Personal Finance Comprehensive Final – Complete Review with Practice Questions and Correct Answers
on Budgeting, Credit, Insurance, Taxes, and Investments
What does taking responsibility for personal financial decisions involve? - correct answer
Making informed choices about money management
What is one consequence of NOT taking responsibility for your financial decisions? - correct
answer Higher risk of debt and financial instability
What is a key factor in decision-making for personal finance? - correct answer Evaluating
financial priorities and options
How are needs defined in personal finance? - correct answer Essential expenses for daily living
What is the purpose of a cost-benefit analysis in finance? - correct answer Comparing costs to
potential benefits
What do the letters in SMART goals represent? - correct answer Specific, Measurable,
Attainable, Realistic, and Timely
What is a strategy for informed purchasing decisions? - correct answer Researching product
quality and price
Why is budgeting critical in personal finance? - correct answer It tracks income and expenses
How does social media marketing affect spending? - correct answer It encourages impulsive
purchases
What is a method to safeguard financial information? - correct answer Using secure websites
for transactions
What defines identity theft in personal finance? - correct answer Stealing personal financial
information
What is an insurance claim? - correct answer A request for loss compensation
Who is an insurance beneficiary? - correct answer The recipient of policy benefits
What is an insurance deductible? - correct answer The amount paid before coverage starts
What is an insurance policy? - correct answer A contract detailing coverage terms
What is an insurance premium? - correct answer The cost of maintaining coverage
Who is the insured in an insurance policy? - correct answer The person covered by the policy
Why does a younger driver typically have higher insurance premiums? - correct answer They
are statistically at a higher risk of accidents
What is a goal of risk management methods? - correct answer Minimizing financial losses
Which type of insurance is required by law in most U.S. states for drivers? - correct answer
Liability Insurance
, Personal Finance Comprehensive Final – Complete Review with Practice Questions and Correct Answers
on Budgeting, Credit, Insurance, Taxes, and Investments
Jose's renters insurance has a $500 deductible. After a theft, he files a claim for a stolen stereo
worth $800. How much will his insurance company pay? - correct answer $300 - Jose has to pay
a $500 deductible before the insurance company will pay so the insurance company will pay the
$300 balance
What risk management method involves avoiding activities that cause risk? - correct answer
Risk Avoidance
What risk management method involves taking steps to lessen risk impact? - correct answer
Risk Reduction
What risk management method involves accepting potential risk outcomes? - correct answer
Risk Assumption
What risk management method involves shifting risk to another party (i.e., Insurance
company)? - correct answer Risk Transfer
What does liability coverage in auto insurance protect? - correct answer Damages caused to
others
What is a deductible in auto insurance? - correct answer The amount paid before coverage
What does comprehensive auto insurance cover? - correct answer Non-collision damages like
theft
What is collision insurance? - correct answer Coverage for collision damages
Insurance to cover you financially if you're in an accident caused by someone who has no
insurance or not enough insurance to cover damages. - correct answer
Uninsured/Underinsured Coverage
How do risk factors influence insurance premiums? - correct answer Higher risks increase
premiums
Risk factors that increase insurance premiums include: - correct answer 1. Poor driving records
2. Younger drivers
3. Expensive vehicles
What is a copay in health insurance? - correct answer A fixed amount for services
What is a health insurance deductible? - correct answer Amount paid before coverage
What are out-of-pocket costs? - correct answer Expenses paid by the insured
What is a pre-existing condition? - correct answer An illness or condition present before
insurance coverage begins
on Budgeting, Credit, Insurance, Taxes, and Investments
What does taking responsibility for personal financial decisions involve? - correct answer
Making informed choices about money management
What is one consequence of NOT taking responsibility for your financial decisions? - correct
answer Higher risk of debt and financial instability
What is a key factor in decision-making for personal finance? - correct answer Evaluating
financial priorities and options
How are needs defined in personal finance? - correct answer Essential expenses for daily living
What is the purpose of a cost-benefit analysis in finance? - correct answer Comparing costs to
potential benefits
What do the letters in SMART goals represent? - correct answer Specific, Measurable,
Attainable, Realistic, and Timely
What is a strategy for informed purchasing decisions? - correct answer Researching product
quality and price
Why is budgeting critical in personal finance? - correct answer It tracks income and expenses
How does social media marketing affect spending? - correct answer It encourages impulsive
purchases
What is a method to safeguard financial information? - correct answer Using secure websites
for transactions
What defines identity theft in personal finance? - correct answer Stealing personal financial
information
What is an insurance claim? - correct answer A request for loss compensation
Who is an insurance beneficiary? - correct answer The recipient of policy benefits
What is an insurance deductible? - correct answer The amount paid before coverage starts
What is an insurance policy? - correct answer A contract detailing coverage terms
What is an insurance premium? - correct answer The cost of maintaining coverage
Who is the insured in an insurance policy? - correct answer The person covered by the policy
Why does a younger driver typically have higher insurance premiums? - correct answer They
are statistically at a higher risk of accidents
What is a goal of risk management methods? - correct answer Minimizing financial losses
Which type of insurance is required by law in most U.S. states for drivers? - correct answer
Liability Insurance
, Personal Finance Comprehensive Final – Complete Review with Practice Questions and Correct Answers
on Budgeting, Credit, Insurance, Taxes, and Investments
Jose's renters insurance has a $500 deductible. After a theft, he files a claim for a stolen stereo
worth $800. How much will his insurance company pay? - correct answer $300 - Jose has to pay
a $500 deductible before the insurance company will pay so the insurance company will pay the
$300 balance
What risk management method involves avoiding activities that cause risk? - correct answer
Risk Avoidance
What risk management method involves taking steps to lessen risk impact? - correct answer
Risk Reduction
What risk management method involves accepting potential risk outcomes? - correct answer
Risk Assumption
What risk management method involves shifting risk to another party (i.e., Insurance
company)? - correct answer Risk Transfer
What does liability coverage in auto insurance protect? - correct answer Damages caused to
others
What is a deductible in auto insurance? - correct answer The amount paid before coverage
What does comprehensive auto insurance cover? - correct answer Non-collision damages like
theft
What is collision insurance? - correct answer Coverage for collision damages
Insurance to cover you financially if you're in an accident caused by someone who has no
insurance or not enough insurance to cover damages. - correct answer
Uninsured/Underinsured Coverage
How do risk factors influence insurance premiums? - correct answer Higher risks increase
premiums
Risk factors that increase insurance premiums include: - correct answer 1. Poor driving records
2. Younger drivers
3. Expensive vehicles
What is a copay in health insurance? - correct answer A fixed amount for services
What is a health insurance deductible? - correct answer Amount paid before coverage
What are out-of-pocket costs? - correct answer Expenses paid by the insured
What is a pre-existing condition? - correct answer An illness or condition present before
insurance coverage begins
