Question 1

Which of the following is a credit management decision?

Accepted Answer

A)  Purchasing a used car with cash 
B)  Investing your savings in the stock market 
C)  Obtaining a student loan to attend college 
D)  Putting money into your retirement account 
A)  Purchasing a used car with cash 
B)  Investing your savings in the stock market 
C)  Obtaining a student loan to attend college 
D)  Putting money into your retirement account

Question 2

Goals with a time frame of between one and five years are classified as

Accepted Answer

A)  short-term. 
B)  long-term. 
C)  intermediate. 
D)  unrealistic. 
A)  short-term. 
B)  long-term. 
C)  intermediate. 
D)  unrealistic.

Question 3

A budget does not

Accepted Answer

A)  require thinking and planning. 
B)  require an evaluation of your current financial position. 
C)  help you account for all your income and expenses. 
D)  require the preparation of a will. 
A)  require thinking and planning. 
B)  require an evaluation of your current financial position. 
C)  help you account for all your income and expenses. 
D)  require the preparation of a will.

Question 4

The act of determining how wealth will be distributed before or upon death is

Accepted Answer

A)  estate planning. 
B)  retirement planning. 
C)  not needed for most people. 
D)  liquidity planning. 
A)  estate planning. 
B)  retirement planning. 
C)  not needed for most people. 
D)  liquidity planning.

Question 5

Which of the following is not a reason to set realistic financial goals?

Accepted Answer

A)  So you have something to refer to every time you get paid 
B)  So you have a high likelihood of achieving them 
C)  If the goal is too onerous you will be unwilling to follow the plan 
D)  If you fail you will be discouraged and lose interest in planning 
A)  So you have something to refer to every time you get paid 
B)  So you have a high likelihood of achieving them 
C)  If the goal is too onerous you will be unwilling to follow the plan 
D)  If you fail you will be discouraged and lose interest in planning

Question 6

Match the goals in the first column with the items in the second column:
1.short-term goal (a)To retire in 25 years
2.intermediate goal (b)To purchase a home in three years
3.long-term goal (c)To save enough money for books and tuition for next term

Accepted Answer

The answer of Match the goals in the first column...

Question 7

________ is the uncertainty surrounding the potential return on an investment.

Accepted Answer

The answer of ________ is the uncertainty surrounding the potential...

Question 8

Use the following two columns of items to answer the matching questions below:
-risk

Accepted Answer

A) determining how your wealth will be distributed before or upon your death 
B) what you owe 
C) forecasting future expenses and savings 
D) source of current information about a variety of topics 
E) value of what you on minus what you owe
F)determining how much money you should set aside for retirement
G)access to funds to cover any short-term cash deficiencies
H)uncertainty on a potential return on an investment
I)decisions regarding how much money to hold in liquid form and how to allocate funds among short term investments
J)what you own 
A) determining how your wealth will be distributed before or upon your death 
B) what you owe 
C) forecasting future expenses and savings 
D) source of current information about a variety of topics 
E) value of what you on minus what you owe
F)determining how much money you should set aside for retirement
G)access to funds to cover any short-term cash deficiencies
H)uncertainty on a potential return on an investment
I)decisions regarding how much money to hold in liquid form and how to allocate funds among short term investments
J)what you own

Question 9

Which of the following is not a financing decision?

Accepted Answer

A)  Should you buy Apple stock with savings 
B)  Should you lease a car 
C)  Should you take a loan and buy a car 
D)  Should you take a 15 or 30 year mortgage to buy a house 
A)  Should you buy Apple stock with savings 
B)  Should you lease a car 
C)  Should you take a loan and buy a car 
D)  Should you take a 15 or 30 year mortgage to buy a house

Question 10

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

Accepted Answer

A)  Educating yourself on various financial products 
B)  Asking questions of other clients 
C)  Relying on the adviser as to when to buy and sell 
D)  Knowing your risk tolerance 
A)  Educating yourself on various financial products 
B)  Asking questions of other clients 
C)  Relying on the adviser as to when to buy and sell 
D)  Knowing your risk tolerance

Question 11

"Big savers" focus their budget 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 12

Why is it important to understand how taxes impact your personal financial planning?

Accepted Answer

A)  Taxes paid reduce your net income and cash flow available to save as well as the returns on your investments. 
B)  Not paying taxes can result in penalties and jail time. 
C)  It is not that important since savings are not taxable. 
D)  It is only important if you are in a 25%+ tax bracket. 
A)  Taxes paid reduce your net income and cash flow available to save as well as the returns on your investments. 
B)  Not paying taxes can result in penalties and jail time. 
C)  It is not that important since savings are not taxable. 
D)  It is only important if you are in a 25%+ tax bracket.

Question 13

If you are interested in achieving a long-term savings goal,then

Accepted Answer

A)  you are not concerned with paying off your current debt. 
B)  you will try to save a small amount because that is better than saving nothing at all. 
C)  you will buy a new car because your best friend just bought one. 
D)  you believe that 'retail therapy' is the answer to your occasional depression. 
A)  you are not concerned with paying off your current debt. 
B)  you will try to save a small amount because that is better than saving nothing at all. 
C)  you will buy a new car because your best friend just bought one. 
D)  you believe that 'retail therapy' is the answer to your occasional depression.

Question 14

Which of these statements is true with regards to the 2008-2009 financial crisis?

Accepted Answer

A)  More than half of the people in the United States lost their jobs. 
B)  The values of many homes were cut in half or more. 
C)  The values of most investments declined by no more than 10%. 
D)  Having a financial plan is of no help when economic conditions are as weak as they were during the crisis. 
A)  More than half of the people in the United States lost their jobs. 
B)  The values of many homes were cut in half or more. 
C)  The values of most investments declined by no more than 10%. 
D)  Having a financial plan is of no help when economic conditions are as weak as they were during the crisis.

Question 15

The income in your budget is not affected by

Accepted Answer

A)  your education. 
B)  your career decisions. 
C)  the tax laws. 
D)  the standard of living you experienced as a child. 
A)  your education. 
B)  your career decisions. 
C)  the tax laws. 
D)  the standard of living you experienced as a child.

Question 16

If you set realistic goals rather than unrealistic ones,your plan becomes a more useful one.

Accepted Answer

A) True 
 B)False

Question 17

"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 18

Most investments are subject to ________,which is the uncertainty surrounding their potential return.

Accepted Answer

The answer of Most investments are subject to ________,which is...

Question 19

________ management involves decisions regarding how much credit you need to support spending and which sources of credit to use.

Accepted Answer

A)  Investment 
B)  Money 
C)  Credit 
D)  Liquidity 
A)  Investment 
B)  Money 
C)  Credit 
D)  Liquidity

Question 20

The simple objective of financial planning is to make the best use of your resources to achieve your financial goals.

Accepted Answer

A) True 
 B)False

Exam 1: Overview of a Financial Plan

Which of the following is a credit management decision?

Goals with a time frame of between one and five years are classified as

A budget does not

The act of determining how wealth will be distributed before or upon death is

Which of the following is not a reason to set realistic financial goals?

Match the goals in the first column with the items in the second column: 1.short-term goal (a)To retire in 25 years 2.intermediate goal (b)To purchase a home in three years 3.long-term goal (c)To save enough money for books and tuition for next term

________ is the uncertainty surrounding the potential return on an investment.

Use the following two columns of items to answer the matching questions below: -risk

Which of the following is not a financing decision?

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

"Big savers" focus their budget decisions on

Why is it important to understand how taxes impact your personal financial planning?

If you are interested in achieving a long-term savings goal,then

Which of these statements is true with regards to the 2008-2009 financial crisis?

The income in your budget is not affected by

If you set realistic goals rather than unrealistic ones,your plan becomes a more useful one.

"Big spenders" focus their budgeting decisions on

Most investments are subject to ________,which is the uncertainty surrounding their potential return.

________ management involves decisions regarding how much credit you need to support spending and which sources of credit to use.

The simple objective of financial planning is to make the best use of your resources to achieve your financial 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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