ASYNCHRONOUS ACTIVITY – BUSINESS FINANCE

WEEK 2: FORMATIVE ASSESSMENT 1 (PERSONAL FINANCE)

FORMATIVE ASSESSMENT 1
General Directions:
1. Review your lesson on “Managing Personal Finance” (chapter 10 of your e-book).
2. If your class number is odd, answer set A. Otherwise, answer set B.
3. For Exercise 1, write TRUE or FALSE. For MULTIPLE CHOICE questions,
answer/indicate the letter (A, B, C, or D) of your answer. Use uppercase/capital letters
only.
4. You are given one week to submit/input your answer in our course site under
[BusFin Course Site] > [70 Asynchronous Session] > [W2 Team Work].

5. You are given one attempts for the whole week and the last attempt will be recorded
as formative assessment but we will have "No contribution = no attendance" policy.
6. You can send me an email for any clarifications or questions during office hours.

God bless and all the best!

1. Personal finance is an accounting process in which individuals or a family unit

determines the resources and the use of funds and excess funds.

2. The financial planning process allows an individual to control and evaluate his or her

financial status.

3. An in-depth financial plan can significantly enhance the quality of life and improve

satisfaction by maximizing uncertainty on an individual’s needs and resources.

4. One of the advantages of financial planning is that it can create more credits than the

average individual.

5. A person’s financial situation is first determined by his or her monthly income and

expenses.

6. A financial plan must be permanent in nature.

7. The hardest part of the financial planning process is its implementation phase.

8. A financial plan needs regular monitoring and re-evaluation for financial decision.

9. Financial position does not end in determining the individual’s net worth. It also

determines the liabilities for a particular period of time.

10. Property insurance is a kind of insurance that provides protection against risks to the

policyholder’s place of residence.

EXERCISE 2

Multiple Choice: Write the letter of the best answer.

1. Which of the following is considered by individuals in planning their personal finances?

B. Present needs

C. Relative needs

D. Family needs

2. In order to carry out whatever an individual wants, he or she needs careful planning

on _________________.

A. Financial needs

B. Personal needs

C. Both A and B

D. None of the above

3. Which of the following statements is/are the advantage/s of financial planning?

Statement I: It enhances the effectiveness in outsourcing, allocating, and

safeguarding the financial resources of individuals.

Statement II: It creates a feeling of independence and freedom from financial worries

as everything is in place even before the expenses come in.

Statement I Statement II

A. True false

B. True true

C. False true

D. False false

4. A person’s financial situation is first determined by ________

I. Total assets and liabilities

II. Monthly income and expenses

A. I only

B. I and II only

C. II and III only

D. I, II and III

5. It is the most important element of personal finance.

A. Financial planning

B. Estate planning

C. Tax planning

D. None of the above

6. The importance of doing a personal financial statement is to determine the individual’s

_____.

A. Financial strength, credibility, liquidity, and solvency

B. Financial strength, weaknesses, liquidity, and solvency

C. Financial strength, weaknesses, profitability and solvency

D. Financial strength, weaknesses, liquidity, and savings

7. Which of the following matters in the development of a personal goal?

I. Short-term goal II. Long-term goal

A. I only

B. II only

C. I and II

D. None of the above

8. Which of the following may be considered as a long-term goal?

B. Acquisition of a new furniture

C. A retirement fund of ₱5,000,000

D. Acquisition of new machine

9. Which of the following is not part of the personal financial planning process?

A. Development of personal goals

B. Development of a financial plan

C. Preparation of a retirement plan

D. Monitoring and re-evaluation

10. Which of the following comes first in personal financial planning?

A. Creating a financial plan

B. Developing personal goals

C. Implementing the financial plan

D. Monitoring and re-evaluation

EXERCISE 3

1. It determines the assets and liabilities of an individual.

A. Net income

B. Financial position

C. Cash flow

D. None of the above

2. It is the difference between the revenues and expenses.

A. Equity
 B. Current assets

C. Savings

D. cash

3. it serves as an individual’s checking balance to determine the appropriate lifestyle to

maintain.

A. Profit

B. Current assets

C. Net worth

D. cash

4. according to Jason Anthony, most personal finance experts advise not to spend more

than ___ of the monthly gross income on a mortgage payment.

A. 10%

B. 18%

C. 20%

D. 28%

5. With the possibilities of risks in the future, business and individuals are into _____ for

protection.

A. Spending

B. Insurance

C. Saving

D. investing
6. it is the amount paid by individuals to the insurance company on a monthly, quarterly,

semi-annual, or yearly basis in order to be qualified for any benefits that the insurance

company may give to the insurer or beneficiary.

A. Premium

B. Fee

C. Cost

D. tax

7. It is a kind of insurance that provides protection to the policyholder’s place of

residence.

A. Property insurance

B. Motor vehicle insurance

C. Health insurance

D. Disability insurance

8. It is an insurance that covers, partial or full, losses from accidents, flood, and theft.

A. Property insurance

B. Motor vehicle insurance

C. Health insurance

D. Disability insurance

9. It is a plan in which the insured is paying a regular premium, normally per month, in

order to replace the income lost because of injury or sickness.

A. Property insurance

B. Motor vehicle insurance

C. Health insurance
 D. Disability insurance

10. It is a non-traditional life insurance plan with the benefits of saving in which the

policyholder can choose where to invest the money in the savings portion of the

insurance product.

A. Variable life insurance

B. Life insurance

C. Mutual funds

D. Equity funds

EXERCISE 4

1. It is a financial plan on how to finance a project.

A. Investment planning

B. Estate planning

C. Retirement planning

D. Tax planning

2. It is the process of deferring the income received to the succeeding year and

maximizing the expenses accrued in the current year.

A. Investment planning

B. Estate planning

C. Retirement planning

D. Tax planning

3. Buying stocks, bonds, mutual funds, unit investment trust fund, and house and lot is

an example of ______.
 A. Investment planning

B. Estate planning

C. Retirement planning

D. Tax planning

4. It captures the very essence of financial planning.

A. Investment planning

B. Estate planning

C. Retirement planning

D. Tax planning

5. The pension to be received by government employees will come from ______.

A. GSIS

B. SSS

C. Both A and B

D. None of the above

6. The pension to be received by employees coming from the private sector will come

from _____.

A. GSIS

B. SSS

C. Both A and B

D. None of the above

7. An estate represents the assets of a _______ person after all the liabilities and taxes

had been exhausted.

A. Living
 B. Deceased

C. Both A and B

D. None of the above

8. It is a tool used by individuals who want an assurance that the assets accumulated

are distributed with minimum taxes to the people of their desire.

A. Investment planning

B. Estate planning

C. Retirement planning

D. Tax planning

9. It is a legal document showing how the estate of the deceased person is distributed

upon death.

A. Trust

B. Limited power of attorney

C. General power of attorney

D. wills

10. A trust is a legal document in which the ____ is the one that creates the trust while the

____ is the financial institution or person who will manage the assets of the _____ in

favor of the beneficiary.

A. Trustee, trustor, trustee

B. Trustor, trustee, trustee

C. Trustor, trustee, trustor

D. Trustor, trustor, trustee