Question 1

Which of the following steps are considered to be part of the personal financial planning process as outlined in the text?

Accepted Answer

A)  Evaluate your financial health. 
B)  Define your financial goals. 
C)  Develop a plan of action. 
D)  Implement your plan. 
E)  All of the above. 
A)  Evaluate your financial health. 
B)  Define your financial goals. 
C)  Develop a plan of action. 
D)  Implement your plan. 
E)  All of the above. E

Question 2

A financial plan is only concerned with your future earnings and expenses. An examination of your current financial situation is not so important.

Accepted Answer

A) True 
 B)False  False

Question 3

Jacob has written down his short-term goals for the next year on his goals worksheet. So far he has priortized his goals, and he has determined a feasable due date by which he wants to have achieved his goals; according to the textbook, the final step Jacob needs to complete in his goals process is to ________

Accepted Answer

A)  determine an appropriate cost for each of his listed goals. 
B)  post his goals worksheet on his refrigerator so he can see it every day. 
C)  contact his financial advisor for approval of his goals. 
D)  email himself a copy of the goals worksheet in case he loses the paper copy of the worksheet. 
A)  determine an appropriate cost for each of his listed goals. 
B)  post his goals worksheet on his refrigerator so he can see it every day. 
C)  contact his financial advisor for approval of his goals. 
D)  email himself a copy of the goals worksheet in case he loses the paper copy of the worksheet. A

Question 4

In 2008, the Bear Stearns Company collapsed could not be saved and was sold to JP Morgan Chase for $10 per share, a price far below its pre-crisis 52-week high of $133.20 per share. Prior to the collapse, many of the company's employees had all of their retirement money invested only in Bear Stearns common stock. This was a very risky financial strategy for just such a reason: What if the company dissolves? What financial principle from Chapter One did they need to understand better?

Accepted Answer

A)  Risk and return go hand in hand 
B)  Nothing happens without a plan 
C)  The time value of money 
D)  Just do it 
A)  Risk and return go hand in hand 
B)  Nothing happens without a plan 
C)  The time value of money 
D)  Just do it

Question 5

Factors that impact the returns of all assets in the market such as the national unemployment rate or inflation rate are a type of risk that can be eliminated through diversification.

Accepted Answer

A) True 
 B)False

Question 6

Which one of the following is not one of the five basic steps in personal financial planning?

Accepted Answer

A)  Evaluate your financial health. 
B)  Define your financial goals. 
C)  Develop a plan of action. 
D)  Let an accountant review your plan. 
E)  Implement your plan. 
A)  Evaluate your financial health. 
B)  Define your financial goals. 
C)  Develop a plan of action. 
D)  Let an accountant review your plan. 
E)  Implement your plan.

Question 7

Being financially secure involves balancing what you earn with

Accepted Answer

A)  your investments. 
B)  what you spend. 
C)  your retirement plans. 
D)  your current level of debt. 
A)  your investments. 
B)  what you spend. 
C)  your retirement plans. 
D)  your current level of debt.

Question 8

The economic downturn that began in 2008 had which negative consequences?

Accepted Answer

A)  There was a dramatic increase in unemployment rates. 
B)  Financial markets were disrupted. 
C)  Consumers found it difficult to borrow money from lending institutions. 
D)  All consumers increased their wealth. 
E)  Only A, B and C are correct. 
A)  There was a dramatic increase in unemployment rates. 
B)  Financial markets were disrupted. 
C)  Consumers found it difficult to borrow money from lending institutions. 
D)  All consumers increased their wealth. 
E)  Only A, B and C are correct.

Question 9

Chapter 1 discusses ten principles that form the foundation of personal finance. The principle that considers the value of compound interest is the ________ principle.

Accepted Answer

A)  all risk is not equal 
B)  pay yourself first 
C)  competitive inflation adjustment 
D)  time value of money 
E)  none of the above 
A)  all risk is not equal 
B)  pay yourself first 
C)  competitive inflation adjustment 
D)  time value of money 
E)  none of the above

Question 10

A solid understanding of personal finance will

Accepted Answer

A)  enable you to protect yourself from an incompetent investment advisor. 
B)  allow you to take advantage of changes in the economy. 
C)  give you the ability to make intelligent investments. 
D)  help you understand the importance of planning for your financial future. 
E)  all of the above 
A)  enable you to protect yourself from an incompetent investment advisor. 
B)  allow you to take advantage of changes in the economy. 
C)  give you the ability to make intelligent investments. 
D)  help you understand the importance of planning for your financial future. 
E)  all of the above

Question 11

This course/text will assist you in accomplishing six financial objectives. What are they?

Accepted Answer

1.Manage the unplanned.
2.Accu

Question 12

Today, most Americans over the age of 65 have adequate savings and income available to them during retirement.

Accepted Answer

A) True 
 B)False

Question 13

The concept that emphasizes that people should not put all their eggs in one basket is

Accepted Answer

A)  the time dimension of investing. 
B)  the curse of competitive investment markets. 
C)  diversification reduces risk . 
D)  the farmers analogy. 
E)  liquidity is first. 
A)  the time dimension of investing. 
B)  the curse of competitive investment markets. 
C)  diversification reduces risk . 
D)  the farmers analogy. 
E)  liquidity is first.

Question 14

After retirement starts, which aspect of financial planning becomes paramount?

Accepted Answer

A)  maintaining a regular pattern of saving 
B)  long-term borrowing commitments 
C)  estate planning 
D)  effects of inflation 
A)  maintaining a regular pattern of saving 
B)  long-term borrowing commitments 
C)  estate planning 
D)  effects of inflation

Question 15

A well-educated and trained employee is virtually guaranteed job security in today's corporations. Therefore he or she doesn't need to worry about keeping his or her skills updated and current.

Accepted Answer

A) True 
 B)False

Question 16

Once a sound financial plan is in place, there should be no need to ever change it.

Accepted Answer

A) True 
 B)False

Question 17

If liquid funds are not available, an unexpected need, such as a job loss or injury may force you to

Accepted Answer

A)  cash in a longer-term investment. 
B)  borrow money fast. 
C)  take on unexpected debt repayments. 
D)  all of the above. 
A)  cash in a longer-term investment. 
B)  borrow money fast. 
C)  take on unexpected debt repayments. 
D)  all of the above.

Question 18

When comparing two different investment opportunities the investor should always choose the investment that minimizes the total amount of taxes paid.

Accepted Answer

A) True 
 B)False

Question 19

What are common factors found in an effective financial plan?

Accepted Answer

A)  Effective financial plans should be flexible to allow for changes in your situation 
B)  Effective financial plans should provide sufficient liquidity to meet unexpected needs 
C)  Effective financial plans should provide insurance protection from catastrophic events 
D)  Effective financial plans should help you minimize paying taxes 
E)  All of the above are necessary in an effective financial plan 
A)  Effective financial plans should be flexible to allow for changes in your situation 
B)  Effective financial plans should provide sufficient liquidity to meet unexpected needs 
C)  Effective financial plans should provide insurance protection from catastrophic events 
D)  Effective financial plans should help you minimize paying taxes 
E)  All of the above are necessary in an effective financial plan

Question 20

In Chapter One, Principle Three deals with the time value of money. Why is this principle so important to financial planning?

Accepted Answer

A)  It allows us to determine how much money we will need to achieve our future goals. 
B)  It shows us the impact of inflation on our money over time. 
C)  It helps us determine our savings needs today in order to meet our retirement goals. 
D)  It shows us how important time and interest rates are in accumulating wealth. 
E)  all of the above are important in financial planning. 
A)  It allows us to determine how much money we will need to achieve our future goals. 
B)  It shows us the impact of inflation on our money over time. 
C)  It helps us determine our savings needs today in order to meet our retirement goals. 
D)  It shows us how important time and interest rates are in accumulating wealth. 
E)  all of the above are important in financial planning.

Which of the following steps are considered to be part of the personal financial planning process as outlined in the text?

A financial plan is only concerned with your future earnings and expenses. An examination of your current financial situation is not so important.

Factors that impact the returns of all assets in the market such as the national unemployment rate or inflation rate are a type of risk that can be eliminated through diversification.

Which one of the following is not one of the five basic steps in personal financial planning?

Being financially secure involves balancing what you earn with

The economic downturn that began in 2008 had which negative consequences?

Chapter 1 discusses ten principles that form the foundation of personal finance. The principle that considers the value of compound interest is the ________ principle.

A solid understanding of personal finance will

This course/text will assist you in accomplishing six financial objectives. What are they?

Today, most Americans over the age of 65 have adequate savings and income available to them during retirement.

The concept that emphasizes that people should not put all their eggs in one basket is

After retirement starts, which aspect of financial planning becomes paramount?

A well-educated and trained employee is virtually guaranteed job security in today's corporations. Therefore he or she doesn't need to worry about keeping his or her skills updated and current.

Once a sound financial plan is in place, there should be no need to ever change it.

If liquid funds are not available, an unexpected need, such as a job loss or injury may force you to

When comparing two different investment opportunities the investor should always choose the investment that minimizes the total amount of taxes paid.

What are common factors found in an effective financial plan?

In Chapter One, Principle Three deals with the time value of money. Why is this principle so important to financial planning?

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 1: The Financial Planning Process

Which of the following steps are considered to be part of the personal financial planning process as outlined in the text?

A financial plan is only concerned with your future earnings and expenses. An examination of your current financial situation is not so important.

Factors that impact the returns of all assets in the market such as the national unemployment rate or inflation rate are a type of risk that can be eliminated through diversification.

Which one of the following is not one of the five basic steps in personal financial planning?

Being financially secure involves balancing what you earn with

The economic downturn that began in 2008 had which negative consequences?

Chapter 1 discusses ten principles that form the foundation of personal finance. The principle that considers the value of compound interest is the ________ principle.

A solid understanding of personal finance will

This course/text will assist you in accomplishing six financial objectives. What are they?

Today, most Americans over the age of 65 have adequate savings and income available to them during retirement.

The concept that emphasizes that people should not put all their eggs in one basket is

After retirement starts, which aspect of financial planning becomes paramount?

A well-educated and trained employee is virtually guaranteed job security in today's corporations. Therefore he or she doesn't need to worry about keeping his or her skills updated and current.

Once a sound financial plan is in place, there should be no need to ever change it.

If liquid funds are not available, an unexpected need, such as a job loss or injury may force you to

When comparing two different investment opportunities the investor should always choose the investment that minimizes the total amount of taxes paid.

What are common factors found in an effective financial plan?

In Chapter One, Principle Three deals with the time value of money. Why is this principle so important to financial planning?

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters