1
,TEST BANK FOR ff ff
Introduction to Personal Finance Beginning Your Financial Journey, 2nd Edition
ff ff ff ff ff ff ff ff ff
John E. Grable, Lance Palmer
ff ff ff ff ff
Chapter 1-10 ff
Chapter 1 ff Beginning Your Financial Journey: The Interior Finance Point of View
ff ff ff ff ff ff ff ff ff
1) Which of the following refers to one's ability to understand and use personal
ff ff ff ff ff ff ff ff ff ff ff ff
finance information?
ff ff
A) Financial risk tolerance. ff ff
B) Financial well-being. ff
C) Financial knowledge. ff
D) Financial ability. ff
Answer: C
ff f f
Explanation: Financial knowledge is the ability to understand personal finance information.
f f ff ff ff ff ff ff ff ff ff
Knowing who you are, where you want to go, and what skills you currently possess are essential
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
factors shaping your financial journey.
ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
2) People who believe that what happens to them is based on fate or luck might view their financial
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
journey as being uncertain. This is an example of
ff ff ff ff ff ff ff ff ff
A) financial risk tolerance. ff ff
B) financial literacy. ff
C) feelings of control. ff ff
D) financial ability. ff
Answer: C
ff f f
Explanation: Feelings of control is the amount of control you feel you have when making
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
financial decisions. People who believe that what happens to them is based on luck or fate
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
might view their financial journey as uncertain.
ff ff ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: C
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
2
,3) Internal finance includes your ff ff ff
A) financial knowledge. ff
B) financial risk tolerance. ff ff
C) feelings of control. ff ff
D) All of the choices are correct.
ff ff ff ff ff
Answer: D
ff f f
Explanation: Internal finance is essentially the combination of financial knowledge, financial
f f ff ff ff ff ff ff ff ff ff
risk tolerance, and feelings of control.
ff ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
4) Which of the following refers to your confidence and peace of mind regarding your
ff ff ff ff ff ff ff ff ff ff ff ff ff
financial situation?
ff ff
A) Financial literacy. ff
B) Financial well-being. ff
C) Financial knowledge. ff
D) Financial ability. ff
Answer: B
ff f f
Explanation: Financial well-being is your confidence and peace of mind regarding your
f f ff ff ff ff ff ff ff ff ff ff
financial situation. Your financial well-being will increase as you apply your financial
ff ff ff ff ff ff ff ff ff ff ff ff
knowledge, develop skills, and organize your finances to achieve your personal goals.
ff ff ff ff ff ff ff ff ff ff ff ff
Diff: 2 ff
LO: 1.1, Section 1.1
f f ff ff
Bloom: C
ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
5) In addition to financial knowledge, which of the following is important in shaping your view of
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
the financial world?
ff ff ff
A) Financial risk tolerance, only. ff ff ff
B) Feelings of control, only. ff ff ff
C) Financial well-being only. ff ff
D) Financial risk tolerance and feelings of control. ff ff ff ff ff ff
Answer: D
ff f f
Explanation: Our financial decisions can be based on a biased view of the financial world,
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
which is based on the combination of our financial knowledge, financial risk tolerance, and
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
feelings of control.
ff ff ff ff
Diff: 2 ff
LO: 1.1, Section
f f ff
1.1 Bloom: C
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
3
, 6) Which of the following refers to your willingness to engage in financial endeavors that
ff ff ff ff ff ff ff ff ff ff ff ff ff
have uncertain outcomes?
ff ff ff
A) Financial literacy. ff
B) Financial risk tolerance. ff ff
C) Financial knowledge. ff
D) Financial ability. ff
Answer: B
ff f f
Explanation: Your financial risk tolerance is your willingness to engage in financial
f f ff ff ff ff ff ff ff ff ff ff
endeavors that have uncertain outcomes.
ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
7) Which of the following is measured by adding up how much the United States produces
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
in goods and services in a year?
ff ff ff ff ff ff ff
A) Gross domestic product. ff ff
B) The cost of goods sold. ff ff ff ff
C) Financial literacy. ff
D) Financial risk tolerance. ff ff
Answer: A
ff f f
Explanation: Gross domestic product (GDP) is measured by adding up how much a country
f f ff ff ff ff ff ff ff ff ff ff ff ff
produces in goods and services in a year.
ff ff ff ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
8) How much of GDP consists of consumer spending?
ff ff ff ff ff ff ff
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D f f f f
Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearly two-thirds (66%) of GDP
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
consists of consumer spending.
ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
4
,TEST BANK FOR ff ff
Introduction to Personal Finance Beginning Your Financial Journey, 2nd Edition
ff ff ff ff ff ff ff ff ff
John E. Grable, Lance Palmer
ff ff ff ff ff
Chapter 1-10 ff
Chapter 1 ff Beginning Your Financial Journey: The Interior Finance Point of View
ff ff ff ff ff ff ff ff ff
1) Which of the following refers to one's ability to understand and use personal
ff ff ff ff ff ff ff ff ff ff ff ff
finance information?
ff ff
A) Financial risk tolerance. ff ff
B) Financial well-being. ff
C) Financial knowledge. ff
D) Financial ability. ff
Answer: C
ff f f
Explanation: Financial knowledge is the ability to understand personal finance information.
f f ff ff ff ff ff ff ff ff ff
Knowing who you are, where you want to go, and what skills you currently possess are essential
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
factors shaping your financial journey.
ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
2) People who believe that what happens to them is based on fate or luck might view their financial
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
journey as being uncertain. This is an example of
ff ff ff ff ff ff ff ff ff
A) financial risk tolerance. ff ff
B) financial literacy. ff
C) feelings of control. ff ff
D) financial ability. ff
Answer: C
ff f f
Explanation: Feelings of control is the amount of control you feel you have when making
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
financial decisions. People who believe that what happens to them is based on luck or fate
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
might view their financial journey as uncertain.
ff ff ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: C
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
2
,3) Internal finance includes your ff ff ff
A) financial knowledge. ff
B) financial risk tolerance. ff ff
C) feelings of control. ff ff
D) All of the choices are correct.
ff ff ff ff ff
Answer: D
ff f f
Explanation: Internal finance is essentially the combination of financial knowledge, financial
f f ff ff ff ff ff ff ff ff ff
risk tolerance, and feelings of control.
ff ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
4) Which of the following refers to your confidence and peace of mind regarding your
ff ff ff ff ff ff ff ff ff ff ff ff ff
financial situation?
ff ff
A) Financial literacy. ff
B) Financial well-being. ff
C) Financial knowledge. ff
D) Financial ability. ff
Answer: B
ff f f
Explanation: Financial well-being is your confidence and peace of mind regarding your
f f ff ff ff ff ff ff ff ff ff ff
financial situation. Your financial well-being will increase as you apply your financial
ff ff ff ff ff ff ff ff ff ff ff ff
knowledge, develop skills, and organize your finances to achieve your personal goals.
ff ff ff ff ff ff ff ff ff ff ff ff
Diff: 2 ff
LO: 1.1, Section 1.1
f f ff ff
Bloom: C
ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
5) In addition to financial knowledge, which of the following is important in shaping your view of
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
the financial world?
ff ff ff
A) Financial risk tolerance, only. ff ff ff
B) Feelings of control, only. ff ff ff
C) Financial well-being only. ff ff
D) Financial risk tolerance and feelings of control. ff ff ff ff ff ff
Answer: D
ff f f
Explanation: Our financial decisions can be based on a biased view of the financial world,
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
which is based on the combination of our financial knowledge, financial risk tolerance, and
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
feelings of control.
ff ff ff ff
Diff: 2 ff
LO: 1.1, Section
f f ff
1.1 Bloom: C
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
3
, 6) Which of the following refers to your willingness to engage in financial endeavors that
ff ff ff ff ff ff ff ff ff ff ff ff ff
have uncertain outcomes?
ff ff ff
A) Financial literacy. ff
B) Financial risk tolerance. ff ff
C) Financial knowledge. ff
D) Financial ability. ff
Answer: B
ff f f
Explanation: Your financial risk tolerance is your willingness to engage in financial
f f ff ff ff ff ff ff ff ff ff ff
endeavors that have uncertain outcomes.
ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
7) Which of the following is measured by adding up how much the United States produces
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
in goods and services in a year?
ff ff ff ff ff ff ff
A) Gross domestic product. ff ff
B) The cost of goods sold. ff ff ff ff
C) Financial literacy. ff
D) Financial risk tolerance. ff ff
Answer: A
ff f f
Explanation: Gross domestic product (GDP) is measured by adding up how much a country
f f ff ff ff ff ff ff ff ff ff ff ff ff
produces in goods and services in a year.
ff ff ff ff ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
8) How much of GDP consists of consumer spending?
ff ff ff ff ff ff ff
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D f f f f
Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearly two-thirds (66%) of GDP
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
consists of consumer spending.
ff ff ff ff
Diff: 1 ff
LO: 1.1, Section
f f ff
1.1 Bloom: K
ff ff f f
AACSB / IMA: none; ff ff f f
none AICPA: FC: none
ff ff f f ff
Min: 1 f f f f
4
