Question 1

A(n) ________ is a forecast of your future cash inflows and outflows.

Accepted Answer

The answer of A(n) ________ is a forecast of your...

Question 2

Some people with large incomes spend their entire paychecks within a few days, while others with small incomes may be big savers.

Accepted Answer

A) True 
 B)False

Question 3

The difference between assets and liabilities is called

Accepted Answer

A)  surplus. 
B)  deficit. 
C)  net income. 
D)  net worth. 
A)  surplus. 
B)  deficit. 
C)  net income. 
D)  net worth.

Question 4

Jennifer has assets of $100,000 and $10,000 of debt. She could

Accepted Answer

A)  borrow more money, since her debt ratio is low. 
B)  apply for a bank loan, but expect to be turned down. 
C)  borrow approximately $200,000 at below market rates. 
D)  not borrow more money until she pays off her current debt. 
A)  borrow more money, since her debt ratio is low. 
B)  apply for a bank loan, but expect to be turned down. 
C)  borrow approximately $200,000 at below market rates. 
D)  not borrow more money until she pays off her current debt.

Question 5

A family with $45,000 in assets and $22,000 in liabilities would have a net worth of

Accepted Answer

A)  $45,000. 
B)  $23,000. 
C)  $22,000. 
D)  $67,000. 
A)  $45,000. 
B)  $23,000. 
C)  $22,000. 
D)  $67,000.

Question 6

A personal balance sheet presents

Accepted Answer

A)  amounts budgeted for spending. 
B)  income and expenses for a period of time. 
C)  earnings on savings and investments. 
D)  items owned and amounts owed. 
A)  amounts budgeted for spending. 
B)  income and expenses for a period of time. 
C)  earnings on savings and investments. 
D)  items owned and amounts owed.

Question 7

Net cash flows are the difference between cash inflows and cash outflows and can be either positive or negative.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not considered an asset for a family?

Accepted Answer

A)  Cash in a checking account 
B)  A mortgaged home 
C)  A leased car 
D)  Furniture 
A)  Cash in a checking account 
B)  A mortgaged home 
C)  A leased car 
D)  Furniture

Question 9

For most people, the first step in finding where their money goes each month is to correctly assess their true net income.

Accepted Answer

A) True 
 B)False

Question 10

Use the following two columns of items to answer the matching questions below:
-mutual funds

Accepted Answer

A) financial instruments representing partial ownership of a firm 
B) financial instruments issued by borrowers to raise funds 
C) investment companies that sell shares to individuals and invest the proceeds in stocks and bonds 
D) debt that will be paid within a year 
E) financial assets that can be easily sold without a loss
F)rental property and land 
A) financial instruments representing partial ownership of a firm 
B) financial instruments issued by borrowers to raise funds 
C) investment companies that sell shares to individuals and invest the proceeds in stocks and bonds 
D) debt that will be paid within a year 
E) financial assets that can be easily sold without a loss
F)rental property and land

Question 11

The personal cash flow statement measures

Accepted Answer

A)  cash inflows. 
B)  cash outflows. 
C)  cash inflows and outflows. 
D)  All of these are part of the cash flow statement. 
A)  cash inflows. 
B)  cash outflows. 
C)  cash inflows and outflows. 
D)  All of these are part of the cash flow statement.

Question 12

Which of the following usually affects cash flow the most?

Accepted Answer

A)  The size of your family 
B)  Your job skills 
C)  Your personal consumption behavior 
D)  All of these 
A)  The size of your family 
B)  Your job skills 
C)  Your personal consumption behavior 
D)  All of these

Question 13

Use the following items to answer the matching questions below:

-cash flow statement

Accepted Answer

A)  a financial statement that measures cash inflows and outflows 
B)  items owned by a household such as a home or car 
C)  a summary of assets, liabilities and net worth 
D)  the difference between cash inflows and outflows 
A)  a financial statement that measures cash inflows and outflows 
B)  items owned by a household such as a home or car 
C)  a summary of assets, liabilities and net worth 
D)  the difference between cash inflows and outflows

Question 14

Salary or wages are the only cash inflows for working people.

Accepted Answer

A) True 
 B)False

Question 15

Long-term liabilities include all of the following, except

Accepted Answer

A)  the monthly payment due on a credit card. 
B)  the mortgage on a home. 
C)  a three-year auto loan. 
D)  a student loan. 
A)  the monthly payment due on a credit card. 
B)  the mortgage on a home. 
C)  a three-year auto loan. 
D)  a student loan.

Question 16

Cash inflows can include

Accepted Answer

A)  dividends. 
B)  interest income. 
C)  income. 
D)  All of these are cash inflows. 
A)  dividends. 
B)  interest income. 
C)  income. 
D)  All of these are cash inflows.

Question 17

A personal cash flow statement is usually the starting point for an individual's or family's budget.

Accepted Answer

A) True 
 B)False

Question 18

The net worth of an individual or family can be increased by

Accepted Answer

A)  increasing spending. 
B)  increasing liabilities. 
C)  decreasing assets. 
D)  increasing income without increasing spending. 
A)  increasing spending. 
B)  increasing liabilities. 
C)  decreasing assets. 
D)  increasing income without increasing spending.

Question 19

Corporations issue stocks for all of the following reasons, except

Accepted Answer

A)  to purchase new machinery. 
B)  to expand into new markets. 
C)  to fund a plant expansion. 
D)  to loan money to shareholders. 
A)  to purchase new machinery. 
B)  to expand into new markets. 
C)  to fund a plant expansion. 
D)  to loan money to shareholders.

Question 20

Liabilities can be calculated by

Accepted Answer

A)  adding assets to net worth. 
B)  subtracting net worth from assets. 
C)  adding assets to income. 
D)  subtracting expenses from assets. 
A)  adding assets to net worth. 
B)  subtracting net worth from assets. 
C)  adding assets to income. 
D)  subtracting expenses from assets.

Exam 2: Planning With Personal Financial Statements

A(n) ________ is a forecast of your future cash inflows and outflows.

Some people with large incomes spend their entire paychecks within a few days, while others with small incomes may be big savers.

The difference between assets and liabilities is called

Jennifer has assets of $100,000 and $10,000 of debt. She could

A family with $45,000 in assets and $22,000 in liabilities would have a net worth of

A personal balance sheet presents

Net cash flows are the difference between cash inflows and cash outflows and can be either positive or negative.

Which of the following is not considered an asset for a family?

For most people, the first step in finding where their money goes each month is to correctly assess their true net income.

Use the following two columns of items to answer the matching questions below: -mutual funds

The personal cash flow statement measures

Which of the following usually affects cash flow the most?

Use the following items to answer the matching questions below: -cash flow statement

Salary or wages are the only cash inflows for working people.

Long-term liabilities include all of the following, except

Cash inflows can include

A personal cash flow statement is usually the starting point for an individual's or family's budget.

The net worth of an individual or family can be increased by

Corporations issue stocks for all of the following reasons, except

Liabilities can be calculated by

Overview of a Financial Plan

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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