Deck 1: Beginning Your Financial Journey: the Interior Finance Point of View

Question 1

Which of the following refers to one's ability to understand and use personal finance information?

A) Financial literacy.
B) Financial well-being.
C) Financial knowledge.
D) Financial ability.

Answer 1

Financial knowledge.

Question 2

Which of the following refers to your confidence and peace of mind regarding your financial situation?

A) Financial literacy.
B) Financial well-being.
C) Financial knowledge.
D) Financial ability.

Answer 2

Financial well-being.

Question 3

How much of GDP consists of consumer spending?

A) 46%.
B) 50%.
C) 60%.
D) 66%.

Answer 3

66%.

Question 4

How does consumer spending affect GDP?

A) If spending decreases, GDP increases.
B) If spending increases, GDP decreases.
C) If spending increases, GDP increases.
D) Consumer spending doesn't affect GDP.

Question 5

An action item that should be a part of everyone's journey to financial well-being includes which of the following?

A) Keeping good records.
B) Spending less than you earn.
C) Maintaining appropriate insurance.
D) All of these answer choices are correct.

Question 6

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

A) financial risk tolerance.
B) financial literacy.
C) feelings of control.
D) financial ability.

Question 7

Human capital is your most valuable

A) asset.
B) liability.
C) skill.
D) ability.

Question 8

Your ability and willingness to work, learn, earn, and make wise decisions about how to save and invest money refers to what?

A) Financial literacy.
B) Financial well-being.
C) Social capital.
D) Human capital.

Question 9

How well you are able to form connections with other people is referred to as what?

A) Financial literacy.
B) Financial well-being.
C) Social capital.
D) Human capital.

Question 10

In addition to financial knowledge, which of the following is important in shaping your view of the financial world?

A) Financial risk tolerance, only.
B) Feelings of control, only.
C) Financial well-being.
D) Financial risk tolerance and feelings of control.

Question 11

Which of the following is one of the most important predictors of savings and investment success and overall well-being?

A) Financial literacy.
B) Financial well-being.
C) Financial knowledge.
D) Financial ability.

Question 12

Which of the following is measured by adding up how much the United States produces in goods and services in a year?

A) Gross domestic product.
B) The cost of goods sold.
C) Financial literacy.
D) Financial risk tolerance.

Question 13

Internal finance includes your

A) financial knowledge.
B) financial risk tolerance.
C) feelings of control.
D) All of these answer choices are correct.

Question 14

Which of the following is not found in individuals themselves but rather in the space between individuals or the network of connections among people?

A) Financial literacy.
B) Financial well-being.
C) Social capital.
D) Human capital.

Question 15

Financial literacy takes more than financial knowledge. You must also have some key personal behaviors, including which of the following?

A) Self-control.
B) A desire to apply financial information to the management of your household financial situation.
C) An interest in personal finance topics.
D) All of these answer choices are correct.

Question 16

Those who increase their financial ________ tend to experience greater life and financial well-being.

A) literacy
B) risks
C) knowledge
D) ability

Question 17

Example(s) of human capital include which of the following?

A) Formal education.
B) Health.
C) Skill development.
D) All of these answer choices are correct.

Question 18

Which of the following is a course that will help you outline exactly how to apply your financial knowledge to achieve your life vision?

A) Financial literacy.
B) Financial roadmap.
C) Financial knowledge.
D) Financial ability.

Question 19

If you slow down or stop spending, what happens to GDP?

A) GDP increases.
B) GDP decreases.
C) GDP is unchanged.
D) GDP is not related to consumer spending.

Question 20

Which of the following refers to your willingness to engage in financial endeavors that have uncertain outcomes?

A) Financial literacy.
B) Financial risk tolerance.
C) Financial knowledge.
D) Financial ability.

Question 21

Which of the following connects you with people in professional, recreational, leisure, and social communities?

A) Informal networks.
B) Formal networks.
C) Financial capability.
D) Human capital.

Question 22

Your ________ is wanting something else compared to the option available.

A) uncertainty
B) risk-taking
C) risk preference
D) risk tolerance

Question 23

What happens to your risk tolerance over time?

A) Decreases.
B) Changes.
C) Remains the same.
D) Is unstable.

Question 24

Your willingness to take a risk is influenced by your initial ________ and your ultimate preferences.

A) perception
B) financial knowledge
C) financial ability
D) risk tolerance

Question 25

What refers to doing something that involves the possibility of both a gain and a loss?

A) Uncertainty.
B) Risk-taking.
C) Risk avoidance.
D) Risk tolerance.

Question 26

What refers to your willingness to engage in a risky behavior that entails the possibility of a financial loss?

A) Uncertainty.
B) Risk-taking.
C) Risk avoidance.
D) Risk tolerance.

Question 27

Which of the following includes the interpersonal relationships you form with your family and close friends?

A) Informal networks.
B) Formal networks.
C) Financial capability.
D) Human capital.

Question 28

Your cognitive evaluation of the potential gains and losses associated with a course of action is referred to as what?

A) Risk-taking.
B) Risk avoidance.
C) Risk tolerance.
D) Risk perception.

Question 29

Individuals with a professional degree expect to earn what amount more than those with only a high school diploma over the lifetime?

A) $500,000.
B) $1 million.
C) $2 million.
D) $2.5 million.

Question 30

What percent of the time did the stock market generate a positive annual return from 1824 to 2013?

A) 33%.
B) 47%.
C) 62%.
D) 71%.

Question 31

Risk is the ________ associated with any physical, social, emotional, environmental, workplace, or financial activity.

A) uncertainty
B) financial implication
C) project result
D) benefit

Question 32

From the beginning of your career until retirement, human capital ________ and financial wealth ________.

A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases

Question 33

How does relocating to where specific types of human capital are more valued affect how much you can earn?

A) Increase earnings.
B) Decrease earnings.
C) Double earnings.
D) Triple earnings.

Question 34

Which of the following can both help and seriously deplete your social capital?

A) Informal networks.
B) Formal networks.
C) Social media sites.
D) Human capital.

Question 35

Which of the following is the point where returns through job placements, income, and human capital outweigh the costs of attendance?

A) Informal networks.
B) Formal networks.
C) Financial capability.
D) Educational value.

Question 36

Social capital includes which of the following?

A) Informal and formal networks.
B) Financial well-being and financial knowledge.
C) Formal networks and financial knowledge.
D) Human capital and informal networks.

Question 37

Generally, healthy people work ________ hours and for a ________ period of years over their life span compared to those with impaired health histories.

A) fewer; shorter
B) more; longer
C) the same; shorter
D) fewer; longer

Question 38

Poor health may result in a(n) ________ standard of living across the life span.

A) lower
B) higher
C) lower or higher
D) unchanged

Question 39

The relationship between wealth accumulation and risk tolerance is referred to as what?

A) Positive.
B) Negative.
C) Equal.
D) No association.

Question 40

In the financial marketplace, the only way to accumulate a certain level of wealth is to take ________ with your savings.

A) informed financial risks
B) all risks
C) no risks
D) decreased risks

Question 41

Which of the following refers to a long-term goal?

A) More than 2.5 years−5 years.
B) More than 5 years−10 years.
C) More than 10 years.
D) More than 15 years.

Question 42

Low-risk investments tend to generate ________ amounts of investment income and wealth.

A) high
B) low
C) stable
D) low and volatile

Question 43

Which of the following refers to the "T" in SMART goals?

A) Theoretical.
B) Transcending.
C) Timely.
D) Term.

Question 44

Which of the following represents an attainable goal?

A) Purchase a condominium in a 55-or-older community.
B) Have an income of $180,000 from personal savings, Social Security, and retirement plan assets.
C) Retire at age 67 in Florida with an annual income of $180,000.
D) Begin saving today to reach future goals.

Question 45

Which of the following refers to the "A" in SMART goals?

A) Attainable.
B) Authentic.
C) Allowed.
D) Ample.

Question 46

Which of the following refers to the "R" in SMART goals?

A) Reportable.
B) Rampant.
C) Reliable.
D) Relevant.

Question 47

Higher financial risk tolerance will help you engage in financial behaviors that have ________ long-term payoffs.

A) lower
B) equal
C) greater
D) None of these answer choices are correct.

Question 48

Which of the following represents a timely goal?

A) Start saving $100 per month 5 years before you expect to need to buy a new car with a $6,000 down payment.
B) Have an income of $180,000 from personal savings, Social Security, and retirement plan assets.
C) Retire at age 67 in Florida with an annual income of $80,000.
D) Begin saving today to buy a beach house.

Question 49

What is included in your financial compass?

A) Short-term goals, only.
B) Long-term goals, only.
C) Neither daily tasks nor long-term goals.
D) Both short-term goals and daily tasks.

Question 50

Tolerance for risk can lead to what?

A) Decreased ability.
B) Increased ability.
C) Increased confidence.
D) Financial risk-taking.

Question 51

What type of goals are represented on your financial map?

A) Long-term.
B) Short-term.
C) Life.
D) Goals are not included on the map.

Question 52

Which of the following refers to the "M" in SMART goals?

A) Momentous.
B) Magnitude.
C) Measurable.
D) Manageable.

Question 53

Financial knowledge can lead to increased what?

A) Confidence.
B) Risk.
C) Perception.
D) Social capital.

Question 54

Which of the following represents a measurable goal?

A) Start saving early in life in order to save enough to reach the goal.
B) Have an income of $80,000 from personal savings, Social Security, and retirement plan assets.
C) Retire at age 67 in Florida with a substantial annual income.
D) Begin saving today to reach future goals.

Question 55

Which of the following refers to the "S" in SMART goals?

A) Specific.
B) Simple.
C) Strategic.
D) Significant.

Question 56

Increased financial understanding can lead to what?

A) Increased risk tolerance.
B) Decreased risk tolerance.
C) No change in risk tolerance.
D) None of these answer choices are correct.

Question 57

Which of the following refers to the time between creating a goal and actually achieving the goal?

A) Time in the middle.
B) Goal time horizon.
C) Time to save.
D) Intermediate time.

Question 58

Which of the following includes things that need to happen along the way toward reaching a financial goal?

A) Financial objectives.
B) Financial abilities.
C) Financial skills.
D) Financial literacy.

Question 59

Which of the following represents a SMART goal?

A) Start saving early in life in order to save enough to reach the goal.
B) Have an income over $80,000 from personal savings, Social Security, and retirement plan assets.
C) Retire at age 67 in Florida with an annual income of $80,000.
D) Begin saving today to reach future goals.

Question 60

Which of the following represents a relevant goal?

A) Start saving early in life in order to save enough to buy a beach house.
B) Have an income of $80,000 from personal savings, Social Security, and retirement plan assets.
C) Retire at age 67 in Florida with an annual income of $80,000.
D) Begin saving today to reach future goals.

Question 61

Which of the following does our mind use to make decisions more quickly and easily than if we labor over every choice?

A) Procrastination.
B) Hyperbolic discounting.
C) Behavioral economics.
D) Heuristics.

Question 62

What can lead to becoming overconfident in future decisions?

A) Confirmatory bias.
B) Status quo bias.
C) Optimism bias.
D) Procrastination.

Question 63

In the heuristics decision-making process, evaluating options is an example of which step?

A) Identify the problem or issue.
B) Gather data.
C) Analyze the situation and data.
D) Monitor decision outcomes.

Question 64

Heuristics is based on what type of experiences?

A) Past.
B) Present.
C) Future.
D) Heuristics is not based on experiences.

Question 65

Which of the following is an example of precommitting to decisions using heuristics as a decision-making tool?

A) Using deadlines.
B) Focusing on small steps.
C) Paying bills automatically.
D) Defining where you want to be financially.

Question 66

Which of the following refers to placing more value on the present at the expense of the future?

A) Procrastination.
B) Hyperbolic discounting.
C) Heuristics.
D) Status quo bias.

Question 67

Which of the following refers to your personal preference for keeping things just like they currently are?

A) Heuristics.
B) Hyperbolic discounting.
C) Status quo bias.
D) Procrastination.

Question 68

If you dislike losing, especially money, you might be said to be which of the following?

A) Loss-averse.
B) Procrastinator.
C) Strategic.
D) Heuristic.

Question 69

Which of the following study how people go about making financial decisions?

A) Scientists.
B) Teachers.
C) Behavioral economists.
D) Accountants.

Question 70

In the heuristics decision-making process, making a commitment to the best option is an example of which step?

A) Identify the problem or issue.
B) Gather data.
C) Analyze the situation and data.
D) Implement the decision.

Question 71

Two ways the importance of a personal financial goal can increase are by

A) decreasing the risk tolerance and risk preference.
B) external factors and internal factors.
C) external factors and focusing on things that are out of control.
D) internal factors and establishing a single complex goal.

Question 72

Which of the following provides an example of the actions of those who fall prey to status quo bias?

A) Never buy stocks on Monday.
B) When making an estimate, always be conservative.
C) Underestimate the benefits that come from making a change.
D) Shop for a new car at the beginning of the month, but buy the car at the end of the month.

Question 73

Accepting $5 today instead of waiting to receive $7 tomorrow is an example of what?

A) Procrastination.
B) Hyperbolic discounting.
C) Financial capability.
D) Goal setting.

Question 74

Using heuristics as a decision-making tool includes which of the following steps?

A) Identify the problem or issue.
B) Gather data.
C) Analyze the situation and data.
D) All of these answer choices are correct.

Question 75

Self-efficacy refers to

A) how long you allow yourself to complete a financial goal.
B) how well you believe that you can achieve a goal.
C) your risk-tolerance level.
D) your ability to not procrastinate in working toward a financial goal.

Question 76

What is said to occur when the value of future benefits is perceived to be lower than that of an alternative available right now?

A) Procrastination.
B) Hyperbolic discounting.
C) Financial capability.
D) Goal setting.

Question 77

What term best describes the belief that you will rarely, if ever, experience a painful loss during your lifetime?

A) Loss-aversion.
B) Status quo bias.
C) Optimism bias.
D) Procrastination.