Question 1

Income of $2760 monthly with expenditures of $2880 monthly will result in a negative cash flow of $120.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is the worst approach to solving the problem of an annual budget deficit?

Accepted Answer

A) Liquidate enough savings or investments to make up the deficit. 
B) Get an additional credit card and cover the deficit with that. 
C) Renegotiate debt to longer term,lower interest options. 
D) Increase income by getting an additional part-time job. 
A) Liquidate enough savings or investments to make up the deficit. 
B) Get an additional credit card and cover the deficit with that. 
C) Renegotiate debt to longer term,lower interest options. 
D) Increase income by getting an additional part-time job. B

Question 3

A budget is

Accepted Answer

A) the same thing as a cash flow statement. 
B) a method to measure net worth and monitor wealth. 
C) an historical record of income and expenses. 
D) a forecast of all items on the cash flow statement. 
A) the same thing as a cash flow statement. 
B) a method to measure net worth and monitor wealth. 
C) an historical record of income and expenses. 
D) a forecast of all items on the cash flow statement. D

Question 4

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

Accepted Answer

A) True 
 B)False

Question 5

If you do not budget for unexpected expenses,you will likely experience

Accepted Answer

A) cash shortages. 
B) an increase in your emergency fund. 
C) an increase in assets. 
D) chronic stress-related issues. 
A) cash shortages. 
B) an increase in your emergency fund. 
C) an increase in assets. 
D) chronic stress-related issues.

Question 6

Jennifer has assets of $100 000 and debts of $10 000.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) establish an emergency fund of $10 000 in order to qualify for a loan. 
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) establish an emergency fund of $10 000 in order to qualify for a loan.

Question 7

What is a practical way to make sure you stay within your budget and achieve your savings goals?

Accepted Answer

A) Use the pay yourself first method. 
B) Use a credit card for all expenses. 
C) Reduce your spending. 
D) Get a second job. 
A) Use the pay yourself first method. 
B) Use a credit card for all expenses. 
C) Reduce your spending. 
D) Get a second job.

Question 8

If your debt-to-asset ratio is 1,which of the following will improve it?

Accepted Answer

A) Taking out a line of credit 
B) Buying a car with cash 
C) Paying off a student loan 
D) Buying stock with cash 
A) Taking out a line of credit 
B) Buying a car with cash 
C) Paying off a student loan 
D) Buying stock with cash

Question 9

Describe why some people may need alternative budget strategies? Give an example to illustrate why someone might need the envelope method while someone else needs the pay yourself first method.

Accepted Answer

If someone has good intentions but is st

Question 10

George has a very low debt to asset ratio because he has paid off his mortgage on his house and has very little other debt.Recently,he quit his high-stress job and has taken a much more enjoyable lower-paying position.Consequently,he also now has a low liquidity ratio.He used up all of his emergency fund while looking for the new job and he is having difficulty continuing to save for his retirement.Comment on his situation and make suggestions to help him with his retirement budgeting.

Accepted Answer

George is asset rich but cash flow poor

Question 11

The current financial position of an individual or family is best presented with the use of a

Accepted Answer

A) net worth statement. 
B) cash flow statement. 
C) balance sheet. 
D) bank statement. 
A) net worth statement. 
B) cash flow statement. 
C) balance sheet. 
D) bank statement.

Question 12

A cash flow statement is

Accepted Answer

A) an accurate recording of recent actual expenses and incomes. 
B) a forecast of cash inflows and outflows. 
C) only concerned with regular sources of income and expenses. 
D) a record of surplus or deficit each month. 
A) an accurate recording of recent actual expenses and incomes. 
B) a forecast of cash inflows and outflows. 
C) only concerned with regular sources of income and expenses. 
D) a record of surplus or deficit each month.

Question 13

If you sell stock from your portfolio to pay off your car loan,your debt ratio of 0.5 will

Accepted Answer

A) improve (increase). 
B) improve (decrease). 
C) remain unchanged. 
D) decrease (unfavourably). 
A) improve (increase). 
B) improve (decrease). 
C) remain unchanged. 
D) decrease (unfavourably).

Question 14

A major part of the budgeting process to ensure success is

Accepted Answer

A) reducing credit limits on credit cards. 
B) limiting entertainment expenses. 
C) establishing an emergency fund. 
D) planning an overdraft for your chequing account. 
A) reducing credit limits on credit cards. 
B) limiting entertainment expenses. 
C) establishing an emergency fund. 
D) planning an overdraft for your chequing account.

Question 15

If both a husband and a wife are employed full time,their consumption behaviour

Accepted Answer

A) is usually higher. 
B) tends to decrease. 
C) will decrease as they age. 
D) is similar to all mid earning life stage people. 
A) is usually higher. 
B) tends to decrease. 
C) will decrease as they age. 
D) is similar to all mid earning life stage people.

Question 16

Salary or wages are the main source of income for most working people.

Accepted Answer

A) True 
 B)False

Question 17

Raymond has a $5000 bank loan due in nine months,$3000 in credit card liabilities due in 1.5 months,and another $4000 loan due in 1.5 years.In this case,Raymond has total long-term liabilities of $4000.

Accepted Answer

A) True 
 B)False

Question 18

A high debt-to-asset ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Accepted Answer

A) True 
 B)False

Question 19

Household assets include jewelry and furniture and should be valued at the cost to replace them.

Accepted Answer

A) True 
 B)False

Question 20

To save money,excess cash flow will be required.What is excess cash flow?

Accepted Answer

A) Funds remaining after all debts are paid off 
B) Net salary after expenses 
C) Net profit from the sale of an investment 
D) Surplus cash after all expenses are paid 
A) Funds remaining after all debts are paid off 
B) Net salary after expenses 
C) Net profit from the sale of an investment 
D) Surplus cash after all expenses are paid

Income of $2760 monthly with expenditures of $2880 monthly will result in a negative cash flow of $120.

Which of the following is the worst approach to solving the problem of an annual budget deficit?

A budget is

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

If you do not budget for unexpected expenses,you will likely experience

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

What is a practical way to make sure you stay within your budget and achieve your savings goals?

If your debt-to-asset ratio is 1,which of the following will improve it?

Describe why some people may need alternative budget strategies? Give an example to illustrate why someone might need the envelope method while someone else needs the pay yourself first method.

The current financial position of an individual or family is best presented with the use of a

A cash flow statement is

If you sell stock from your portfolio to pay off your car loan,your debt ratio of 0.5 will

A major part of the budgeting process to ensure success is

If both a husband and a wife are employed full time,their consumption behaviour

Salary or wages are the main source of income for most working people.

Raymond has a $5000 bank loan due in nine months,$3000 in credit card liabilities due in 1.5 months,and another $4000 loan due in 1.5 years.In this case,Raymond has total long-term liabilities of $4000.

A high debt-to-asset ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Household assets include jewelry and furniture and should be valued at the cost to replace them.

To save money,excess cash flow will be required.What is excess cash flow?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 3: Tools for Financial Planning - Planning with Personal Financial Statements

Income of $2760 monthly with expenditures of $2880 monthly will result in a negative cash flow of $120.

Which of the following is the worst approach to solving the problem of an annual budget deficit?

A budget is

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

If you do not budget for unexpected expenses,you will likely experience

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

What is a practical way to make sure you stay within your budget and achieve your savings goals?

If your debt-to-asset ratio is 1,which of the following will improve it?

Describe why some people may need alternative budget strategies? Give an example to illustrate why someone might need the envelope method while someone else needs the pay yourself first method.

The current financial position of an individual or family is best presented with the use of a

A cash flow statement is

If you sell stock from your portfolio to pay off your car loan,your debt ratio of 0.5 will

A major part of the budgeting process to ensure success is

If both a husband and a wife are employed full time,their consumption behaviour

Salary or wages are the main source of income for most working people.

Raymond has a $5000 bank loan due in nine months,$3000 in credit card liabilities due in 1.5 months,and another $4000 loan due in 1.5 years.In this case,Raymond has total long-term liabilities of $4000.

A high debt-to-asset ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Household assets include jewelry and furniture and should be valued at the cost to replace them.

To save money,excess cash flow will be required.What is excess cash flow?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters