Personal Finance - Section 1 Assesment

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School

Western Governors University *

*We aren’t endorsed by this school

Course

363

Subject

Finance

Date

Jan 9, 2024

Type

pdf

Pages

5

Uploaded by ProfFog22214

Report
12/31/23, 4:29 AM Personal Finance | WGU-CGP-OEX https://apps.cgp-oex.wgu.edu/wgulearning/course/course-v1:WGUx+OEX0177+v01/block-v1:WGUx+OEX0177+v01+type@sequential+block@408cc4d7e3844921ace95e5d0e33ff02/block-v1:WGUx+OEX0177+v0… 2/13 Total Assets $45,000 Total Liabilities $22,000 Net Worth $23,000 Section 1 Assessment 29.696969696969695/35.0 points (ungraded) How prepared are you for the objective assessment? This test is designed to help you see if you are ready to demonstrate mastery of the following competency: The learner applies basic financial principles to personal budgeting, cash management, and the use of personal credit. Question 1 Sophia is creating a personal budget. She starts by listing her monthly income and expenses. Which financial statement did Sophia create? Correct: The cash-flow statement is a summary of income and expenses for a given period of time. Question 2 Malik is reviewing a list of assets and liabilities. He uses the information shown in the table to evaluate his net worth. Which financial statement is Malik reviewing? Correct: A balance sheet provides a quick view of one's assets, liabilities, and net worth. Question 3 Diego is reviewing his personal budget to see where he can control his spending so he can save more money each month. Which type of expenses would Diego be reviewing? Cash-flow statement Net worth Financial ratio Balance sheet Income and expense statement Cash-flow statement Cash equivalent statement Balance sheet Personal Finance
12/31/23, 4:29 AM Personal Finance | WGU-CGP-OEX https://apps.cgp-oex.wgu.edu/wgulearning/course/course-v1:WGUx+OEX0177+v01/block-v1:WGUx+OEX0177+v01+type@sequential+block@408cc4d7e3844921ace95e5d0e33ff02/block-v1:WGUx+OEX0177+v0… 3/13 Category (Income) / Expense Income ($5,000) Rent $1,200 Electricity $150 Automobile loan $250 Groceries $150 Internet $60 Mobile Phone $80 Correct: Variable expenses are those over which an individual has control. This is where one can look to save money each month. Question 4 Mei receives $5,000 per month in after-tax pay. She is reviewing the following information for the current month. Which type of financial statement is Mei reviewing? Correct: The cash-flow statement lists out all income and expenses for a given period. Question 5 Fatima noticed that she consistently has $300 left over each month, so she wants to start saving money. She researches the different types of accounts she could open. Fatima decides to open a money market account. Why would Fatima choose to open a money market account over a traditional savings account? Fixed Variable Recurring Surplus Net worth statement Cash equivalent statement Cash-flow statement Balance sheet A money market pays a higher interest rate. A traditional savings account requires a high minimum balance. A money market is covered by the Federal Deposit Insurance Corporation (FDIC). Traditional savings account deposits are invested into financial markets. Personal Finance
12/31/23, 4:29 AM Personal Finance | WGU-CGP-OEX https://apps.cgp-oex.wgu.edu/wgulearning/course/course-v1:WGUx+OEX0177+v01/block-v1:WGUx+OEX0177+v01+type@sequential+block@408cc4d7e3844921ace95e5d0e33ff02/block-v1:WGUx+OEX0177+v0… 4/13 Asset Value Cash Value of Life Insurance $50,000 Automobile $15,000 Savings Account $25,000 Wedding ring $1500 Correct: A money market account pays a higher interest rate than traditional savings accounts. Question 6 Kamal is reviewing his list of assets, shown here. Which of Kamal's assets is an investment asset? Correct: Life insurance is an investment asset. Question 7 Anika looks through her balance sheet. She is categorizing her liabilities. Which liability would be considered a short-term liability? Correct: Credit card account balances are considered a short-term liability, as they can be paid off within one year. Question 8 Eva is evaluating her personal budget. She is certain there are things she could do differently to improve her financial habits. What is one suggestion that financial experts make to turn bad habits into good ones? Cash Value of Life insurance Savings account Wedding ring Automobile Student loan Automobile loan Credit card balance Mortgage Search for checking accounts with low monthly fees Keep checking account balance high Personal Finance
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12/31/23, 4:29 AM Personal Finance | WGU-CGP-OEX https://apps.cgp-oex.wgu.edu/wgulearning/course/course-v1:WGUx+OEX0177+v01/block-v1:WGUx+OEX0177+v01+type@sequential+block@408cc4d7e3844921ace95e5d0e33ff02/block-v1:WGUx+OEX0177+v0… 5/13 Correct: Financial experts suggest paying all bills on time to avoid paying late fees or interest. Question 9 Maria knows that she has to keep certain documents secure, especially ones that relate to her personal budget and net worth. Which document is an example of a financial document that Maria should keep in a fireproof home safe? Correct: A list of items that are stored in a safe-deposit box is an example of a financial document that Maria would keep at home. Question 10 Jack is analyzing his personal budget to see how healthy it is. He knows there are several ratios that he can calculate to determine health. Which financial ratio will Jack need to calculate to determine whether he owns enough things with monetary value to meet his debt obligations? Correct: This is calculated by dividing total assets by total debt. A high ratio is desirable. Question 11 Leilani wants to save money, and she prefers to do so in a traditional savings account. Which monetary asset provider should Leilani use? Keep checking account balance high Pay all monthly bills on time Open one savings account only Copies of income tax filings for the past three years List of credit card accounts and telephone numbers List of safe-deposit box contents Financial institutions and account numbers Debt payments-to-disposable-income ratio Asset-to-debt ratio Debt-to-income ratio Liquidity ratio Brokerage firm Depository institution Insurance company Mutual funds Personal Finance
12/31/23, 4:29 AM Personal Finance | WGU-CGP-OEX https://apps.cgp-oex.wgu.edu/wgulearning/course/course-v1:WGUx+OEX0177+v01/block-v1:WGUx+OEX0177+v01+type@sequential+block@408cc4d7e3844921ace95e5d0e33ff02/block-v1:WGUx+OEX0177+v0… 6/13 Correct: Depository institutions, or banks, offer many financial services including checking and savings accounts. Question 12 Maya wants to manage her monetary assets. She knows she needs to protect herself from a financial crisis at her bank. She opens two individual accounts at two separate financial institutions in order to keep both accounts less than $250,000. How will this help Maya protect her monetary assets? Correct: The FDIC insurance is a reason to open more than one account, so that less than $250,000, the maximum insured amount, can be kept in each account. Question 13 Ren learned about the Federal Deposit Insurance Corporation (FDIC), so he wants to be sure his new savings account is covered. Which financial institution should Ren use to open an account to be sure it is FDIC insured? Correct: Accounts held at depository institutions are federally insured to $250,000 per person across all accounts held at that bank. Question 14 Oliver wants to grow his monetary assets. He decides to check into purchasing bonds and other investments. Which monetary asset provider should Oliver meet with? The Federal Deposit Insurance Corporation insures each account against loss up to $250,000 per account. Having accounts at two separate banks will help Maya save money on banking fees. Having an account at two separate banks lessens the likelihood that both banks would go out of business at the same time. Choosing two separate financial institutions ensures the highest possible interest rates for Maya. Depository institution Brokerage firm Mutual funds Bond investment Insurance company Thrift institution Stock brokerage firm Mutual fund company Personal Finance