What is the purpose of the finally clause of a try-catch-finally statement?

The finally clause is used to provide the capability to execute code no matter whether or not an exception is thrown or caught. If an exception occurs and there is a return statement in catch block, the finally block is still executed. The finally block will not be executed when the System.exit(0) statement is executed earlier or on system shut down earlier or the memory is used up earlier before the thread goes to finally block.

try{
//some statements
}
catch{
//statements when exception is caught
}
finally{
//statements executed whether exception occurs or not
}

Does the order of placing catch statements matter in the catch block?

Yes, it does. The FileNoFoundException is inherited from the IOException. So FileNoFoundException is caught before IOException. Exception’s subclasses have to be caught first before the General Exception

What are Checked and Unchecked Exceptions?

A checked exception is some subclass of Exception (or Exception itself), excluding class RuntimeException and its subclasses. Making an exception checked forces client programmers to deal with the exception may be thrown. Checked exceptions must be caught at compile time. Example: IOException.
Unchecked exceptions are RuntimeException and any of its subclasses. Class Error and its subclasses also are unchecked. With an unchecked exception, however, the compiler doesn't force client programmers either to catch the exception or declare it in a throws clause. In fact, client programmers may not even know that the exception could be thrown. Example: ArrayIndexOutOfBoundsException. Errors are often irrecoverable conditions.

What is the base class for Error and Exception?

Throwable

What class of exceptions are generated by the Java run-time system?

The Java runtime system generates Runtime Exceptions and Errors.

What is the difference between throw and throws keywords?

The throw keyword denotes a statement that causes an exception to be initiated. It takes the Exception object to be thrown as an argument. The exception will be caught by an enclosing try-catch block or propagated further up the calling hierarchy. The throws keyword is a modifier of a method that denotes that an exception may be thrown by the method. An exception can be rethrown.

What is the difference between exception and error?

Error's are irrecoverable exceptions. Usually a program terminates when an error is encountered.

What classes of exceptions may be caught by a catch clause?

A catch clause can catch any exception that may be assigned to the Throwable type. This includes the Error and Exception types. Errors are generally irrecoverable conditions

Explain the user defined Exceptions?

User defined Exceptions are custom Exception classes defined by the user for specific purpose. A user defined exception can be created by simply sub-classing an Exception class or a subclass of an Exception class. This allows custom exceptions to be generated (using throw clause) and caught in the same way as normal exceptions.
Example:

class CustomException extends Exception {

}