Exam 1: The Financial Planning Process

While each person's financial plan is different,some common factors guide all sound financial plans.Which of the following is one of the common factors?

It is important to take a close look at the 2008 economic downturn as a means to highlight how vulnerable American's finances are.

Step 3 of the personal financial planning process is "Develop a Plan of Action." According to your text,which of the following is not one of the "common concerns" that should guide all financial plans?

Suppose that you are a 60-year-old business owner.What stage of the financial life cycle are you currently in?

Which basic step to personal financial planning should be considered when examining your current financial situation?

What is one difference between stage 2 in the Financial Life Cycle and stage 3 in the Financial Life Cycle?

Financial planning might not help you earn more,but it can help you use the money you do earn to achieve your

Explain the essence and importance of each of the stages in the financial life cycle.

The most important aspect of choosing a career is the amount of income that career will generate over your lifetime.

Charlie is sixty-four years old and is looking forward to his retirement next year.He currently has all of his 401(k)retirement money invested in the stock market.What financial principle from Chapter 1 does he need to understand better?

A short-term goal might take from one to 10 years to accomplish.

When you are involved in ________ planning,you are planning for your eventual death and the distribution of your wealth to your heirs.

An economic condition in which rising prices reduce the purchasing power of money is termed

List the ten principles of personal finance.

Why do you need to have liquidity?

Without recognizing ________ it is impossible to understand compound interest,which allows investments to grow over time.

According to a recent Rockefeller Foundation report,the financial issue Americans worry about the most is the ability to pay

Jessica is very proud of herself for having $5,000 in her savings account that pays 4 percent interest.She currently has a balance of $2,300 on her credit card account that charges 21 percent interest.Jessica thinks she is making a wise financial decision by keeping her money in her savings account instead of paying off her credit card balance.What financial principle from Chapter 1 would you use to give her good advice?

Why is it important to conduct an effective self-assessment?

Suppose that you just completed your first year of college with $12,000 in loans and plan to borrow the maximum each year from now until graduation.You have never accounted for the way you spend your money,do not have a budget,and want to insure that you will be able to repay your loans after college.What is the most important thing you can do right now?