Personal Financial Literacy Exam
questions with verified answers
Margo signed a lease to rent a small building for her business. In exchange for the use of the
facility, Margo will pay monthly rent. What component of a legally binding contract does the
rent represent?
A. Component Parties
B. Consideration
C. Legality
D. Agreement - ANS ✔✔B) Consideration
In order for a contract to be legally binding, something of value must be exchanged. In this case,
the rent is being exchanged for space. Agreement requires an offer be made by one party and
accepted by the second party. Competent parties require those entering a contract to be of
legal age and to meet other criteria. Legality refers to the terms of the offer being within the
law.
One of the main reasons why individuals make investments based on their future financial
needs is to
A. develop a living will
B. avoid paying taxes
C. set up a trust fund
D. generate a retirement income - ANS ✔✔D) generate a retirement income
Most individuals analyze their future financial needs in order to make investments that will
generate income in the future. The reason for the investments is to have income to support
them during retirement. Individuals estimate future living expenses and make investments in
the hope of generating adequate retirement income. Individuals do not make investments
based on their future financial needs to avoid paying taxes, set up a trust fund, or develop a
living will.
, Which of the following is a name for a medium of exchange accepted and backed by the
government as payment for goods and services:
A. Currency
B. Credit cards
C. Money market accounts
D. Certificates of deposit - ANS ✔✔A) Currency
Currency is government issued specimen that are accepted as payment for goods and services.
Credit cards, money market accounts, and certificates of deposit are not mediums of exchange.
One advantage to setting attainable goals is that you
A. work harder to achieve a very high goal
B. can measure your progress
C. are less likely to become discouraged
D. can picture it in your mind - ANS ✔✔C) are less likely to become discouraged.
Attainable goals are realistic and within reach, so one advantage to setting attainable goals is
that you are less likely to become discouraged. Attainable goals will not make you work harder
to achieve a very high goal—very high goals do not fit the definition of attainable. Being able to
picture a goal in your mind is the result of setting a specific goal, not necessarily an attainable
one. Being able to measure your progress is the result of setting a measurable goal, also not
necessarily an attainable one.
What type of services do property taxes typically fund?
A. State/Provincial education programs and federal correctional facilities
B. National security programs and local road repairs
C. Local fire departments and local law-enforcement agencies
D. State/Provincial colleges and state/provincial social welfare initiatives - ANS ✔✔C) Local fire
departments and local law-enforcement agencies
Local governments levy property taxes on land, commercial facilities, and residences within
their jurisdictions. Revenues collected from property taxes pay for local services including local
questions with verified answers
Margo signed a lease to rent a small building for her business. In exchange for the use of the
facility, Margo will pay monthly rent. What component of a legally binding contract does the
rent represent?
A. Component Parties
B. Consideration
C. Legality
D. Agreement - ANS ✔✔B) Consideration
In order for a contract to be legally binding, something of value must be exchanged. In this case,
the rent is being exchanged for space. Agreement requires an offer be made by one party and
accepted by the second party. Competent parties require those entering a contract to be of
legal age and to meet other criteria. Legality refers to the terms of the offer being within the
law.
One of the main reasons why individuals make investments based on their future financial
needs is to
A. develop a living will
B. avoid paying taxes
C. set up a trust fund
D. generate a retirement income - ANS ✔✔D) generate a retirement income
Most individuals analyze their future financial needs in order to make investments that will
generate income in the future. The reason for the investments is to have income to support
them during retirement. Individuals estimate future living expenses and make investments in
the hope of generating adequate retirement income. Individuals do not make investments
based on their future financial needs to avoid paying taxes, set up a trust fund, or develop a
living will.
, Which of the following is a name for a medium of exchange accepted and backed by the
government as payment for goods and services:
A. Currency
B. Credit cards
C. Money market accounts
D. Certificates of deposit - ANS ✔✔A) Currency
Currency is government issued specimen that are accepted as payment for goods and services.
Credit cards, money market accounts, and certificates of deposit are not mediums of exchange.
One advantage to setting attainable goals is that you
A. work harder to achieve a very high goal
B. can measure your progress
C. are less likely to become discouraged
D. can picture it in your mind - ANS ✔✔C) are less likely to become discouraged.
Attainable goals are realistic and within reach, so one advantage to setting attainable goals is
that you are less likely to become discouraged. Attainable goals will not make you work harder
to achieve a very high goal—very high goals do not fit the definition of attainable. Being able to
picture a goal in your mind is the result of setting a specific goal, not necessarily an attainable
one. Being able to measure your progress is the result of setting a measurable goal, also not
necessarily an attainable one.
What type of services do property taxes typically fund?
A. State/Provincial education programs and federal correctional facilities
B. National security programs and local road repairs
C. Local fire departments and local law-enforcement agencies
D. State/Provincial colleges and state/provincial social welfare initiatives - ANS ✔✔C) Local fire
departments and local law-enforcement agencies
Local governments levy property taxes on land, commercial facilities, and residences within
their jurisdictions. Revenues collected from property taxes pay for local services including local
