Question 1

____________ goals relate to personal relationships, health, and education.

Accepted Answer

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

Question 2

Household size is a major influence on personal financial planning decisions.

Accepted Answer

A) True 
 B)False

Question 3

Liquidity refers to

Accepted Answer

A)  the earnings on savings. 
B)  the risk of an investment. 
C)  the ease of converting a financial resource into cash. 
D)  the amount of insurance coverage a person has. 
E)  a person's inability to pay his or her debts. 
A)  the earnings on savings. 
B)  the risk of an investment. 
C)  the ease of converting a financial resource into cash. 
D)  the amount of insurance coverage a person has. 
E)  a person's inability to pay his or her debts.

Question 4

Which type of computation would a person use to determine current value of a desired amount for the future?

Accepted Answer

A)  simple interest 
B)  future value of a single amount 
C)  future value of a series of deposits 
D)  present value of a single amount 
E)  present value of a series of deposits 
A)  simple interest 
B)  future value of a single amount 
C)  future value of a series of deposits 
D)  present value of a single amount 
E)  present value of a series of deposits

Question 5

An individual invests $10,000 at a rate of 5% per annum. What will be its value in 10 years' time?

Accepted Answer

A)  $15,000 
B)  $15,853 
C)  $16,289 
D)  $18,000 
E)  $19,000 
A)  $15,000 
B)  $15,853 
C)  $16,289 
D)  $18,000 
E)  $19,000

Question 6

The main economic influence that determines prices is:

Accepted Answer

A)  the stock market. 
B)  supply and demand. 
C)  employment. 
D)  government spending. 
E)  interest rates 
A)  the stock market. 
B)  supply and demand. 
C)  employment. 
D)  government spending. 
E)  interest rates

Question 7

As Jeanne Taillefer plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.

Accepted Answer

A)  intermediate 
B)  short term 
C)  long-term 
D)  intangible 
E)  durable 
A)  intermediate 
B)  short term 
C)  long-term 
D)  intangible 
E)  durable

Question 8

Assume the following future values will be received at the end of each year. What is the interest rate if the future value of these amounts at the end of year 3 is equal to $2,006? Yr. 1 = $400; Yr. 2 = $500; Yr. 3 = $1,000

Accepted Answer

A)  6.5% 
B)  6.8% 
C)  7.0% 
D)  8.0% 
E)  8.9% 
A)  6.5% 
B)  6.8% 
C)  7.0% 
D)  8.0% 
E)  8.9%

Question 9

Opportunity costs refer to time, money, and other resources that are given up when a decision is made.

Accepted Answer

A) True 
 B)False

Question 10

Samara Banks, 35, has set a goal of having $1,500,000 by the time she retires in 30 years. She plans to achieve this by saving $5,500 per year, which she will invest in term deposits at the end of each year. The term deposits are expected to generate an average return of 10% for the next 30 years. Will she achieve her goal? (show calculations) If not, what can she do in order to reach her goal? List all the possible alternatives of action.

Accepted Answer

No, she will not achieve her goal. 5,500

Question 11

Gross domestic product (GDP) can be described as the difference between a country's exports and its imports.

Accepted Answer

A) True 
 B)False

Question 12

If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years?

Accepted Answer

A)  future value of a single amount 
B)  simple interest 
C)  present value of a single amount 
D)  present value of a series of deposits 
E)  future value of a series of deposits 
A)  future value of a single amount 
B)  simple interest 
C)  present value of a single amount 
D)  present value of a series of deposits 
E)  future value of a series of deposits

Question 13

How do interest rates influence financial planning?

Accepted Answer

Higher interest rates make buy

Question 14

The financial planning process concludes with efforts to:

Accepted Answer

A)  develop financial goals. 
B)  create a financial plan of action. 
C)  analyze your current personal and financial situation. 
D)  implement the financial plan. 
E)  revaluate and revise your actions. 
A)  develop financial goals. 
B)  create a financial plan of action. 
C)  analyze your current personal and financial situation. 
D)  implement the financial plan. 
E)  revaluate and revise your actions.

Question 15

A risk premium associated with interest rates refers to:

Accepted Answer

A)  higher earnings due to uncertainty. 
B)  lower consumer prices. 
C)  the opportunity cost of borrowing 
D)  a loan with a short maturity. 
E)  expected lower inflation. 
A)  higher earnings due to uncertainty. 
B)  lower consumer prices. 
C)  the opportunity cost of borrowing 
D)  a loan with a short maturity. 
E)  expected lower inflation.

Question 16

Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to:

Accepted Answer

A)  Inflation risk 
B)  Interest rate risk 
C)  Income risk 
D)  Personal risk 
E)  Liquidity risk 
A)  Inflation risk 
B)  Interest rate risk 
C)  Income risk 
D)  Personal risk 
E)  Liquidity risk

Question 17

Your goal is to pay down your student loan in 3 years. The balance today is $9,434. If you are charged a rate of 4%, compounded monthly, what will be your monthly, end-of-period payment?

Accepted Answer

A)  $262 
B)  $406 
C)  $279 
D)  $377 
E)  $300 
A)  $262 
B)  $406 
C)  $279 
D)  $377 
E)  $300

Question 18

Anne has a goal of "saving some money month for vacation next summer." Anne's goal lacks

Accepted Answer

A)  measurable terms. 
B)  a realistic perspective. 
C)  specific actions. 
D)  a tangible end. 
E)  a time frame. 
A)  measurable terms. 
B)  a realistic perspective. 
C)  specific actions. 
D)  a tangible end. 
E)  a time frame.

Question 19

The first step of the financial planning process is to

Accepted Answer

A)  develop financial goals. 
B)  implement the financial plan. 
C)  determine your current personal and 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)  determine your current personal and financial situation. 
D)  evaluate and revise your actions. 
E)  create a financial plan of action.

Question 20

What is the future value of $20,000 received in 10 years if it is invested at 6% compounded annually for the next six years and 5%, compounded semi-annually for the remaining four years?

Accepted Answer

A)  $25,000 
B)  $31,000 
C)  $32,772 
D)  $34,567 
E)  $38,817 
A)  $25,000 
B)  $31,000 
C)  $32,772 
D)  $34,567 
E)  $38,817

____________ goals relate to personal relationships, health, and education.

Household size is a major influence on personal financial planning decisions.

Liquidity refers to

Which type of computation would a person use to determine current value of a desired amount for the future?

An individual invests $10,000 at a rate of 5% per annum. What will be its value in 10 years' time?

The main economic influence that determines prices is:

As Jeanne Taillefer plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.

Assume the following future values will be received at the end of each year. What is the interest rate if the future value of these amounts at the end of year 3 is equal to $2,006? Yr. 1 = $400; Yr. 2 = $500; Yr. 3 = $1,000

Opportunity costs refer to time, money, and other resources that are given up when a decision is made.

Gross domestic product (GDP) can be described as the difference between a country's exports and its imports.

If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years?

How do interest rates influence financial planning?

The financial planning process concludes with efforts to:

A risk premium associated with interest rates refers to:

Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to:

Your goal is to pay down your student loan in 3 years. The balance today is $9,434. If you are charged a rate of 4%, compounded monthly, what will be your monthly, end-of-period payment?

Anne has a goal of "saving some money month for vacation next summer." Anne's goal lacks

The first step of the financial planning process is to

What is the future value of $20,000 received in 10 years if it is invested at 6% compounded annually for the next six years and 5%, compounded semi-annually for the remaining four years?

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 1: Personal Financial Planning: An Introduction

____________ goals relate to personal relationships, health, and education.

Household size is a major influence on personal financial planning decisions.

Liquidity refers to

Which type of computation would a person use to determine current value of a desired amount for the future?

An individual invests $10,000 at a rate of 5% per annum. What will be its value in 10 years' time?

The main economic influence that determines prices is:

As Jeanne Taillefer plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.

Assume the following future values will be received at the end of each year. What is the interest rate if the future value of these amounts at the end of year 3 is equal to $2,006? Yr. 1 = $400; Yr. 2 = $500; Yr. 3 = $1,000

Opportunity costs refer to time, money, and other resources that are given up when a decision is made.

Gross domestic product (GDP) can be described as the difference between a country's exports and its imports.

If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years?

How do interest rates influence financial planning?

The financial planning process concludes with efforts to:

A risk premium associated with interest rates refers to:

Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to:

Your goal is to pay down your student loan in 3 years. The balance today is $9,434. If you are charged a rate of 4%, compounded monthly, what will be your monthly, end-of-period payment?

Anne has a goal of "saving some money month for vacation next summer." Anne's goal lacks

The first step of the financial planning process is to

What is the future value of $20,000 received in 10 years if it is invested at 6% compounded annually for the next six years and 5%, compounded semi-annually for the remaining four years?

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters