Question 1

If your budget forecasts a shortfall in cash flow,the best way to use your budget is to

Accepted Answer

A) eliminate all entertainment expenses for that period. 
B) build an emergency fund to prepare for the shortfall. 
C) increase cash flows from all sources not previously recorded. 
D) obtain credit in advance of the predicted shortfall. 
A) eliminate all entertainment expenses for that period. 
B) build an emergency fund to prepare for the shortfall. 
C) increase cash flows from all sources not previously recorded. 
D) obtain credit in advance of the predicted shortfall.

Question 2

If you have an increase in monthly disposable income from $4000 to $4500 and an increase in spending of $650 per month,your net cash flow is reduced by $150 per month.

Accepted Answer

A) True 
 B)False

Question 3

If your net cash flow is $1000,the total value of your assets is $14 000,and your total debts are $4000,then your net worth is $11 000.

Accepted Answer

A) True 
 B)False

Question 4

Jerry has assets of $200 000,net worth of $150 000,gross income of $60 000 and disposable income of $50,000.What are Jerry's liabilities?

Accepted Answer

A) $110 000 
B) $50 000 
C) $100 000 
D) $0 
A) $110 000 
B) $50 000 
C) $100 000 
D) $0

Question 5

Paying off a credit card with savings will have what effect on net worth?

Accepted Answer

A) Increase 
B) Decrease 
C) No effect 
D) Insufficient data 
A) Increase 
B) Decrease 
C) No effect 
D) Insufficient data

Question 6

Stocks are considered a short-term liquid investment since they are easy to sell.

Accepted Answer

A) True 
 B)False

Question 7

People who have very high incomes are much better savers than those with moderate incomes.

Accepted Answer

A) True 
 B)False

Question 8

Getting financial help from family and friends should be your first options in case of emergencies.

Accepted Answer

A) True 
 B)False

Question 9

Current liabilities include all of the following except

Accepted Answer

A) this year's monthly car payments on a three-year loan. 
B) the total mortgage on a home. 
C) the amount due on a credit card. 
D) next month's payment on a student loan. 
A) this year's monthly car payments on a three-year loan. 
B) the total mortgage on a home. 
C) the amount due on a credit card. 
D) next month's payment on a student loan.

Question 10

What is the purpose of creating your personal cash flow statement?

Accepted Answer

A) To develop your budget 
B) To create your balance sheet 
C) To track your net worth 
D) For your annual tax return records 
A) To develop your budget 
B) To create your balance sheet 
C) To track your net worth 
D) For your annual tax return records

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Use an example with numbers to illustrate financial ratios are important when considering someone's balance sheet.

Accepted Answer

There are unlimited what to illustrate t

Question 13

Paradis has total assets of $360 000,current assets of $35 000,current liabilities of $22 000,and total liabilities of $195 000.His debt-to-asset ratio is

Accepted Answer

A) 1.59. 
B) 0.63. 
C) .54. 
D) 1.85. 
A) 1.59. 
B) 0.63. 
C) .54. 
D) 1.85.

Question 14

A negative cash flow means net worth will decrease.

Accepted Answer

A) True 
 B)False

Question 15

A debt-to-asset ratio above 1 is more important than a liquidity ratio above 1.

Accepted Answer

A) True 
 B)False

Question 16

Which is an example of a possible unanticipated cash flow shortage?

Accepted Answer

A) Your car gets rear ended. 
B) Your annual life insurance payment comes due. 
C) Your property tax bill is overdue. 
D) Your car loan payment falls due. 
A) Your car gets rear ended. 
B) Your annual life insurance payment comes due. 
C) Your property tax bill is overdue. 
D) Your car loan payment falls due.

Question 17

Cash outflows represent your liabilities,such as the pay-off value on your car or home.

Accepted Answer

A) True 
 B)False

Question 18

If JT's gross income is $50 000,disposable income is $36 000,and he saves $5000 annually,his savings ratio is 10%.

Accepted Answer

A) True 
 B)False

Question 19

Which cash inflow will probably be discontinued after retirement?

Accepted Answer

A) Dividend and interest received from investments 
B) Pension payments 
C) Salary 
D) Social assistance benefits 
A) Dividend and interest received from investments 
B) Pension payments 
C) Salary 
D) Social assistance benefits

Question 20

One of the problems in making a monthly budget is that some expenses fluctuate quite a bit from month to month.

Accepted Answer

A) True 
 B)False

If your budget forecasts a shortfall in cash flow,the best way to use your budget is to

If you have an increase in monthly disposable income from $4000 to $4500 and an increase in spending of $650 per month,your net cash flow is reduced by $150 per month.

If your net cash flow is $1000,the total value of your assets is $14 000,and your total debts are $4000,then your net worth is $11 000.

Jerry has assets of $200 000,net worth of $150 000,gross income of $60 000 and disposable income of $50,000.What are Jerry's liabilities?

Paying off a credit card with savings will have what effect on net worth?

Stocks are considered a short-term liquid investment since they are easy to sell.

People who have very high incomes are much better savers than those with moderate incomes.

Getting financial help from family and friends should be your first options in case of emergencies.

Current liabilities include all of the following except

What is the purpose of creating your personal cash flow statement?

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

Use an example with numbers to illustrate financial ratios are important when considering someone's balance sheet.

Paradis has total assets of $360 000,current assets of $35 000,current liabilities of $22 000,and total liabilities of $195 000.His debt-to-asset ratio is

A negative cash flow means net worth will decrease.

A debt-to-asset ratio above 1 is more important than a liquidity ratio above 1.

Which is an example of a possible unanticipated cash flow shortage?

Cash outflows represent your liabilities,such as the pay-off value on your car or home.

If JT's gross income is $50 000,disposable income is $36 000,and he saves $5000 annually,his savings ratio is 10%.

Which cash inflow will probably be discontinued after retirement?

One of the problems in making a monthly budget is that some expenses fluctuate quite a bit from month to month.

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

If your budget forecasts a shortfall in cash flow,the best way to use your budget is to

If you have an increase in monthly disposable income from $4000 to $4500 and an increase in spending of $650 per month,your net cash flow is reduced by $150 per month.

If your net cash flow is $1000,the total value of your assets is $14 000,and your total debts are $4000,then your net worth is $11 000.

Jerry has assets of $200 000,net worth of $150 000,gross income of $60 000 and disposable income of $50,000.What are Jerry's liabilities?

Paying off a credit card with savings will have what effect on net worth?

Stocks are considered a short-term liquid investment since they are easy to sell.

People who have very high incomes are much better savers than those with moderate incomes.

Getting financial help from family and friends should be your first options in case of emergencies.

Current liabilities include all of the following except

What is the purpose of creating your personal cash flow statement?

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

Use an example with numbers to illustrate financial ratios are important when considering someone's balance sheet.

Paradis has total assets of $360 000,current assets of $35 000,current liabilities of $22 000,and total liabilities of $195 000.His debt-to-asset ratio is

A negative cash flow means net worth will decrease.

A debt-to-asset ratio above 1 is more important than a liquidity ratio above 1.

Which is an example of a possible unanticipated cash flow shortage?

Cash outflows represent your liabilities,such as the pay-off value on your car or home.

If JT's gross income is $50 000,disposable income is $36 000,and he saves $5000 annually,his savings ratio is 10%.

Which cash inflow will probably be discontinued after retirement?

One of the problems in making a monthly budget is that some expenses fluctuate quite a bit from month to month.

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