Monday, March 9, 2015

Mid-term Questions Study Guide

The WHAE Personal Finance Mid-term is comprised of 2 parts: 

Part 1 - 10 short-answer questions worth 7 points each

Part 2 - 1 Take-home essay question analyzing two hypothetical individuals' net income cash flows.   Parts 2A and 2B are worth 15 points each.  So the take-home part is worth 30 points out of 100.




Part 1 Short-answer questions deal with the following terms and topics (you should know the definitions of them all):


  • the difference between wants and needs
  • what is a budget?
  • what are SMART goals
  • what is the difference between  a short-term goal  and a long-term goal?
  • what is the difference between net worth and net income?
  • what is earned income?
  •  what is inflation?
  • what has been the average rate of inflation in America since 1926?
  • be able to provide examples of good vs bad uses of credit (i.e. debt)
  • what is the difference between fixed vs variable expenses?
  • What is an emergency fund or rainy day fund




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