Exam 1: Understanding the Financial Planning Process

How long you invest is not nearly as important as the rate of interest you can earn on your investments.

Mutual funds are examples of financial assets.

Financial planning is a dynamic process.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The average American's [home equity | home mortgage] is higher.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Two key indicators of economic activity in the U.S.are production levels and [employment levels | cost of living].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -[GDP | CPI] is the total of all goods and services produced by workers located within the country.

Spending for your child's private-school education is an example of deferred consumption.

A personal computer could not be used to

Saving $3,000 for a large,flat-screen TV within the next 3 years is an example of a short-term goal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Men generally earn [more | less] than women in a given field of employment.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -[Utility | Propensity to consume] refers to the satisfaction you receive from buying certain items.

____ tends to increase and then decrease over the life cycle.

Your personal value system will shape your attitude toward money and wealth accumulation.

Utility refers to

Financial planning can improve your standard of living.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Your level of formal education is a [controllable | non controllable] factor that has a considerable effect on your income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Most families find it [easy | difficult] to discuss money matters.