Question 1

List three components of your personal balance sheet and two components of your income statement.

Accepted Answer

The balance sheet includes ass

Question 2

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

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 3

Use the following items to answer the matching questions below:

-net cash flows

Accepted Answer

The answer of Use the following items to answer the...

Question 4

If you do not budget for unexpected expenses in a given month, you will likely experience a(n)

Accepted Answer

A)  cash shortage. 
B)  cash surplus. 
C)  increase in assets. 
D)  decrease in liabilities. 
A)  cash shortage. 
B)  cash surplus. 
C)  increase in assets. 
D)  decrease in liabilities.

Question 5

The cash in your wallet, your checking account balance, and your savings account comprise your ________ assets.

Accepted Answer

The answer of The cash in your wallet, your checking...

Question 6

Which of the following is not a cash inflow?

Accepted Answer

A)  Interest received 
B)  Dividend income 
C)  Car payment 
D)  Salary 
A)  Interest received 
B)  Dividend income 
C)  Car payment 
D)  Salary

Question 7

Allison anticipates an additional car expense two months from now of $400 for new tires that she has not previously budgeted for. What action should Allison take?

Accepted Answer

A)  Nothing; wait another month to consider the expense since she doesn't need the tires for another two months. 
B)  Plan to use her credit card to purchase the tires. Then she won't have to use her excess cash. 
C)  Revise her car expenses over the next two months to allow for the additional cost of the new tires. 
D)  Ask her parents for the money for the new tires. 
A)  Nothing; wait another month to consider the expense since she doesn't need the tires for another two months. 
B)  Plan to use her credit card to purchase the tires. Then she won't have to use her excess cash. 
C)  Revise her car expenses over the next two months to allow for the additional cost of the new tires. 
D)  Ask her parents for the money for the new tires.

Question 8

Jim has $1,000 of salary and $100 of dividend income this month. This month he also has rent and utilities of $300 and he spent $200 on groceries and $100 on clothing. What is Jim's net cash flow this month?

Accepted Answer

A)  $400 
B)  $600 
C)  $500 
D)  $1,100 
A)  $400 
B)  $600 
C)  $500 
D)  $1,100

Question 9

The primary goal of financial planning is to

Accepted Answer

A)  increase earnings. 
B)  maximize cash inflows. 
C)  maximize wealth. 
D)  minimize financial risk. 
A)  increase earnings. 
B)  maximize cash inflows. 
C)  maximize wealth. 
D)  minimize financial risk.

Question 10

Which of the following is not an appropriate approach to solving the problem of an annual budget deficiency?

Accepted Answer

A)  Liquidate enough savings or investments to make up the deficiency 
B)  Increase short-term, flexible expenditure items 
C)  Renegotiate terms for long-term expense items 
D)  Increase income by getting an additional part-time job 
A)  Liquidate enough savings or investments to make up the deficiency 
B)  Increase short-term, flexible expenditure items 
C)  Renegotiate terms for long-term expense items 
D)  Increase income by getting an additional part-time job

Question 11

The main source of cash flow for most people is

Accepted Answer

A)  salary and wages. 
B)  dividends. 
C)  interest. 
D)  parents. 
A)  salary and wages. 
B)  dividends. 
C)  interest. 
D)  parents.

Question 12

A person's net worth would increase as a result of

Accepted Answer

A)  reducing amounts owed to others. 
B)  reducing earnings. 
C)  decreasing the value of assets. 
D)  increasing spending on current living expenses. 
A)  reducing amounts owed to others. 
B)  reducing earnings. 
C)  decreasing the value of assets. 
D)  increasing spending on current living expenses.

Question 13

If your net cash inflows exceed your net cash outflows, you can increase your net worth by investing the difference in more ________.

Accepted Answer

The answer of If your net cash inflows exceed your...

Question 14

Careful budgeting and controlled spending lead to self-reliance and a feeling of financial freedom.

Accepted Answer

A) True 
 B)False

Question 15

Forecasting for more than a month at a time is not helpful because you can't plan for unexpected expenses in the future.

Accepted Answer

A) True 
 B)False

Question 16

At which time do cash inflows tend to be the highest?

Accepted Answer

A)  College 
B)  Retirement 
C)  20 years into a career 
D)  First job out of college 
A)  College 
B)  Retirement 
C)  20 years into a career 
D)  First job out of college

Question 17

Getting financial help from family and friends is easy and should be your first option in case of an emergency.

Accepted Answer

A) True 
 B)False

Question 18

Jim has $1,000 income from his job and $200 stock dividend income this month. This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing. What is his cash inflow this month?

Accepted Answer

A)  $1,200 
B)  $400 
C)  $600 
D)  $500 
A)  $1,200 
B)  $400 
C)  $600 
D)  $500

Question 19

If spending exceeds the amount of your income over a period of time, your best option is probably to

Accepted Answer

A)  reduce your spending. 
B)  get a second job. 
C)  increase your work hours. 
D)  All of these 
A)  reduce your spending. 
B)  get a second job. 
C)  increase your work hours. 
D)  All of these

Question 20

Which of the following would increase your liquid assets?

Accepted Answer

A)  Buying a new car 
B)  Making regular deposits to a savings account at your bank 
C)  Buying rental property 
D)  Putting more of your salary into a retirement account 
A)  Buying a new car 
B)  Making regular deposits to a savings account at your bank 
C)  Buying rental property 
D)  Putting more of your salary into a retirement account

Exam 2: Planning With Personal Financial Statements

List three components of your personal balance sheet and two components of your income statement.

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

Use the following items to answer the matching questions below: -net cash flows

If you do not budget for unexpected expenses in a given month, you will likely experience a(n)

The cash in your wallet, your checking account balance, and your savings account comprise your ________ assets.

Which of the following is not a cash inflow?

Allison anticipates an additional car expense two months from now of $400 for new tires that she has not previously budgeted for. What action should Allison take?

Jim has $1,000 of salary and $100 of dividend income this month. This month he also has rent and utilities of $300 and he spent $200 on groceries and $100 on clothing. What is Jim's net cash flow this month?

The primary goal of financial planning is to

Which of the following is not an appropriate approach to solving the problem of an annual budget deficiency?

The main source of cash flow for most people is

A person's net worth would increase as a result of

If your net cash inflows exceed your net cash outflows, you can increase your net worth by investing the difference in more ________.

Careful budgeting and controlled spending lead to self-reliance and a feeling of financial freedom.

Forecasting for more than a month at a time is not helpful because you can't plan for unexpected expenses in the future.

At which time do cash inflows tend to be the highest?

Getting financial help from family and friends is easy and should be your first option in case of an emergency.

Jim has $1,000 income from his job and $200 stock dividend income this month. This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing. What is his cash inflow this month?

If spending exceeds the amount of your income over a period of time, your best option is probably to

Which of the following would increase your liquid assets?

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

Filters