Question 1

Which of the following intermediate goals is stated most clearly?

Accepted Answer

A) Buy a car for less than $17,000 within 6 months 
B) Retire in 10 years at age 65 with $2,000,000 in my 401(k)account 
C) Purchase a house with a mortgage no greater than $150,000 within 3 years 
D) Set up an emergency fund 
E) Invest $50 per month for the next 18 years for my nephew's college fund 
A) Buy a car for less than $17,000 within 6 months 
B) Retire in 10 years at age 65 with $2,000,000 in my 401(k)account 
C) Purchase a house with a mortgage no greater than $150,000 within 3 years 
D) Set up an emergency fund 
E) Invest $50 per month for the next 18 years for my nephew's college fund C

Question 2

Provide an example of a clear financial goal.Identify if it is a short-term,intermediate,or long-term goal.

Accepted Answer

Answers will vary by student.Each goal should take a SMART approach: state a specific objective,measurable with a specific amount,action-oriented,realistic for your income and life situation,and based on a time frame.
Short-term goals should be achieved within the next year or so while intermediate goals have a time frame of 2 to 5 years,and long-term goals will take more than 5 years to accomplish.

Question 3

An example of a personal opportunity cost would be

Accepted Answer

A)  Interest lost by using savings to make a purchase. 
B)  Higher earnings on savings that must be kept on deposit a minimum of six months. 
C)  Lost wages due to continuing as a full-time student. 
D)  Time comparing several brands of personal computers. 
E)  Having to pay a tax penalty due to not having enough withheld from your monthly salary. 
A)  Interest lost by using savings to make a purchase. 
B)  Higher earnings on savings that must be kept on deposit a minimum of six months. 
C)  Lost wages due to continuing as a full-time student. 
D)  Time comparing several brands of personal computers. 
E)  Having to pay a tax penalty due to not having enough withheld from your monthly salary. D

Question 4

Future value computations are also referred to as

Accepted Answer

A)  Discounting. 
B)  Add-on interest. 
C)  Compounding. 
D)  Simple interest. 
E)  An annuity. 
A)  Discounting. 
B)  Add-on interest. 
C)  Compounding. 
D)  Simple interest. 
E)  An annuity.

Question 5

Who is most likely to benefit by inflation?

Accepted Answer

A)  Retired people 
B)  Lenders 
C)  Borrowers 
D)  Low-income consumers 
E)  Government 
A)  Retired people 
B)  Lenders 
C)  Borrowers 
D)  Low-income consumers 
E)  Government

Question 6

Fran Gardner has a goal of "saving $25 per month for a TV".Fran's goal lacks

Accepted Answer

A)  Measurable terms 
B)  A realistic perspective 
C)  An action-orientation 
D)  A specific objective 
E)  A time frame 
A)  Measurable terms 
B)  A realistic perspective 
C)  An action-orientation 
D)  A specific objective 
E)  A time frame

Question 7

The uncertainty associated with decision making is referred to as

Accepted Answer

A)  Opportunity cost. 
B)  Selection of alternatives. 
C)  Financial goals. 
D)  Personal values. 
E)  Risk. 
A)  Opportunity cost. 
B)  Selection of alternatives. 
C)  Financial goals. 
D)  Personal values. 
E)  Risk.

Question 8

Attempts to increase income are part of the _____________ component of financial planning.

Accepted Answer

A)  Obtaining 
B)  Planning 
C)  Saving 
D)  Borrowing 
E)  Spending 
A)  Obtaining 
B)  Planning 
C)  Saving 
D)  Borrowing 
E)  Spending

Question 9

The changing cost of money is referred to as ____________ risk.

Accepted Answer

A)  interest-rate 
B)  inflation 
C)  income 
D)  liquidity 
E)  personal 
A)  interest-rate 
B)  inflation 
C)  income 
D)  liquidity 
E)  personal

Question 10

Who can benefit from financial planning?
 How?

Accepted Answer

Answers can vary but should consider lif

Question 11

Which of the following short-term goals is stated most clearly?

Accepted Answer

A) Buy a car for less than $17,000 within 6 months 
B) Retire in 10 years at age 65 with $2,000,000 in my 401(k)account 
C) Purchase a house with a mortgage no greater than $150,000 within 5 years 
D) Set up an emergency fund 
E) Invest $50 per month for the next 18 years for my nephew's college fund 
A) Buy a car for less than $17,000 within 6 months 
B) Retire in 10 years at age 65 with $2,000,000 in my 401(k)account 
C) Purchase a house with a mortgage no greater than $150,000 within 5 years 
D) Set up an emergency fund 
E) Invest $50 per month for the next 18 years for my nephew's college fund

Question 12

Financial Plans are only created by financial planners.

Accepted Answer

A) True 
 B)False

Question 13

Interest earned is calculated by multiplying the principal times the opportunity cost.

Accepted Answer

A) True 
 B)False

Question 14

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Accepted Answer

A)  Sharing 
B)  Savings 
C)  Obtaining 
D)  Borrowing 
E)  Protecting 
A)  Sharing 
B)  Savings 
C)  Obtaining 
D)  Borrowing 
E)  Protecting

Question 15

Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 years,so he can purchase a used car at that time.What type of computation would he use to determine the amount he will have for his purchase?

Accepted Answer

A)  Present value of a single amount 
B)  Future value of a single amount 
C)  Simple interest 
D)  Present value of an annuity 
E)  Future value of an annuity 
A)  Present value of a single amount 
B)  Future value of a single amount 
C)  Simple interest 
D)  Present value of an annuity 
E)  Future value of an annuity

Question 16

The time value of money refers to

Accepted Answer

A)  Personal opportunity costs such as time lost on an activity. 
B)  Financial decisions that require borrowing funds from a financial institution. 
C)  Changes in interest rates due to changes in the supply and demand for money in our economy. 
D)  Increases in an amount of money as a result of interest earned. 
E)  Changing demographic trends in our society. 
A)  Personal opportunity costs such as time lost on an activity. 
B)  Financial decisions that require borrowing funds from a financial institution. 
C)  Changes in interest rates due to changes in the supply and demand for money in our economy. 
D)  Increases in an amount of money as a result of interest earned. 
E)  Changing demographic trends in our society.

Question 17

Personal financial planning is the process of managing your money to achieve personal economic satisfaction.

Accepted Answer

A) True 
 B)False

Question 18

If inflation is expected to be 9 percent,how long will it take for prices to double?

Accepted Answer

A)  6 years 
B)  7 years 
C)  8 years 
D)  12 years 
E)  18 years 
A)  6 years 
B)  7 years 
C)  8 years 
D)  12 years 
E)  18 years

Question 19

Why might a goal regarding use of leisure time be important to include in a financial plan?

Accepted Answer

Leisure goals,such as developing a hobby

Question 20

Many Americans have money problems because of

Accepted Answer

A)  Poor planning and weak money management habits 
B)  Too many clearly defined goals 
C)  Proper use of credit 
D)  Not enough advertising to make effective decisions 
E)  Controlled spending 
A)  Poor planning and weak money management habits 
B)  Too many clearly defined goals 
C)  Proper use of credit 
D)  Not enough advertising to make effective decisions 
E)  Controlled spending

Which of the following intermediate goals is stated most clearly?

Provide an example of a clear financial goal.Identify if it is a short-term,intermediate,or long-term goal.

An example of a personal opportunity cost would be

Future value computations are also referred to as

Who is most likely to benefit by inflation?

Fran Gardner has a goal of "saving $25 per month for a TV".Fran's goal lacks

The uncertainty associated with decision making is referred to as

Attempts to increase income are part of the _____________ component of financial planning.

The changing cost of money is referred to as ____________ risk.

Who can benefit from financial planning? How?

Which of the following short-term goals is stated most clearly?

Financial Plans are only created by financial planners.

Interest earned is calculated by multiplying the principal times the opportunity cost.

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 years,so he can purchase a used car at that time.What type of computation would he use to determine the amount he will have for his purchase?

The time value of money refers to

Personal financial planning is the process of managing your money to achieve personal economic satisfaction.

If inflation is expected to be 9 percent,how long will it take for prices to double?

Why might a goal regarding use of leisure time be important to include in a financial plan?

Many Americans have money problems because of

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 1: Personal Financial Planning in Action

Which of the following intermediate goals is stated most clearly?

Provide an example of a clear financial goal.Identify if it is a short-term,intermediate,or long-term goal.

An example of a personal opportunity cost would be

Future value computations are also referred to as

Who is most likely to benefit by inflation?

Fran Gardner has a goal of "saving $25 per month for a TV".Fran's goal lacks

The uncertainty associated with decision making is referred to as

Attempts to increase income are part of the _____________ component of financial planning.

The changing cost of money is referred to as ____________ risk.

Who can benefit from financial planning? How?

Which of the following short-term goals is stated most clearly?

Financial Plans are only created by financial planners.

Interest earned is calculated by multiplying the principal times the opportunity cost.

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 years,so he can purchase a used car at that time.What type of computation would he use to determine the amount he will have for his purchase?

The time value of money refers to

Personal financial planning is the process of managing your money to achieve personal economic satisfaction.

If inflation is expected to be 9 percent,how long will it take for prices to double?

Why might a goal regarding use of leisure time be important to include in a financial plan?

Many Americans have money problems because of

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters