Question 1

Financial decisions related to income include all of the following except

Accepted Answer

A)  Spending 
B)  Saving 
C)  Sharing 
D)  Taking 
E)  All of these are financial decisions 
A)  Spending 
B)  Saving 
C)  Sharing 
D)  Taking 
E)  All of these are financial decisions

Question 2

A formalized report that summarizes your current financial situation,analyzes your financial needs,and recommends a direction for your financial activities is a(n)

Accepted Answer

A)  Insurance prospectus. 
B)  Financial plan. 
C)  Budget. 
D)  Investment forecast. 
E)  Statement. 
A)  Insurance prospectus. 
B)  Financial plan. 
C)  Budget. 
D)  Investment forecast. 
E)  Statement.

Question 3

Lower consumer saving and investing is likely to be accompanied by

Accepted Answer

A)  Lower union wages 
B)  Lower interest rates 
C)  Lower production costs 
D)  Higher interest rates 
E)  Higher exports 
A)  Lower union wages 
B)  Lower interest rates 
C)  Lower production costs 
D)  Higher interest rates 
E)  Higher exports

Question 4

The loss of a job 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 5

Rebecca Gladyn plans to attend graduate school in 5 years.She thinks that she will need a total of $32,000 to pay for school,and she wants to save money each month to reach her goal.What type of computation should she use?

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

Rob Redbird is interested in attending a concert next weekend.Unfortunately,he is scheduled to work.If he finds a substitute for his shift so he can attend the concert,what kind of cost is he incurring?

Accepted Answer

A)  Fixed 
B)  Opportunity 
C)  Unexpected 
D)  Unavoidable 
E)  Tangible 
A)  Fixed 
B)  Opportunity 
C)  Unexpected 
D)  Unavoidable 
E)  Tangible

Question 7

If a $10,000 investment increases to $10,080 in one year,what is its rate of return?

Accepted Answer

A)  .8 percent 
B)  1.08 percent 
C)  8 percent 
D)  80 percent 
E)  108 percent 
A)  .8 percent 
B)  1.08 percent 
C)  8 percent 
D)  80 percent 
E)  108 percent

Question 8

The goal of investing $50 per month for the next 18 years for your nephew's college fund is a(n)__________ goal.

Accepted Answer

A)  Short-term 
B)  Intermediate 
C)  Long-term 
D)  Intangible 
E)  Durable 
A)  Short-term 
B)  Intermediate 
C)  Long-term 
D)  Intangible 
E)  Durable

Question 9

The first step of the financial planning process is to

Accepted Answer

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

Question 10

Sally Smith's friends have told her that they think she should consider a visit to a personal financial planner.Why do you think her friends made the suggestion?

Accepted Answer

A)  Sally usually saves 10 percent of her paycheck for long-term goals. 
B)  Sally has no credit card debt. 
C)  Sally tracks her investments and makes changes to her allocations once per year. 
D)  Sally plans to quit her job and volunteer for local organizations. 
E)  Sally has used a budget for years. 
A)  Sally usually saves 10 percent of her paycheck for long-term goals. 
B)  Sally has no credit card debt. 
C)  Sally tracks her investments and makes changes to her allocations once per year. 
D)  Sally plans to quit her job and volunteer for local organizations. 
E)  Sally has used a budget for years.

Question 11

Patrick Guitman recently graduated from college with $20,000 in student loans and $5,000 in credit card debt.He usually makes minimum payments on his debt and he has been late with three payments in the last year.He wants to buy a new car but was told that his interest rate on a loan would be very high.What is the most likely reason this might be so?

Accepted Answer

A)  General interest rates are very low 
B)  His credit rating is poor because of his late payments 
C)  He already has a student loan outstanding 
D)  Recent graduates are not allowed to have more than $25,000 in debt outstanding 
E)  Interest rates must be tied to the CPI 
A)  General interest rates are very low 
B)  His credit rating is poor because of his late payments 
C)  He already has a student loan outstanding 
D)  Recent graduates are not allowed to have more than $25,000 in debt outstanding 
E)  Interest rates must be tied to the CPI

Question 12

Opportunity costs refer to money already spent.

Accepted Answer

A) True 
 B)False

Question 13

Randy Hill wants to retire in 20 years with $1,000,000.If he can earn 10% per year on his investments,how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar.

Accepted Answer

A)  $17,460 
B)  $18,000 
C)  $5,727 
D)  $25,000 
E)  None of the above 
A)  $17,460 
B)  $18,000 
C)  $5,727 
D)  $25,000 
E)  None of the above

Question 14

Place the following steps for a personal financial plan in the proper order: 1.Review and revise your plan
2)Identify alternative courses of action
3)Create and implement your financial action plan
4)Determine your current financial situation
5)Evaluate your alternatives
6)Develop your financial goals

Accepted Answer

A)  6, 1, 2, 5, 3, 4 
B)  4, 2, 6, 5, 3, 1 
C)  3, 6, 4, 2, 5, 1 
D)  4, 6, 2, 5, 3, 1 
E)  6, 2, 5, 4, 1, 3 
A)  6, 1, 2, 5, 3, 4 
B)  4, 2, 6, 5, 3, 1 
C)  3, 6, 4, 2, 5, 1 
D)  4, 6, 2, 5, 3, 1 
E)  6, 2, 5, 4, 1, 3

Question 15

To develop a financial plan,one should

Accepted Answer

A)  Set several general goals for the short-term 
B)  Only set long-term goals after short-term goals have been accomplished 
C)  Focus on intermediate goals first 
D)  Identify specific, realistic goals that are measurable along with a time frame and an action plan 
E)  Not worry about whether or not the goals can be achieved based on one's income and life situation 
A)  Set several general goals for the short-term 
B)  Only set long-term goals after short-term goals have been accomplished 
C)  Focus on intermediate goals first 
D)  Identify specific, realistic goals that are measurable along with a time frame and an action plan 
E)  Not worry about whether or not the goals can be achieved based on one's income and life situation

Question 16

Which of the following would increase the interest rate for a loan?

Accepted Answer

A)  Poor credit rating 
B)  Higher down payment 
C)  Constant interest rates 
D)  Lower consumer prices 
E)  Short time to maturity 
A)  Poor credit rating 
B)  Higher down payment 
C)  Constant interest rates 
D)  Lower consumer prices 
E)  Short time to maturity

Question 17

Which of the following is correct?

Accepted Answer

A)  A car purchase is a consumable-product goal 
B)  Entertainment is a durable-product goal 
C)  Appliances and sporting equipment are intangible-purchase goals 
D)  Leisure and education are durable-product goals 
E)  Food and clothing are consumable-product goals 
A)  A car purchase is a consumable-product goal 
B)  Entertainment is a durable-product goal 
C)  Appliances and sporting equipment are intangible-purchase goals 
D)  Leisure and education are durable-product goals 
E)  Food and clothing are consumable-product goals

Question 18

_________ goals relate to infrequently purchased,expensive items.

Accepted Answer

A)  Short-term 
B)  Intangible-purchase 
C)  Durable-product 
D)  Consumable-products 
E)  Intermediate 
A)  Short-term 
B)  Intangible-purchase 
C)  Durable-product 
D)  Consumable-products 
E)  Intermediate

Question 19

Short-term goals are usually achieved within the next year or so.

Accepted Answer

A) True 
 B)False

Question 20

Opportunity cost refers to

Accepted Answer

A)  Money needed for major consumer purchases. 
B)  The trade-off of a decision. 
C)  The amount paid for taxes when a purchase is made. 
D)  Current interest rates. 
E)  Evaluating different alternatives for financial decisions. 
A)  Money needed for major consumer purchases. 
B)  The trade-off of a decision. 
C)  The amount paid for taxes when a purchase is made. 
D)  Current interest rates. 
E)  Evaluating different alternatives for financial decisions.

Financial decisions related to income include all of the following except

A formalized report that summarizes your current financial situation,analyzes your financial needs,and recommends a direction for your financial activities is a(n)

Lower consumer saving and investing is likely to be accompanied by

The loss of a job is referred to as ____________ risk.

Rebecca Gladyn plans to attend graduate school in 5 years.She thinks that she will need a total of $32,000 to pay for school,and she wants to save money each month to reach her goal.What type of computation should she use?

Rob Redbird is interested in attending a concert next weekend.Unfortunately,he is scheduled to work.If he finds a substitute for his shift so he can attend the concert,what kind of cost is he incurring?

If a $10,000 investment increases to $10,080 in one year,what is its rate of return?

The goal of investing $50 per month for the next 18 years for your nephew's college fund is a(n)__________ goal.

The first step of the financial planning process is to

Sally Smith's friends have told her that they think she should consider a visit to a personal financial planner.Why do you think her friends made the suggestion?

Opportunity costs refer to money already spent.

Randy Hill wants to retire in 20 years with $1,000,000.If he can earn 10% per year on his investments,how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar.

To develop a financial plan,one should

Which of the following would increase the interest rate for a loan?

Which of the following is correct?

_________ goals relate to infrequently purchased,expensive items.

Short-term goals are usually achieved within the next year or so.

Opportunity cost refers to

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

Financial decisions related to income include all of the following except

A formalized report that summarizes your current financial situation,analyzes your financial needs,and recommends a direction for your financial activities is a(n)

Lower consumer saving and investing is likely to be accompanied by

The loss of a job is referred to as ____________ risk.

Rebecca Gladyn plans to attend graduate school in 5 years.She thinks that she will need a total of $32,000 to pay for school,and she wants to save money each month to reach her goal.What type of computation should she use?

Rob Redbird is interested in attending a concert next weekend.Unfortunately,he is scheduled to work.If he finds a substitute for his shift so he can attend the concert,what kind of cost is he incurring?

If a $10,000 investment increases to $10,080 in one year,what is its rate of return?

The goal of investing $50 per month for the next 18 years for your nephew's college fund is a(n)__________ goal.

The first step of the financial planning process is to

Sally Smith's friends have told her that they think she should consider a visit to a personal financial planner.Why do you think her friends made the suggestion?

Opportunity costs refer to money already spent.

Randy Hill wants to retire in 20 years with $1,000,000.If he can earn 10% per year on his investments,how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar.

To develop a financial plan,one should

Which of the following would increase the interest rate for a loan?

Which of the following is correct?

_________ goals relate to infrequently purchased,expensive items.

Short-term goals are usually achieved within the next year or so.

Opportunity cost refers to

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