Question 1

Which of the following could save a smaller proportion of their earnings to achieve the same level of wealth?

Accepted Answer

A) Social worker 
B) School teacher 
C) Medical doctor 
D) All would save the same percentage of earnings to reach the same level of wealth 
A) Social worker 
B) School teacher 
C) Medical doctor 
D) All would save the same percentage of earnings to reach the same level of wealth

Question 2

Which of the following Web sites should you question the accuracy of the information provided?

Accepted Answer

A) Current tax rates and rules used for tax planning on the IRS Web site 
B) Investment performance on the SEC Web site 
C) New retirement plan rules used for retirement planning on a major bank's Web site 
D) A list of stocks you should buy that were mentioned on a free chat room 
A) Current tax rates and rules used for tax planning on the IRS Web site 
B) Investment performance on the SEC Web site 
C) New retirement plan rules used for retirement planning on a major bank's Web site 
D) A list of stocks you should buy that were mentioned on a free chat room

Question 3

A plan for ________ is needed to determine how much you could afford to borrow,the length of the loan,and to select a loan that charges competitive interest rates.

Accepted Answer

A) buying 
B) financing 
C) spending 
D) saving 
A) buying 
B) financing 
C) spending 
D) saving

Question 4

From a financial standpoint when should a person start retirement planning and saving?

Accepted Answer

A) When he or she first starts receiving a salary 
B) At 45-50 years of age 
C) At 50-55 years of age 
D) At 55-60 years of age 
A) When he or she first starts receiving a salary 
B) At 45-50 years of age 
C) At 50-55 years of age 
D) At 55-60 years of age

Question 5

In the United States many people

Accepted Answer

A) save about 50% of income earned. 
B) save about 25% of income earned. 
C) save about 1% of income earned. 
D) have no savings. 
A) save about 50% of income earned. 
B) save about 25% of income earned. 
C) save about 1% of income earned. 
D) have no savings.

Question 6

Your budget is influenced by your income,which in turn is influenced by your education and career decisions.

Accepted Answer

A) True 
 B)False

Question 7

Most Americans will never be able to understand and develop a personal financial plan.

Accepted Answer

A) True 
 B)False

Question 8

The best measure of a person's or family's net wealth is

Accepted Answer

A) the highest level of education received. 
B) the amount of annual income. 
C) the value of what you own minus the value of what you owe. 
D) their tax bracket. 
A) the highest level of education received. 
B) the amount of annual income. 
C) the value of what you own minus the value of what you owe. 
D) their tax bracket.

Question 9

One of the considerations in determining your investment choices is evaluating the level of risk you are willing to take.

Accepted Answer

A) True 
 B)False

Question 10

Personal finance does not include the process of planning your

Accepted Answer

A) spending. 
B) financing. 
C) investing. 
D) spirituality. 
A) spending. 
B) financing. 
C) investing. 
D) spirituality.

Question 11

If you do not have access to money to cover cash needs,you may have insufficient liquidity.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a step in developing a financial plan?

Accepted Answer

A) Establish your financial goals 
B) Consider your current financial position 
C) Identify and evaluate alternative plans that could achieve your goals 
D) Put your plan away for six months to a year and then review it for accuracy 
A) Establish your financial goals 
B) Consider your current financial position 
C) Identify and evaluate alternative plans that could achieve your goals 
D) Put your plan away for six months to a year and then review it for accuracy

Question 13

Which of the following statements is not true regarding education and financial position?

Accepted Answer

A) Your financial position is highly influenced by the amount of education you pursue 
B) Higher education always guarantees a higher income 
C) The more education you have,the higher your earnings will likely be 
D) Before you choose a major,you should consider your skills,interests,and the career paths that will be available to you 
A) Your financial position is highly influenced by the amount of education you pursue 
B) Higher education always guarantees a higher income 
C) The more education you have,the higher your earnings will likely be 
D) Before you choose a major,you should consider your skills,interests,and the career paths that will be available to you

Question 14

Which of the following would not be considered a very good investment?

Accepted Answer

A) A new television set 
B) An art collection 
C) A savings account 
D) A mutual fund of stocks and bonds 
A) A new television set 
B) An art collection 
C) A savings account 
D) A mutual fund of stocks and bonds

Question 15

Which of the following would not help protect you from unethical or incompetent advice from a financial adviser?

Accepted Answer

A) Educate yourself on various financial products 
B) Ask questions of other clients 
C) Rely on the adviser as to when to buy and sell 
D) Know your risk tolerance 
A) Educate yourself on various financial products 
B) Ask questions of other clients 
C) Rely on the adviser as to when to buy and sell 
D) Know your risk tolerance

Question 16

Money management decisions include deciding how much credit to obtain to support your spending and what sources of credit to use.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following would be a long-term goal?

Accepted Answer

A) Paying off a school loan in three years 
B) Purchasing a car within six months 
C) Saving enough money to retire in 20 years 
D) Paying for two years of college 
A) Paying off a school loan in three years 
B) Purchasing a car within six months 
C) Saving enough money to retire in 20 years 
D) Paying for two years of college

Question 18

"Big spenders" focus their budgeting decisions on

Accepted Answer

A) reducing expenses. 
B) increasing income. 
C) spending most of their income. 
D) saving most of their income. 
A) reducing expenses. 
B) increasing income. 
C) spending most of their income. 
D) saving most of their income.

Question 19

Determining how much money you should set aside for retirement and how those funds should be invested should not be of concern for people until they near their retirement age.

Accepted Answer

A) True 
 B)False

Question 20

Goals with a time frame five or more years into the future are called intermediate-term goals.

Accepted Answer

A) True 
 B)False

Exam 1: Overview of a Financial Plan

Which of the following could save a smaller proportion of their earnings to achieve the same level of wealth?

Which of the following Web sites should you question the accuracy of the information provided?

A plan for ________ is needed to determine how much you could afford to borrow,the length of the loan,and to select a loan that charges competitive interest rates.

From a financial standpoint when should a person start retirement planning and saving?

In the United States many people

Your budget is influenced by your income,which in turn is influenced by your education and career decisions.

Most Americans will never be able to understand and develop a personal financial plan.

The best measure of a person's or family's net wealth is

One of the considerations in determining your investment choices is evaluating the level of risk you are willing to take.

Personal finance does not include the process of planning your

If you do not have access to money to cover cash needs,you may have insufficient liquidity.

Which of the following is not a step in developing a financial plan?

Which of the following statements is not true regarding education and financial position?

Which of the following would not be considered a very good investment?

Which of the following would not help protect you from unethical or incompetent advice from a financial adviser?

Money management decisions include deciding how much credit to obtain to support your spending and what sources of credit to use.

Which of the following would be a long-term goal?

"Big spenders" focus their budgeting decisions on

Determining how much money you should set aside for retirement and how those funds should be invested should not be of concern for people until they near their retirement age.

Goals with a time frame five or more years into the future are called intermediate-term goals.

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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