Question 1

All else being equal,an increase in inflation will cause investors to require a higher rate of return on an asset.

Accepted Answer

A) True 
 B)False

Question 2

Personal financial planning can help you to

Accepted Answer

A)  deal with unplanned health issues. 
B)  minimize your tax payments to Uncle Sam. 
C)  minimize your chances of personal bankruptcy. 
D)  have enough money for a comfortable retirement. 
E)  all of the above. 
A)  deal with unplanned health issues. 
B)  minimize your tax payments to Uncle Sam. 
C)  minimize your chances of personal bankruptcy. 
D)  have enough money for a comfortable retirement. 
E)  all of the above.

Question 3

According to a resumedoctor.com recruiting survey,the most common mistake made by job interviewees is talking too much.

Accepted Answer

A) True 
 B)False

Question 4

What aspect of financial planning might you discuss with a friend who buys fancy coffee drinks twice a day,visits the mall at least once a week for recreational shopping,and prefers impulse buying to carefully researched purchasing?

Accepted Answer

A)  Just do it. 
B)  Nothing happens without a plan. 
C)  Mind games, financial personality, and your money 
D)  Waste not, want not-smart spending matters. 
A)  Just do it. 
B)  Nothing happens without a plan. 
C)  Mind games, financial personality, and your money 
D)  Waste not, want not-smart spending matters.

Question 5

In 2008,the Bear Stearns Company collapsed could not be saved and was sold to JP Morgan Chase for $10 per share,a price far below its pre-crisis 52-week high of $133.20 per share.Prior to the collapse,many of the company's employees had all of their retirement money invested only in Bear Stearns common stock.This was a very risky financial strategy for just such a reason: What if the company dissolves? What financial principle from Chapter 1 did they need to understand better?

Accepted Answer

A)  Risk and return go hand in hand. 
B)  Nothing happens without a plan. 
C)  The time value of money 
D)  Stuff happens, the importance of liquidity. 
A)  Risk and return go hand in hand. 
B)  Nothing happens without a plan. 
C)  The time value of money 
D)  Stuff happens, the importance of liquidity.

Question 6

The economic downturn that began in 2008 resulted in negative consequences,including

Accepted Answer

A)  a dramatic increase in unemployment rates. 
B)  disrupted financial markets. 
C)  difficulty for consumers to borrow money from lending institutions. 
D)  all consumers increased their wealth. 
E)  only A, B, and C are correct. 
A)  a dramatic increase in unemployment rates. 
B)  disrupted financial markets. 
C)  difficulty for consumers to borrow money from lending institutions. 
D)  all consumers increased their wealth. 
E)  only A, B, and C are correct.

Question 7

Which of the following typically occur(s)during stage 1 of the financial life cycle?

Accepted Answer

A)  Initial goal setting 
B)  Insurance planning 
C)  Saving for goals 
D)  Home purchase 
E)  All the above 
A)  Initial goal setting 
B)  Insurance planning 
C)  Saving for goals 
D)  Home purchase 
E)  All the above

Question 8

When comparing two different investment opportunities the investor should always choose the investment that minimizes the total amount of taxes paid.

Accepted Answer

A) True 
 B)False

Question 9

Chapter 1 discusses 10 principles that form the foundation of personal finance.The principle that considers the value of compound interest is the ________ principle.

Accepted Answer

A)  all risk is not equal 
B)  pay yourself first 
C)  competitive inflation adjustment 
D)  time value of money 
E)  none of the above 
A)  all risk is not equal 
B)  pay yourself first 
C)  competitive inflation adjustment 
D)  time value of money 
E)  none of the above

Question 10

Leticia is twenty-two years old and she has all of her savings in a Certificate of Deposit (CD)at the bank that currently pays an annual 1.5 percent yield.The account is protected by the FDIC so it is virtually risk free.She hopes to use her savings for a down payment on a new house in ten years.Inflation in house prices in her area has averaged 4 percent per year.What financial principle does she need to pay better attention to?

Accepted Answer

A)  Nothing happens without a plan. 
B)  Waste not, want not, smart spending matters. 
C)  Risk and return go hand in hand. 
D)  All of the above are correct. 
A)  Nothing happens without a plan. 
B)  Waste not, want not, smart spending matters. 
C)  Risk and return go hand in hand. 
D)  All of the above are correct.

Question 11

Which of the following is outlined in the text as reason(s)why many people do not have an adequate financial plan?

Accepted Answer

A)  For most people it is easier to spend than save. 
B)  Procrastination can affect everyone. 
C)  Many of us lack the proper knowledge. 
D)  There is never enough time for organizing and planning. 
E)  All of the above are common excuses for not planning. 
A)  For most people it is easier to spend than save. 
B)  Procrastination can affect everyone. 
C)  Many of us lack the proper knowledge. 
D)  There is never enough time for organizing and planning. 
E)  All of the above are common excuses for not planning.

Question 12

After retirement starts,which aspect of financial planning becomes imperative?

Accepted Answer

A)  Maintaining a regular pattern of saving 
B)  Long-term borrowing commitments 
C)  Estate planning 
D)  Effects of inflation 
A)  Maintaining a regular pattern of saving 
B)  Long-term borrowing commitments 
C)  Estate planning 
D)  Effects of inflation

Question 13

Matthew bought a used car last month for $2,400.He just found out he needs a new transmission that will cost $2,400 to install.He is asking you for advice as to what he should do.What financial principle would you use to base your advice on?

Accepted Answer

A)  Waste not, want not, smart spending matters. 
B)  Mind games, financial personality, and your money 
C)  Protect yourself from major catastrophes. 
D)  None of the above would be correct. 
A)  Waste not, want not, smart spending matters. 
B)  Mind games, financial personality, and your money 
C)  Protect yourself from major catastrophes. 
D)  None of the above would be correct.

Question 14

Annual public school tuition and fees are three times more expensive than private school tuition and fees.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is one of the five basic steps in personal financial planning?

Accepted Answer

A)  Evaluate your personal health. 
B)  Define your career goals. 
C)  Develop a plan of action. 
D)  Let an accountant review your plan. 
A)  Evaluate your personal health. 
B)  Define your career goals. 
C)  Develop a plan of action. 
D)  Let an accountant review your plan.

Question 16

Diversification allows you to reduce risk.

Accepted Answer

A) True 
 B)False

Question 17

The first steps in career planning are conducting a self-assessment and developing an understanding of what sort of lifestyle you wish to lead.

Accepted Answer

A) True 
 B)False

Question 18

Being financially secure involves balancing what you earn with

Accepted Answer

A)  your investments. 
B)  what you spend. 
C)  your retirement plans. 
D)  your current level of debt. 
A)  your investments. 
B)  what you spend. 
C)  your retirement plans. 
D)  your current level of debt.

Question 19

Which basic step to personal financial planning should be considered when establishing your personal financial goals?

Accepted Answer

A)  Step 1 
B)  Step 2 
C)  Step 3 
D)  Step 4 
A)  Step 1 
B)  Step 2 
C)  Step 3 
D)  Step 4

Question 20

Most individuals will reach their financial goals without planning or budgeting.

Accepted Answer

A) True 
 B)False

All else being equal,an increase in inflation will cause investors to require a higher rate of return on an asset.

Personal financial planning can help you to

According to a resumedoctor.com recruiting survey,the most common mistake made by job interviewees is talking too much.

What aspect of financial planning might you discuss with a friend who buys fancy coffee drinks twice a day,visits the mall at least once a week for recreational shopping,and prefers impulse buying to carefully researched purchasing?

The economic downturn that began in 2008 resulted in negative consequences,including

Which of the following typically occur(s)during stage 1 of the financial life cycle?

When comparing two different investment opportunities the investor should always choose the investment that minimizes the total amount of taxes paid.

Chapter 1 discusses 10 principles that form the foundation of personal finance.The principle that considers the value of compound interest is the ________ principle.

Which of the following is outlined in the text as reason(s)why many people do not have an adequate financial plan?

After retirement starts,which aspect of financial planning becomes imperative?

Matthew bought a used car last month for $2,400.He just found out he needs a new transmission that will cost $2,400 to install.He is asking you for advice as to what he should do.What financial principle would you use to base your advice on?

Annual public school tuition and fees are three times more expensive than private school tuition and fees.

Which of the following is one of the five basic steps in personal financial planning?

Diversification allows you to reduce risk.

The first steps in career planning are conducting a self-assessment and developing an understanding of what sort of lifestyle you wish to lead.

Being financially secure involves balancing what you earn with

Which basic step to personal financial planning should be considered when establishing your personal financial goals?

Most individuals will reach their financial goals without planning or budgeting.

Measuring Your Financial Health and Making a Plan

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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 1: The Financial Planning Process

All else being equal,an increase in inflation will cause investors to require a higher rate of return on an asset.

Personal financial planning can help you to

According to a resumedoctor.com recruiting survey,the most common mistake made by job interviewees is talking too much.

What aspect of financial planning might you discuss with a friend who buys fancy coffee drinks twice a day,visits the mall at least once a week for recreational shopping,and prefers impulse buying to carefully researched purchasing?

The economic downturn that began in 2008 resulted in negative consequences,including

Which of the following typically occur(s)during stage 1 of the financial life cycle?

When comparing two different investment opportunities the investor should always choose the investment that minimizes the total amount of taxes paid.

Chapter 1 discusses 10 principles that form the foundation of personal finance.The principle that considers the value of compound interest is the ________ principle.

Which of the following is outlined in the text as reason(s)why many people do not have an adequate financial plan?

After retirement starts,which aspect of financial planning becomes imperative?

Matthew bought a used car last month for $2,400.He just found out he needs a new transmission that will cost $2,400 to install.He is asking you for advice as to what he should do.What financial principle would you use to base your advice on?

Annual public school tuition and fees are three times more expensive than private school tuition and fees.

Which of the following is one of the five basic steps in personal financial planning?

Diversification allows you to reduce risk.

The first steps in career planning are conducting a self-assessment and developing an understanding of what sort of lifestyle you wish to lead.

Being financially secure involves balancing what you earn with

Which basic step to personal financial planning should be considered when establishing your personal financial goals?

Most individuals will reach their financial goals without planning or budgeting.

Measuring Your Financial Health and Making a Plan

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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