Question 1

Does how you use debt effect your net worth?

Accepted Answer

Yes, it depends on what you use your cre

Question 2

Insolvency results from taking in more than you consume financially.

Accepted Answer

A) True 
 B)False

Question 3

Having negative net income every once in a while is not such a bad thing as long as you have planned for it.

Accepted Answer

A) True 
 B)False

Question 4

List the benefits a professional financial planner can offer.

Accepted Answer

A financial planner has the knowledge an

Question 5

Below are several people and their current ratios. If they were to lose their jobs today, which one would have more time and more choices until they find their next job?

Accepted Answer

A)  Sally has a current ratio of 0.85 times. 
B)  Leroy has a current ratio of 2.5 times. 
C)  Bob has a current ratio of 1 time. 
D)  There is not enough information to answer this question. 
A)  Sally has a current ratio of 0.85 times. 
B)  Leroy has a current ratio of 2.5 times. 
C)  Bob has a current ratio of 1 time. 
D)  There is not enough information to answer this question.

Question 6

One's ________ is found by dividing total debt or liabilities by total assets.

Accepted Answer

A)  Debt ratio 
B)  Current ratio 
C)  Net worth 
D)  Asset ratio 
E)  none of the above 
A)  Debt ratio 
B)  Current ratio 
C)  Net worth 
D)  Asset ratio 
E)  none of the above

Question 7

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

Accepted Answer

A)  liability ratio 
B)  debt ratio 
C)  long-term debt coverage ratio 
D)  current ratio 
E)  none of the above 
A)  liability ratio 
B)  debt ratio 
C)  long-term debt coverage ratio 
D)  current ratio 
E)  none of the above

Question 8

When measuring your current financial condition it is important to create

Accepted Answer

A)  positive net worth. 
B)  a personal balance sheet. 
C)  an income statement. 
D)  positive net income. 
E)  both B and C are required. 
A)  positive net worth. 
B)  a personal balance sheet. 
C)  an income statement. 
D)  positive net income. 
E)  both B and C are required.

Question 9

Tell how to implement the "envelope" budgeting system.

Accepted Answer

For those new to budgeting or those with

Question 10

Hector and Maria Montez are trying to figure out their current financial health. They have listed the following items from their most recent statements. They will pay off their car loan in three years. Their gross household income is $3,800 per month. They receive $75 month in interest income from their investments.
Savings account: $1,200
Checking account: $800
Credit card balance: $1,000
Car loan balance: $12,000
Car market value: $8,000
Furniture; market value: $2,000
Stocks and bonds: $10,000
-What is their debt ratio?

Accepted Answer

A)  169 percent 
B)  1.69 times 
C)  0.59 percent 
D)  0.59 times 
E)  2 times 
A)  169 percent 
B)  1.69 times 
C)  0.59 percent 
D)  0.59 times 
E)  2 times

Question 11

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step?

Accepted Answer

A)  Separate your personal finances from the business finances. 
B)  Include your personal finances with the business finances to save time. 
C)  Rent a separate office for your business activities. 
D)  Purchase a software program to handle both your business and personal finance at the same time. 
A)  Separate your personal finances from the business finances. 
B)  Include your personal finances with the business finances to save time. 
C)  Rent a separate office for your business activities. 
D)  Purchase a software program to handle both your business and personal finance at the same time.

Question 12

An expenditure that you can control over time and that you can manage is a(n)

Accepted Answer

A)  variable expenditure. 
B)  fixed expenditure. 
C)  constant expenditure. 
D)  short-term expenditure. 
E)  adjustable expenditure. 
A)  variable expenditure. 
B)  fixed expenditure. 
C)  constant expenditure. 
D)  short-term expenditure. 
E)  adjustable expenditure.

Question 13

If your liabilities are greater than the value of your assets you are considered

Accepted Answer

A)  unstable. 
B)  bankrupt. 
C)  insolvent. 
D)  unbalanced. 
A)  unstable. 
B)  bankrupt. 
C)  insolvent. 
D)  unbalanced.

Question 14

The experts say that, stereotypically, a fee only financial planner is a better option than one who earns commissions on what they sell you. Why is this sometimes true?

Accepted Answer

Because of the Agency relationship and s

Question 15

To determine your level of net worth, subtract your liabilities from your positive net equity.

Accepted Answer

A) True 
 B)False

Question 16

When including an asset like a car on your balance sheet

Accepted Answer

A)  list its value as given in a blue book or site like www.edmunds.com. 
B)  list the original purchase price of the vehicle. 
C)  list the amount it would cost to purchase a new model of this vehicle. 
D)  none of the above 
A)  list its value as given in a blue book or site like www.edmunds.com. 
B)  list the original purchase price of the vehicle. 
C)  list the amount it would cost to purchase a new model of this vehicle. 
D)  none of the above

Question 17

Suppose that you wanted to calculate a financial ratio to measure your liquidity. You would most likely use the ________ ratio.

Accepted Answer

A)  debt 
B)  long-term debt coverage 
C)  savings 
D)  current 
E)  none of the above 
A)  debt 
B)  long-term debt coverage 
C)  savings 
D)  current 
E)  none of the above

Question 18

Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios?

Accepted Answer

A)  current ratio 
B)  debt ratio 
C)  savings ratio 
D)  total asset turnover 
E)  none of the above 
A)  current ratio 
B)  debt ratio 
C)  savings ratio 
D)  total asset turnover 
E)  none of the above

Question 19

The current ratio is a measure of liquidity. What information does it tell you?

Accepted Answer

A)  It tells you how many current assets you own free and clear. 
B)  It tells you how much your debt payments for the current period are. 
C)  It tells you how many times you can pay off your current liabilities by using your liquid assets. 
D)  It tells you what portion of your total liabilities are current liabilities. 
A)  It tells you how many current assets you own free and clear. 
B)  It tells you how much your debt payments for the current period are. 
C)  It tells you how many times you can pay off your current liabilities by using your liquid assets. 
D)  It tells you what portion of your total liabilities are current liabilities.

Question 20

Practical uses of an income statement include

Accepted Answer

A)  determining whether you are earning more than you spend. 
B)  spotting problem areas of overspending. 
C)  determining if money is available for saving or investment. 
D)  knowing where your money is going. 
E)  all of the above 
A)  determining whether you are earning more than you spend. 
B)  spotting problem areas of overspending. 
C)  determining if money is available for saving or investment. 
D)  knowing where your money is going. 
E)  all of the above

Does how you use debt effect your net worth?

Insolvency results from taking in more than you consume financially.

Having negative net income every once in a while is not such a bad thing as long as you have planned for it.

List the benefits a professional financial planner can offer.

Below are several people and their current ratios. If they were to lose their jobs today, which one would have more time and more choices until they find their next job?

One's ________ is found by dividing total debt or liabilities by total assets.

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

When measuring your current financial condition it is important to create

Tell how to implement the "envelope" budgeting system.

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step?

An expenditure that you can control over time and that you can manage is a(n)

If your liabilities are greater than the value of your assets you are considered

The experts say that, stereotypically, a fee only financial planner is a better option than one who earns commissions on what they sell you. Why is this sometimes true?

To determine your level of net worth, subtract your liabilities from your positive net equity.

When including an asset like a car on your balance sheet

Suppose that you wanted to calculate a financial ratio to measure your liquidity. You would most likely use the ________ ratio.

Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios?

The current ratio is a measure of liquidity. What information does it tell you?

Practical uses of an income statement include

The Financial Planning Process

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 2: Measuring Your Financial Health and Making a Plan

Does how you use debt effect your net worth?

Insolvency results from taking in more than you consume financially.

Having negative net income every once in a while is not such a bad thing as long as you have planned for it.

List the benefits a professional financial planner can offer.

Below are several people and their current ratios. If they were to lose their jobs today, which one would have more time and more choices until they find their next job?

One's ________ is found by dividing total debt or liabilities by total assets.

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

When measuring your current financial condition it is important to create

Tell how to implement the "envelope" budgeting system.

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step?

An expenditure that you can control over time and that you can manage is a(n)

If your liabilities are greater than the value of your assets you are considered

The experts say that, stereotypically, a fee only financial planner is a better option than one who earns commissions on what they sell you. Why is this sometimes true?

To determine your level of net worth, subtract your liabilities from your positive net equity.

When including an asset like a car on your balance sheet

Suppose that you wanted to calculate a financial ratio to measure your liquidity. You would most likely use the ________ ratio.

Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios?

The current ratio is a measure of liquidity. What information does it tell you?

Practical uses of an income statement include

The Financial Planning Process

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