Exam 21: Integrating the Components of a Financial Plan

Louie just got a big raise and wants to begin investing his excess cash flow. If he invests $7,500 per year for the next 30 years, and earns 5% on his investments, how much money will he have when he is nearing retirement?

Use the following two columns of items to answer the matching questions below: -net worth A)planning for insurance, investing, financing, and retirement B)amounts owed that are due in less than one year C)cash, checking account, and money market account D)stocks, bonds and mutual funds E)home, car, furniture F)assets less liabilities

________ insurance provides financial support if you are injured and unable to work.

A term life policy is the least expensive way to

You are 25 years old and saving for an early retirement. Assuming you have a high risk tolerance, which of the following can best help you reach your goal of retiring early?

Financial documents should be

One advantage of financing with a mortgage or using a home equity loan to make improvements on your home is that the interest payments are

If you have enough liquidity, you should either obtain short-term financing or sell assets.

As you prepare your financial plan and revise it from year to year, it would be prudent to plan for how much money it will take to

By investing in stock of ________, ________ firms, you may enhance your liquidity because you will receive dividend income.

It is not possible to have too much insurance coverage.

Careful budgeting lets you spend more to achieve your short-term financial goals.

Key documents for managing investments include all of the following, except

The easiest way to begin investing and building wealth is by

Monitoring financing includes evaluating all of the following balances, except

As a result of the ________, the more you spend the less money you will have for liquidity or investments.

Assume that you set aside $500 per year, and invest that money over the next five years in an account earning 6%. What is the amount of interest you will earn on this investment?

The more you spend, the less money you will have available for liquidity purposes or to make investments or to save for retirement.

To ensure adequate liquidity for a "rainy day fund", you should keep those funds in

Even average people can accumulate wealth by