D/S Unit 1 Test Review MC Question Preview (ID: 35045)


Multiple Choice.

Which of the following is a consequence of overdrawing your checking account? *
a) All of these
b) Bounced check fee from the store Stress from money mismanagement
c) Stress from money mismanagement
d) intermittent expense

Rent is a
a) fixed expense
b) discretionary expense
c) variable expense
d) intermittent expense

Eating out is a
a) discretionary expense
b) fixed expense
c) variable expense
d) intermittent expense

Groceries are a
a) discretionary expense
b) fixed expense
c) variable expense
d) intermittent expense

Car repairs are a
a) intermittent expense
b) variable expense
c) fixed expense
d) discretionary expense

A written budget, if followed, removes from your finances. *
a) All of these
b) overspending
c) management by crisis
d) guilt

Percentage of Americans living paycheck to paycheck:
a) 70
b) 25
c) 50
d) 40

The zero-based budget is the best method of budgeting because:
a) The zero-based budget ensures that every dollar you make is assigned a specific purpose
b) Sticking to a zero-based budget requires less discipline
c) A zero-based budget allows less money for wants
d) This type of budget is less complicated than other types of budgets

Which of the following account records would have the most current balance?
a) Your own account register
b) Account balance statement from the ATM
c) Your monthly bank statement
d) All of these records will have accurate account balances

Instead of borrowing money for large purchases, you should set money aside in a ____ over time and pay with cash.
a) sinking fund
b) emergency fund
c) credit card fund
d) mortgage fund

What does it mean to have a negative savings rate?
a) Spending more money than you make and acquiring debt
b) Having no savings at all
c) Having a fully funded emergency fund
d) Saving for something that is a want instead of a need

The saving habits of Ben and Arthur best illustrate which principle of saving?
a) Both the length of time and the rate of return matters.
b) Only the rate of return matters.
c) The amount of the initial investment is the key.
d) Only the length of time money is invested matters.

Using the sinking fund approach, how much do you have to save each month to buy a $4,800 car one year from now?
a) $400
b) $300
c) $275
d) $500

At your age, a fully funded emergency fund should be:
a) $500
b) $100
c) $1000
d) $5000

Which of the following is a reason that people donʹt save money?
a) All of these
b) They lack discipline
c) They don't live on a budget
d) They lack focus

Which of the following is NOT one of the three basic reasons for saving money?
a) Have money available to lend to friends
b) Emergency fund
c) Large purchases
d) Building Wealth

Why is having a fully funded emergency fund so important when it comes to your financial well-being?
a) To have money set aside for unexpected financial emergencies so you can have financial security
b) As long as you have a good-paying job, you really donʹt need an emergency fund.
c) The purpose of an emergency fund is to have money set aside for large purchases, like vacations.
d) None of these

Key components of financial planning include all of the following except:
a) Allow your financial planner to make all of your major money decisions
b) Regularly monitor and reassess your financial plan
c) Replace money myths with money truths
d) Write out a detailed plan for accomplishing your goals

Which of the following statements best explains why income alone does not determine wealth?
a) How much money a person makes does not dictate his or her spending and saving behavior.
b) Only people who are natural savers can become wealthy.
c) Income alone does determine a personʹs wealth.
d) Investing is the only factor that contributes to wealth building.

When it comes to managing money, success is about __% knowledge and __% behavior.
a) 20,80
b) 60,40
c) 80,20
d) 50,50

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