Question 1

Present 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 2

The major function of a financial plan is to

Accepted Answer

A)  Reduce taxes. 
B)  Increase savings. 
C)  Achieve financial goals. 
D)  Improve your credit rating. 
E)  Obtain adequate insurance protection. 
A)  Reduce taxes. 
B)  Increase savings. 
C)  Achieve financial goals. 
D)  Improve your credit rating. 
E)  Obtain adequate insurance protection.

Question 3

To calculate the time value of money,we need to consider all of the following except the

Accepted Answer

A)  amount of the savings. 
B)  Annual interest rate. 
C)  Length of time the money is invested. 
D)  Type of investment. 
E)  Principal. 
A)  amount of the savings. 
B)  Annual interest rate. 
C)  Length of time the money is invested. 
D)  Type of investment. 
E)  Principal.

Question 4

John Jones was laid off from his job two months ago.He just received an offer for a position that pays 2/3 the salary of his old job.Why should he set up a financial plan?

Accepted Answer

A)  To increase the effectiveness of obtaining, using, and protecting his financial resources. 
B)  To decrease control of his financial affairs regarding debt. 
C)  To accept the loss of freedom from financial worries due to his new position. 
D)  To learn how to manage with less savings. 
E)  To find out why he was laid off. 
A)  To increase the effectiveness of obtaining, using, and protecting his financial resources. 
B)  To decrease control of his financial affairs regarding debt. 
C)  To accept the loss of freedom from financial worries due to his new position. 
D)  To learn how to manage with less savings. 
E)  To find out why he was laid off.

Question 5

Wanda Green wants to take out a 4 year loan to purchase a car.What type of computation would she use to calculate her monthly payments?

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 6

If a $10,000 investment earns a 4 % annual return,what should its value be after one year?

Accepted Answer

A)  $4,000 
B)  $4,100 
C)  $10,000 
D)  $10,040 
E)  $10,400 
A)  $4,000 
B)  $4,100 
C)  $10,000 
D)  $10,040 
E)  $10,400

Question 7

The rising of prices that causes changes in buying power 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 8

Using the services of financial institutions or specialists (such as insurance agents or investment brokers)will be most evident in your effort to

Accepted Answer

A)  Develop financial goals. 
B)  Evaluate and revise your actions. 
C)  Analyze your current financial situation. 
D)  Implement your financial plan. 
E)  Create a financial plan of action. 
A)  Develop financial goals. 
B)  Evaluate and revise your actions. 
C)  Analyze your current financial situation. 
D)  Implement your financial plan. 
E)  Create a financial plan of action.

Question 9

Which of the following long-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 
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 
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

Question 10

Retirement planning includes thinking about your housing situation,recreational activities,and possible volunteer or part-time work.

Accepted Answer

A) True 
 B)False

Question 11

Annual earnings on a $500 Certificate of Deposit earning 4.50% would be

Accepted Answer

A)  $20.00 
B)  $22.50 
C)  $25.00 
D)  $500.00 
E)  $545.00 
A)  $20.00 
B)  $22.50 
C)  $25.00 
D)  $500.00 
E)  $545.00

Question 12

Which of the following goals would be the easiest to implement and measure?

Accepted Answer

A)  Invest $2,000 a year for retirement. 
B)  Reduce our debt payments. 
C)  Save funds for an annual vacation. 
D)  Save $100 a month to create a $4,000 emergency fund. 
E)  Spend less each month. 
A)  Invest $2,000 a year for retirement. 
B)  Reduce our debt payments. 
C)  Save funds for an annual vacation. 
D)  Save $100 a month to create a $4,000 emergency fund. 
E)  Spend less each month.

Question 13

Which of the following is an example of opportunity cost?

Accepted Answer

A)  Renting an apartment near school 
B)  Saving money instead of taking a vacation 
C)  Organizing income tax records 
D)  Purchasing automobile insurance 
E)  Using a personal computer for financial planning 
A)  Renting an apartment near school 
B)  Saving money instead of taking a vacation 
C)  Organizing income tax records 
D)  Purchasing automobile insurance 
E)  Using a personal computer for financial planning

Question 14

If a $10,000 investment earns a 7% annual return,what should its value be after 5 years?

Accepted Answer

A)  $10,035 
B)  $14,070 
C)  $14,700 
D)  $14,030 
E)  $14,300 
A)  $10,035 
B)  $14,070 
C)  $14,700 
D)  $14,030 
E)  $14,300

Question 15

The stages that an individual goes through based on stages in the family and financial needs is called the

Accepted Answer

A)  Financial planning process 
B)  Budgeting procedure 
C)  Personal economic cycle 
D)  Adult life cycle 
E)  Tax planning process 
A)  Financial planning process 
B)  Budgeting procedure 
C)  Personal economic cycle 
D)  Adult life cycle 
E)  Tax planning process

Question 16

Purchasing a car is an example of a consumable-product goal.

Accepted Answer

A) True 
 B)False

Question 17

What types of risks are commonly associated with personal financial decisions?
 How can these risks be evaluated and minimized to reduce personal and financial difficulties?

Accepted Answer

Common risks are inflation risk,interest

Question 18

The life situation of a household has little influence on personal financial planning decisions.

Accepted Answer

A) True 
 B)False

Question 19

An advantage of personal financial planning is:

Accepted Answer

A)  The use of low-interest savings 
B)  Increased impulse spending 
C)  Increased control of financial affairs 
D)  More credit card debt 
E)  Less monitoring of investments 
A)  The use of low-interest savings 
B)  Increased impulse spending 
C)  Increased control of financial affairs 
D)  More credit card debt 
E)  Less monitoring of investments

Question 20

Inflation is most harmful to people with incomes expected to increase.

Accepted Answer

A) True 
 B)False

Present value computations are also referred to as

The major function of a financial plan is to

To calculate the time value of money,we need to consider all of the following except the

John Jones was laid off from his job two months ago.He just received an offer for a position that pays 2/3 the salary of his old job.Why should he set up a financial plan?

Wanda Green wants to take out a 4 year loan to purchase a car.What type of computation would she use to calculate her monthly payments?

If a $10,000 investment earns a 4 % annual return,what should its value be after one year?

The rising of prices that causes changes in buying power is referred to as ____________ risk.

Using the services of financial institutions or specialists (such as insurance agents or investment brokers)will be most evident in your effort to

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

Retirement planning includes thinking about your housing situation,recreational activities,and possible volunteer or part-time work.

Annual earnings on a $500 Certificate of Deposit earning 4.50% would be

Which of the following goals would be the easiest to implement and measure?

Which of the following is an example of opportunity cost?

If a $10,000 investment earns a 7% annual return,what should its value be after 5 years?

The stages that an individual goes through based on stages in the family and financial needs is called the

Purchasing a car is an example of a consumable-product goal.

What types of risks are commonly associated with personal financial decisions? How can these risks be evaluated and minimized to reduce personal and financial difficulties?

The life situation of a household has little influence on personal financial planning decisions.

An advantage of personal financial planning is:

Inflation is most harmful to people with incomes expected to increase.

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

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Exam 1: Personal Financial Planning in Action

Present value computations are also referred to as

The major function of a financial plan is to

To calculate the time value of money,we need to consider all of the following except the

John Jones was laid off from his job two months ago.He just received an offer for a position that pays 2/3 the salary of his old job.Why should he set up a financial plan?

Wanda Green wants to take out a 4 year loan to purchase a car.What type of computation would she use to calculate her monthly payments?

If a $10,000 investment earns a 4 % annual return,what should its value be after one year?

The rising of prices that causes changes in buying power is referred to as ____________ risk.

Using the services of financial institutions or specialists (such as insurance agents or investment brokers)will be most evident in your effort to

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

Retirement planning includes thinking about your housing situation,recreational activities,and possible volunteer or part-time work.

Annual earnings on a $500 Certificate of Deposit earning 4.50% would be

Which of the following goals would be the easiest to implement and measure?

Which of the following is an example of opportunity cost?

If a $10,000 investment earns a 7% annual return,what should its value be after 5 years?

The stages that an individual goes through based on stages in the family and financial needs is called the

Purchasing a car is an example of a consumable-product goal.

What types of risks are commonly associated with personal financial decisions? How can these risks be evaluated and minimized to reduce personal and financial difficulties?

The life situation of a household has little influence on personal financial planning decisions.

An advantage of personal financial planning is:

Inflation is most harmful to people with incomes expected to increase.

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