FHCE 3200 Module 1 UPDATED ACTUAL
Exam Questions and CORECT Answers
Perceived Competence - CORRECT ANSWER how well someone can access, understand,
and apply financial information
Measured Competence - CORRECT ANSWER A person's ability to access, understand, and
apply financial information when measured on a scale
Financial Capability - CORRECT ANSWER an individual's capacity based on knowledge,
skills, and access, to manage financial resources effectively
The Concept of 'Lenses' in the financial world: - CORRECT ANSWER -risk tolerance
-knowledge (edu., training, experience)
-current environment
-recent events
Why is financial literacy important? - CORRECT ANSWER -babyboomers approaching
retirement
-increased responsibility in saving for one's retirement/managing finances
-increasing longevity
-mandatory auto insurance, health insurance, etc.
-complex financial decisions are more individualized than institutionalized.
Characteristics of Financially Capable Individuals: - CORRECT ANSWER -self regulation
(includes self-efficacy, self control)
-experience
-education
-interest
, -involvement in decisions
-altruism
Pathways to wealth: - CORRECT ANSWER -keep good records
-spend less than earned
-maintain appropriate risk management strategies
-save money regularly
Assets listed in increasing order based on risk: - CORRECT ANSWER -savings accounts
-US gov. bonds
-corporate bonds
-stocks (highest risk, highest rate of returns!)
What increases financial risk tolerance? - CORRECT ANSWER -experience in the markets
-educational attainment
-age (risk tol. inc. with age)
-gender (men = impatient)
-psychosocial factors
True or False: Risk taking behavior in other areas of your life does not mean that you are also
financially risk taking? - CORRECT ANSWER TRUE
True or False: Risk tolerance can change. - CORRECT ANSWER TRUE
How is risk measured? - CORRECT ANSWER perceived risk tolerance
measured risk tolerance (questionnaire in class)
Exam Questions and CORECT Answers
Perceived Competence - CORRECT ANSWER how well someone can access, understand,
and apply financial information
Measured Competence - CORRECT ANSWER A person's ability to access, understand, and
apply financial information when measured on a scale
Financial Capability - CORRECT ANSWER an individual's capacity based on knowledge,
skills, and access, to manage financial resources effectively
The Concept of 'Lenses' in the financial world: - CORRECT ANSWER -risk tolerance
-knowledge (edu., training, experience)
-current environment
-recent events
Why is financial literacy important? - CORRECT ANSWER -babyboomers approaching
retirement
-increased responsibility in saving for one's retirement/managing finances
-increasing longevity
-mandatory auto insurance, health insurance, etc.
-complex financial decisions are more individualized than institutionalized.
Characteristics of Financially Capable Individuals: - CORRECT ANSWER -self regulation
(includes self-efficacy, self control)
-experience
-education
-interest
, -involvement in decisions
-altruism
Pathways to wealth: - CORRECT ANSWER -keep good records
-spend less than earned
-maintain appropriate risk management strategies
-save money regularly
Assets listed in increasing order based on risk: - CORRECT ANSWER -savings accounts
-US gov. bonds
-corporate bonds
-stocks (highest risk, highest rate of returns!)
What increases financial risk tolerance? - CORRECT ANSWER -experience in the markets
-educational attainment
-age (risk tol. inc. with age)
-gender (men = impatient)
-psychosocial factors
True or False: Risk taking behavior in other areas of your life does not mean that you are also
financially risk taking? - CORRECT ANSWER TRUE
True or False: Risk tolerance can change. - CORRECT ANSWER TRUE
How is risk measured? - CORRECT ANSWER perceived risk tolerance
measured risk tolerance (questionnaire in class)
