Question 1

Student loans,car loans,and mortgages are good examples of

Accepted Answer

A) long-term liabilities. 
B) current liabilities. 
C) short-term debts. 
D) household liabilities. 
A) long-term liabilities. 
B) current liabilities. 
C) short-term debts. 
D) household liabilities.

Question 2

If your net worth is not improving over time,you can use your budget to

Accepted Answer

A) make yourself take a more disciplined approach. 
B) add part-time income you had not previously included in your budget. 
C) identify the components in the budget you can change. 
D) improve your rate of return on investments by raising the risk level. 
A) make yourself take a more disciplined approach. 
B) add part-time income you had not previously included in your budget. 
C) identify the components in the budget you can change. 
D) improve your rate of return on investments by raising the risk level.

Question 3

Which of the following would increase your net worth (all else the same)?

Accepted Answer

A) Paying down your mortgage with excess cash flow 
B) Getting a salary increase 
C) Selling your condo 
D) Buying a recreational property 
A) Paying down your mortgage with excess cash flow 
B) Getting a salary increase 
C) Selling your condo 
D) Buying a recreational property

Question 4

This month Jill received $1000 income from her job and $200 in stock dividends.Her expenses were rent and utilities of $300 and $300 on groceries and $200 on clothing.Which of the following is True?

Accepted Answer

A) Jill has a net cash flow of $400. 
B) Jill has net expenses of $400. 
C) Jill has a net cash flow of $200. 
D) Jill has net income of $400. 
A) Jill has a net cash flow of $400. 
B) Jill has net expenses of $400. 
C) Jill has a net cash flow of $200. 
D) Jill has net income of $400.

Question 5

Assets valued at $400 000 with liabilities of $300 000 means a debt-to-asset ratio of 0.75.

Accepted Answer

A) True 
 B)False

Question 6

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

Accepted Answer

A) True 
 B)False

Question 7

Kim has a net worth of -$20 000 and a debt-to-asset ratio of three.Which of the following do you know is True?

Accepted Answer

A) Kim has a major liquidity problem. 
B) Kim is on the verge of bankruptcy. 
C) Kim has assets of $10 000. 
D) Kim has liabilities of $20 000. 
A) Kim has a major liquidity problem. 
B) Kim is on the verge of bankruptcy. 
C) Kim has assets of $10 000. 
D) Kim has liabilities of $20 000.

Question 8

What tends to be the case for the retirement life stage?

Accepted Answer

A) Lower debt levels than in early-earning and mid-earning life stages 
B) Managing expenses for new hobbies becomes challenging. 
C) Managing RRSP investments becomes paramount. 
D) Increase in taxes due to income on retirement funds 
A) Lower debt levels than in early-earning and mid-earning life stages 
B) Managing expenses for new hobbies becomes challenging. 
C) Managing RRSP investments becomes paramount. 
D) Increase in taxes due to income on retirement funds

Question 9

A low liquidity ratio means that

Accepted Answer

A) you have very few debts. 
B) you will not likely have trouble paying your monthly bills. 
C) you probably will have trouble paying your monthly bills. 
D) you have many liquid assets. 
A) you have very few debts. 
B) you will not likely have trouble paying your monthly bills. 
C) you probably will have trouble paying your monthly bills. 
D) you have many liquid assets.

Question 10

George has total debts of $10 000,liquid assets of $8000 and current liabilities of $5000.His current ratio is

Accepted Answer

A) 0)8. 
B) 0)63. 
C) 6)3. 
D) 1)6. 
A) 0)8. 
B) 0)63. 
C) 6)3. 
D) 1)6.

Question 11

Nancy has a gross income of $47 000,disposable income of $40 000,discretionary income of $4000 and saves $8000 a year.Her savings rate is

Accepted Answer

A) 10 percent. 
B) 15 percent. 
C) 17 percent. 
D) 20 percent. 
A) 10 percent. 
B) 15 percent. 
C) 17 percent. 
D) 20 percent.

Question 12

What error do many individuals make in budgeting?

Accepted Answer

A) Overestimate expenses and underestimate income 
B) Overestimate income and underestimate expenses 
C) Overestimate income and expenses 
D) Underestimate income and expenses 
A) Overestimate expenses and underestimate income 
B) Overestimate income and underestimate expenses 
C) Overestimate income and expenses 
D) Underestimate income and expenses

Question 13

Ahmed has gross income of $28 000,disposable income of $25 000,discretionary income of $2000 and saved $1000 during the period.His savings rate is

Accepted Answer

A) 3)6 percent. 
B) 4 percent. 
C) 7)1 percent. 
D) 350 percent. 
A) 3)6 percent. 
B) 4 percent. 
C) 7)1 percent. 
D) 350 percent.

Question 14

Individuals who switch from a low-demand industry to a high-demand industry may earn higher incomes.

Accepted Answer

A) True 
 B)False

Question 15

A net worth statement can be used to monitor the changes in your wealth over time.

Accepted Answer

A) True 
 B)False

Question 16

Raymond feels that he is wealthy because he has $10 000 cash in the bank,two expensive cars worth about $100 000,and a house worth $1 million.However,he also carries a $25 000 credit card liability and has a $40 000 bank loan due within six months.What financial problem does Raymond have?

Accepted Answer

A) Fixed assets are too high. 
B) Total net worth is too low. 
C) Current ratio is too low. 
D) Liquidity ratio is too low. 
A) Fixed assets are too high. 
B) Total net worth is too low. 
C) Current ratio is too low. 
D) Liquidity ratio is too low.

Question 17

Net worth always increases when you increase the value of your assets.

Accepted Answer

A) True 
 B)False

Question 18

Mary earns $3500 per month.After payroll deductions from the government,Mary takes home 85 percent of her salary.Mary wants to use a pay yourself first method and puts $330 into her savings account before spending anything and $200 towards her student loans.What is Mary's saving rate?

Accepted Answer

A) 9)4 percent 
B) 11.1 percent 
C) 15.1 percent 
D) 17.8 percent 
A) 9)4 percent 
B) 11.1 percent 
C) 15.1 percent 
D) 17.8 percent

Question 19

All of the following affect cash outflows except

Accepted Answer

A) the size of the family. 
B) your age. 
C) your education level. 
D) your personal consumption behaviour. 
A) the size of the family. 
B) your age. 
C) your education level. 
D) your personal consumption behaviour.

Question 20

Over time the balance sheet will show that your budgeting process is successful if

Accepted Answer

A) there is a constant positive cash flow. 
B) you have controlled all spending habits. 
C) your budget is continually accurate. 
D) your net worth increases each year. 
A) there is a constant positive cash flow. 
B) you have controlled all spending habits. 
C) your budget is continually accurate. 
D) your net worth increases each year.

Student loans,car loans,and mortgages are good examples of

If your net worth is not improving over time,you can use your budget to

Which of the following would increase your net worth (all else the same)?

This month Jill received $1000 income from her job and $200 in stock dividends.Her expenses were rent and utilities of $300 and $300 on groceries and $200 on clothing.Which of the following is True?

Assets valued at $400 000 with liabilities of $300 000 means a debt-to-asset ratio of 0.75.

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

Kim has a net worth of -$20 000 and a debt-to-asset ratio of three.Which of the following do you know is True?

What tends to be the case for the retirement life stage?

A low liquidity ratio means that

George has total debts of $10 000,liquid assets of $8000 and current liabilities of $5000.His current ratio is

Nancy has a gross income of $47 000,disposable income of $40 000,discretionary income of $4000 and saves $8000 a year.Her savings rate is

What error do many individuals make in budgeting?

Ahmed has gross income of $28 000,disposable income of $25 000,discretionary income of $2000 and saved $1000 during the period.His savings rate is

Individuals who switch from a low-demand industry to a high-demand industry may earn higher incomes.

A net worth statement can be used to monitor the changes in your wealth over time.

Raymond feels that he is wealthy because he has $10 000 cash in the bank,two expensive cars worth about $100 000,and a house worth $1 million.However,he also carries a $25 000 credit card liability and has a $40 000 bank loan due within six months.What financial problem does Raymond have?

Net worth always increases when you increase the value of your assets.

Mary earns $3500 per month.After payroll deductions from the government,Mary takes home 85 percent of her salary.Mary wants to use a pay yourself first method and puts $330 into her savings account before spending anything and $200 towards her student loans.What is Mary's saving rate?

All of the following affect cash outflows except

Over time the balance sheet will show that your budgeting process is successful if

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

Student loans,car loans,and mortgages are good examples of

If your net worth is not improving over time,you can use your budget to

Which of the following would increase your net worth (all else the same)?

This month Jill received $1000 income from her job and $200 in stock dividends.Her expenses were rent and utilities of $300 and $300 on groceries and $200 on clothing.Which of the following is True?

Assets valued at $400 000 with liabilities of $300 000 means a debt-to-asset ratio of 0.75.

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

Kim has a net worth of -$20 000 and a debt-to-asset ratio of three.Which of the following do you know is True?

What tends to be the case for the retirement life stage?

A low liquidity ratio means that

George has total debts of $10 000,liquid assets of $8000 and current liabilities of $5000.His current ratio is

Nancy has a gross income of $47 000,disposable income of $40 000,discretionary income of $4000 and saves $8000 a year.Her savings rate is

What error do many individuals make in budgeting?

Ahmed has gross income of $28 000,disposable income of $25 000,discretionary income of $2000 and saved $1000 during the period.His savings rate is

Individuals who switch from a low-demand industry to a high-demand industry may earn higher incomes.

A net worth statement can be used to monitor the changes in your wealth over time.

Raymond feels that he is wealthy because he has $10 000 cash in the bank,two expensive cars worth about $100 000,and a house worth $1 million.However,he also carries a $25 000 credit card liability and has a $40 000 bank loan due within six months.What financial problem does Raymond have?

Net worth always increases when you increase the value of your assets.

Mary earns $3500 per month.After payroll deductions from the government,Mary takes home 85 percent of her salary.Mary wants to use a pay yourself first method and puts $330 into her savings account before spending anything and $200 towards her student loans.What is Mary's saving rate?

All of the following affect cash outflows except

Over time the balance sheet will show that your budgeting process is successful if

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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