PERSONAL FINANCIAL CHAPTER 1
QUESTIONS WITH DETAILED
ANSWERS
Which of the following is not an example of a type of financial service that is focused on
payment services? In other words, which of the following does not involve payment of money
on your part? - ANS ✔✔Regular savings account
Common mistakes made when managing current cash needs include: - ANS ✔✔overspending.
leaving funds in low-interest accounts too long.
lacking sufficient liquid assets to pay current bills.
using savings for current expenses.
A current shortage of cash can be overcome by liquidating savings or borrowing. - ANS ✔✔True
A savings account provides a safe storage for funds to be used in the future. - ANS ✔✔True
In the context of categories of financial services, payment services allow you to pay expenses
and for other business activities. - ANS ✔✔True
Financial services include: - ANS ✔✔borrowing
payment services
, financial planning
savings
insurance
investments
Using savings for paying _________ expenses is one of the mistakes people make when
managing current cash needs. - ANS ✔✔current
If there is a shortage of cash, you will have two basic choices to cope with the situation:
________ from a savings or ________ . - ANS ✔✔spend
borrow
Saving funds for future use is necessary for financial: - ANS ✔✔safely
Which services allow you to transfer money to pay necessary expense and for other business
activities? - ANS ✔✔payment
Non-deposit institutions mentioned in the text include: - ANS ✔✔-investment companies
-brokerage firms
-life insurance companies
deposits include checking accounts and other payment methods. - ANS ✔✔demand
QUESTIONS WITH DETAILED
ANSWERS
Which of the following is not an example of a type of financial service that is focused on
payment services? In other words, which of the following does not involve payment of money
on your part? - ANS ✔✔Regular savings account
Common mistakes made when managing current cash needs include: - ANS ✔✔overspending.
leaving funds in low-interest accounts too long.
lacking sufficient liquid assets to pay current bills.
using savings for current expenses.
A current shortage of cash can be overcome by liquidating savings or borrowing. - ANS ✔✔True
A savings account provides a safe storage for funds to be used in the future. - ANS ✔✔True
In the context of categories of financial services, payment services allow you to pay expenses
and for other business activities. - ANS ✔✔True
Financial services include: - ANS ✔✔borrowing
payment services
, financial planning
savings
insurance
investments
Using savings for paying _________ expenses is one of the mistakes people make when
managing current cash needs. - ANS ✔✔current
If there is a shortage of cash, you will have two basic choices to cope with the situation:
________ from a savings or ________ . - ANS ✔✔spend
borrow
Saving funds for future use is necessary for financial: - ANS ✔✔safely
Which services allow you to transfer money to pay necessary expense and for other business
activities? - ANS ✔✔payment
Non-deposit institutions mentioned in the text include: - ANS ✔✔-investment companies
-brokerage firms
-life insurance companies
deposits include checking accounts and other payment methods. - ANS ✔✔demand
