Unit 5: Personal Finance
Business & Finance · Unit 5 · Paper 2

Personal Finance unit test

A test on this unit alone, marked as a percentage and a letter grade — for the test your class is actually sitting, rather than for May. Answer everything, then submit once: seeing the answer to question 3 before attempting question 4 makes the final percentage meaningless.

Paper 1Paper 2Paper 3
Each paper is built from this unit’s 32 terms and is the same for everyone, so a teacher can assign “Unit 5, Paper 2” and every student sits the identical test. Multiple choice is marked objectively; the written sections you mark yourself against the model answer and rubric.
Suggested time 31 min 28 points0/17 attempted
1

Emergency fund sizing

2

Risk tolerance vs risk capacity

3

Mutual fund vs ETF

4

Term vs whole life insurance

5

Sinking fund

6

Credit utilization ratio

7

Annual percentage rate

8

Expense ratio

9

Zero-based budgeting

10

Fixed vs discretionary spending

11

Compound growth formula

12

Principal, interest and term

Short answer 1. Define or explain: Annual percentage yield

3 pts

Short answer 2. Define or explain: Index fund

3 pts

Short answer 3. Define or explain: Debt-to-income ratio

3 pts

Short answer 4. Define or explain: Employer retirement match

3 pts

Free response

4 pts

An individual is comparing a Traditional IRA and a Roth IRA for retirement savings.

Explain the tax treatment of contributions to a Traditional IRA.

Explain the tax treatment of withdrawals from a Roth IRA during retirement.

Under what circumstances might an individual prefer a Roth IRA over a Traditional IRA?

Describe the concept of compound interest and its importance in retirement planning.