Focus on Personal Finance 7th
Edition Test Bank
100% Certified Solutions & Full
Chapter Coverage by Kapoor et al
Comprehensive Question Bank with Answers
August 25, 2025
,Contents
1 Personal Financial Planning in Action 2
2 Money Management Skills 6
3 Taxes in Your Financial Plan 6
4 Savings and Payment Services 7
5 Consumer Credit 8
6 Choosing a Source of Credit 8
7 Insurance 8
8 Home and Automobile Insurance 9
9 Health and Disability Insurance 9
10 Financial Planning with Life Insurance 9
11 Investing Basics 9
12 Investing in Stocks 10
13 Investing in Bonds 10
14 Retirement and Estate Planning 10
15 Appendix: Time Value of Money 10
16 Additional Questions and Answers 11
1
, 1 Personal Financial Planning in Action
1. If inflation is expected to be 9.50 percent, how long will it take for prices to double?
A) 5.58 years B) 6.58 years C) 17.58 years D) 11.58 years E) 7.58 years
Answer: E
2. If a $12,000 investment earns interest of $1,560 in 1 year, what is its rate of return?
A) 100 percent B) 79 percent C) 26 percent D) 58 percent E) 13 percent
Answer: E
3. If a $10,000 investment earns a 3.8 percent annual return, what should its value be
after 1 year?
A) $10,000 B) $3,900 C) $10,380 D) $10,038 E) $3,800
Answer: C
4. What is personal financial planning?
The process of managing your money to achieve personal economic satisfaction.
Answer: The process of managing your money to achieve personal economic sat-
isfaction.
5. What is financial literacy?
The knowledge and skillset necessary to be an informed consumer and manage
finances effectively.
Answer: The knowledge and skillset necessary to be an informed consumer and
manage finances effectively.
6. What are the advantages of financial literacy?
It empowers us to make smart financial decisions, including budgeting, saving,
borrowing, and investing.
Answer: It empowers us to make smart financial decisions, including budgeting,
saving, borrowing, and investing.
7. What are the steps in the financial planning process?
1) Determine current financial situation 2) Develop goals 3) Identify alternatives
4) Evaluate alternatives 5) Implement plan 6) Revise plan.
Answer: 1) Determine current financial situation 2) Develop goals 3) Identify
alternatives 4) Evaluate alternatives 5) Implement plan 6) Revise plan.
8. What is a formalized report that summarizes your current financial situation?
A financial plan.
Answer: A financial plan.
9. What is inflation?
A rise in the general level of prices.
Answer: A rise in the general level of prices.
10. What is opportunity cost?
What a person gives up by making a choice.
Answer: What a person gives up by making a choice.
11. What is future value?
The amount to which current savings will increase based on a certain interest rate
and time period.
2
Edition Test Bank
100% Certified Solutions & Full
Chapter Coverage by Kapoor et al
Comprehensive Question Bank with Answers
August 25, 2025
,Contents
1 Personal Financial Planning in Action 2
2 Money Management Skills 6
3 Taxes in Your Financial Plan 6
4 Savings and Payment Services 7
5 Consumer Credit 8
6 Choosing a Source of Credit 8
7 Insurance 8
8 Home and Automobile Insurance 9
9 Health and Disability Insurance 9
10 Financial Planning with Life Insurance 9
11 Investing Basics 9
12 Investing in Stocks 10
13 Investing in Bonds 10
14 Retirement and Estate Planning 10
15 Appendix: Time Value of Money 10
16 Additional Questions and Answers 11
1
, 1 Personal Financial Planning in Action
1. If inflation is expected to be 9.50 percent, how long will it take for prices to double?
A) 5.58 years B) 6.58 years C) 17.58 years D) 11.58 years E) 7.58 years
Answer: E
2. If a $12,000 investment earns interest of $1,560 in 1 year, what is its rate of return?
A) 100 percent B) 79 percent C) 26 percent D) 58 percent E) 13 percent
Answer: E
3. If a $10,000 investment earns a 3.8 percent annual return, what should its value be
after 1 year?
A) $10,000 B) $3,900 C) $10,380 D) $10,038 E) $3,800
Answer: C
4. What is personal financial planning?
The process of managing your money to achieve personal economic satisfaction.
Answer: The process of managing your money to achieve personal economic sat-
isfaction.
5. What is financial literacy?
The knowledge and skillset necessary to be an informed consumer and manage
finances effectively.
Answer: The knowledge and skillset necessary to be an informed consumer and
manage finances effectively.
6. What are the advantages of financial literacy?
It empowers us to make smart financial decisions, including budgeting, saving,
borrowing, and investing.
Answer: It empowers us to make smart financial decisions, including budgeting,
saving, borrowing, and investing.
7. What are the steps in the financial planning process?
1) Determine current financial situation 2) Develop goals 3) Identify alternatives
4) Evaluate alternatives 5) Implement plan 6) Revise plan.
Answer: 1) Determine current financial situation 2) Develop goals 3) Identify
alternatives 4) Evaluate alternatives 5) Implement plan 6) Revise plan.
8. What is a formalized report that summarizes your current financial situation?
A financial plan.
Answer: A financial plan.
9. What is inflation?
A rise in the general level of prices.
Answer: A rise in the general level of prices.
10. What is opportunity cost?
What a person gives up by making a choice.
Answer: What a person gives up by making a choice.
11. What is future value?
The amount to which current savings will increase based on a certain interest rate
and time period.
2
