Finance Study Guide 1st Semester Exam
Questions and Answers Graded A+
Individuals who win large lottery payouts - Correct answer-are more likely to
declare bankruptcy than those who don't.
What is financial capability? - Correct answer-Having the knowledge, skills, and
motivation to make appropriate decisions about your finances.
If Jonah wasn't saving his paycheck for college, he would use it to buy a used car.
What concept does the used car represent for Jonah? - Correct answer-opportunity
cost
Which of the following expenses would be considered a "need" instead of a
"want"? - Correct answer-monthly electric and natural gas bill
Should a person include "wants" when creating a budget? - Correct answer-Yes, a
budget should be realistic and include things that make us happy.
Which would be an example of a fixed expense? - Correct answer-paying your
auto loan bill
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,Tara doesn't get paid at the end of each month but most of her bills are due during
the third and fourth weeks of the month. What term best describes her problem? -
Correct answer-cash flow
Which best explains the concept of time value of money? - Correct answer-Money
received now is worth more than the same amount received in the future.
When it comes to private party transactions, the principle that often applies is
caveat emptor. What does that mean? - Correct answer-The buyer must do their
own research and due diligence.
You see an online ad from a private seller for a low mileage used car. It is priced at
less than half what it would normally sell for. The car looks great in the pictures.
What best explains the low price? - Correct answer-The advertisement is a scam
designed to defraud a potential buyer.
Sales and service contracts may be several pages long and contain fine print. What
should you do before signing any type of contract or agreement? - Correct answer-
Read it to make sure you understand all the costs, commitment, and terms of
service.
A person who has a high credit score will - Correct answer-pay less for credit than
those with lower scores.
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, Which is the best strategy to determine if you are on track to meet your financial
goals? - Correct answer-Regularly review account balances, debt and credit card
balances, and net worth.
An emergency fund is money set aside to cover the financial cost of an unexpected
event. Which would be the best use of your emergency fund? - Correct answer-
Paying for an expensive car repair not covered under warranty.
Which is the best strategy to avoid late fees and negative impacts to your credit
score? - Correct answer-Have bills automatically paid from a bank account.
Which is a variable expense? - Correct answer-entertainment
Why is it necessary to regularly review and revise your budget? - Correct answer-
Life changes will require changes to your financial plan.
How are charities different than businesses? - Correct answer-They do not pay
taxes on money they raise.
Which best describes charities? - Correct answer-non-profit organizations
Which is not a reason individuals and businesses support charities? - Correct
answer-They can receive a share of the charity's profits.
Which best describes the goal of playing Budget Challenge? - Correct answer-
Learning to become a more financially capable adult.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Questions and Answers Graded A+
Individuals who win large lottery payouts - Correct answer-are more likely to
declare bankruptcy than those who don't.
What is financial capability? - Correct answer-Having the knowledge, skills, and
motivation to make appropriate decisions about your finances.
If Jonah wasn't saving his paycheck for college, he would use it to buy a used car.
What concept does the used car represent for Jonah? - Correct answer-opportunity
cost
Which of the following expenses would be considered a "need" instead of a
"want"? - Correct answer-monthly electric and natural gas bill
Should a person include "wants" when creating a budget? - Correct answer-Yes, a
budget should be realistic and include things that make us happy.
Which would be an example of a fixed expense? - Correct answer-paying your
auto loan bill
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Tara doesn't get paid at the end of each month but most of her bills are due during
the third and fourth weeks of the month. What term best describes her problem? -
Correct answer-cash flow
Which best explains the concept of time value of money? - Correct answer-Money
received now is worth more than the same amount received in the future.
When it comes to private party transactions, the principle that often applies is
caveat emptor. What does that mean? - Correct answer-The buyer must do their
own research and due diligence.
You see an online ad from a private seller for a low mileage used car. It is priced at
less than half what it would normally sell for. The car looks great in the pictures.
What best explains the low price? - Correct answer-The advertisement is a scam
designed to defraud a potential buyer.
Sales and service contracts may be several pages long and contain fine print. What
should you do before signing any type of contract or agreement? - Correct answer-
Read it to make sure you understand all the costs, commitment, and terms of
service.
A person who has a high credit score will - Correct answer-pay less for credit than
those with lower scores.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, Which is the best strategy to determine if you are on track to meet your financial
goals? - Correct answer-Regularly review account balances, debt and credit card
balances, and net worth.
An emergency fund is money set aside to cover the financial cost of an unexpected
event. Which would be the best use of your emergency fund? - Correct answer-
Paying for an expensive car repair not covered under warranty.
Which is the best strategy to avoid late fees and negative impacts to your credit
score? - Correct answer-Have bills automatically paid from a bank account.
Which is a variable expense? - Correct answer-entertainment
Why is it necessary to regularly review and revise your budget? - Correct answer-
Life changes will require changes to your financial plan.
How are charities different than businesses? - Correct answer-They do not pay
taxes on money they raise.
Which best describes charities? - Correct answer-non-profit organizations
Which is not a reason individuals and businesses support charities? - Correct
answer-They can receive a share of the charity's profits.
Which best describes the goal of playing Budget Challenge? - Correct answer-
Learning to become a more financially capable adult.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
