FCS 340 EXAM 1 QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026

FCS 340 EXAM 1 QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026 Which of the following is not identified as a purpose of the book? - Answers Teach you to accumulate wealth. The authors suggested four answers to the question, "Why should I learn about family finance?" Which is not one of the four reasons? - Answers Community: Becoming a stronger citizen and member of your community. The second important question the authors suggested you ponder: "What are the profound principles upon which the stewardship perspective is based?" Which is not one of the four stewardship principles? - Answers Discipleship Of the four stewardship principles, if followed wisely, which is our gift back to God? - Answers Accountability The text suggests creating a budget that includes at least a percent allocation to long-term savings. - Answers 10 What does the author believe is the biggest financial mistake made by recent graduates? - Answers Buying a house beyond their means. Most financial planners recommend worth of living expenses set aside in a savings or checking account as an emergency fund. - Answers three to six months In the reading, the story of Elder Robert D. Hales and his new bride was shared. He was in the air force and they'd missed Christmas together. What did he want to buy his wife? - Answers A dress What budget category do the authors suggest commonly gets overlooked? - Answers Miscellaneous The authors recommend the investing mantra "get rich slowly." They recommend avoiding which of the following strategies? - Answers Speculation Which of the following statements about compound interest were made in the reading? Select all that apply. - Answers A marvelous work and a wonder Eighth wonder of the world Interest earning interest What should setting goals involve? - Answers Process of understanding yourself and your family. Trying to understand what God wants you to accomplish. What does the "S" in SMART goals refer to? - Answers Specific Which of the following financial elements are part of developing a plan of action? Select all that apply. - Answers Budget Planning for big-ticket purchases Plan for managing debt Plan for insurance Investment plan Plan for retirement Which of the following are Principles of Provident Living? Select all that apply. - Answers Being content with what you have Avoiding excessive debt Preparing for rainy-day emergencies All family financial records should be kept forever. - Answers False What is not an example of a fixed expense? - Answers Food What would not be categorized as a variable expense? - Answers Insurance payment One of the most often neglected budget categories is miscellaneous (the category for unexpected expenses). - Answers True Which of the following principles should guide effective family budgets? Select all that apply. - Answers Spend less than you earn. Keep good records. Use a budgeting method that meets individual and family needs. "Mad money" should be a budget category even though you aren't responsible for how it is spent. - Answers True For those who find living within a budget difficult, which of the following is the most straightforward method? - Answers Envelope method Attributes of the best budgeting method include which of the following? Select all that apply. - Answers Low cost Allow downloading of bills from banks and credit card companies Minimize the time spent on finances Relatively easy to use Which principle can help with us not buying things we don't need or haven't budgeted for? - Answers HALT When discussing tips for frugal living, the author suggests decreasing one's living expenses because it's easier to control the spending side than it is the income side of the budget equation. - Answers True Which of the following strategies were outlined to lower food costs? Select all that apply. - Answers H.A.L.T. Use a shopping list Buy store brands Pay cash Buy in bulk Take advantage of loss leaders A study conducted by MIT revealed that shoppers using a credit card spend more than those using cash. How much more? - Answers 100% Eating out at restaurants is an American craze—as a country, we spend more money at restaurants than we do at grocery stores. - Answers True While the focus of this lesson is on tips for frugal living, the author cautions us not to miss out on meaningful experiences due to unnecessary frugality. - Answers True What wasn't identified as a method to save money on transportation costs? - Answers Shopping around for the lowest rate auto loan possible. Which textbook recommendation in the area of saving money on recreation would Dave Ramsey be at greatest odds with? - Answers Using credit card reward miles to pay for flights. What does TVM stand for - Answers Time Value Money Define Inflation - Answers the increase in price you pay for service over time How does inflation happen? - Answers The supply of money vs. the supply of good and services What to do with inflation? - Answers AVOID IT LIKE THE PLAGUE What is interest? - Answers any use of your money that results in a return on investment. Define Compound Interest - Answers when you interest is earning interest Define Investment - Answers current commitment of your money with the expectation of financial returns Define Present Value - Answers the original value of money borrowed or invested Define Interest Rate - Answers the rate you will receive for investing at a specified compounding period for a specified period of time. Nominal Return - Answers the return on an investment before the impacts of inflation and taxes are taken into account After-tax return - Answers the return on your investment after taxes Real return - Answers your return after taxes and inflation Compounding periods - Answers the frequency with which interest is applied to your investment Define Payment - Answers a periodic amount invested or received during the life of the investment. Define Future Value - Answers the monetary value of an investment at some point the future after taking into account the present value, the interest rate, the # of compounding periods, and any payments. Lump sum - Answers one-time payment or investment Annuity - Answers the disbursement of money on a period basis Purchasing power - Answers the ability to purchase goods and services Opportunity cost - Answers the potential loss or gain that happens when one financial option is chosen over another Steps to a setting a Family Financial Plan - Answers 1. Decide what you are about 2. Evaluate your financial health 3. Define your family goals 4. Develop a plan of action 5. Implement your plan 6. Revise your plan as necassary Define Family Net Worth statement - Answers a value calculated by subtracting your family's liabilities by your family's assets. What is an income and expense statement? - Answers A record of your family's past cash inflows and outflows over a specified period of time Define cash inflow - Answers income available to be used for family expenses Cash outflows - Answers expenses, or items for which you must spend money fixed expenses - Answers Costs that do not change from month to month variable expenses - Answers expenses that change from month to month net worth statement - Answers A formal report that shows what an individual owns, what an individual owes, and the difference between the two.