payment records on your loans is most likely examining which aspect of the 5Cs of lending? A. character B. capacity C. collateral D. capital: A. character
  2. A term that refers to the borrower's assets or net worth is called: A. capacity. B. character. C. capital. D. collateral.: C. capital.
  3. A loan officer is examining your income and the amount of your existing debt payments in deciding whether to make a loan to you today. Which aspect of the 5Cs of lending is the loan officer most likely looking at? A. Character B. Capacity C. Capital D. Collateral: B. Capacity
  4. If your credit application is denied, you: A. can sue the credit rating agency. B. can file a complaint against the merchant. C. don't have any rights provided by law. D. are entitled to know the specific reason you were denied credit.: D. are entitled to know the specific reason you were denied credit.
  5. What should you do if your identity is stolen?

19 / 35 C. Throw away all records dealing with the problem D. Keep your bank accounts and credit card accounts open for one year.: A. Contact the fraud departments of each of the 3 major credit bureaus.

  1. Which federal consumer credit law regulates the advertising of credit terms? A. Truth in Lending Act B. Equal Credit Opportunity Act C. Fair Credit Billing Act D. Fair Credit Reporting Act: A. Truth in Lending Act
  2. Which of the following is an advantage of using credit? A. The use of credit can lead to court action and bankruptcy B. The use of credit can lead to overspending C.The use of credit allows for the purchase of goods even when funds are low D. The use of credit ties up the use of future income: C. The use of credit allows for the purchase of goods even when funds are low
  3. What should you do when you shop on-line using your credit card? A. Delete immediately all records of your transactions B. Use a secure browser C. Give out your private information to anyone who requests it on- line D. Make sure to open and download all files sent you by strangers: B. Use a secure browser
  4. Maryann Lawrence wants to get a loan in just her name. She knows the creditor cannot: A. Refuse her credit if she is creditworthy B. Consider income from her part time job

20 / 35 C. Consider the payment history of all her joint accounts D. Consider alimony payments she receives from her ex-husband: A. Refuse her credit if she is creditworthy