Question 1

You need to review your progress and reevaluate and revise your plan (Step 5)because

Accepted Answer

A) your financial needs change over the course of your life. 
B) your employment situation changes over time. 
C) your net worth changes over time. 
D) your family situation might change over time. 
E) all of the above are good reasons to periodically review your financial plan. 
A) your financial needs change over the course of your life. 
B) your employment situation changes over time. 
C) your net worth changes over time. 
D) your family situation might change over time. 
E) all of the above are good reasons to periodically review your financial plan.

Question 2

It is important to take a close look at the 2008 economic downturn as a means to highlight how vulnerable American's finances are.

Accepted Answer

A) True 
 B)False

Question 3

When you are involved in ________ planning,you are planning for your eventual death and the distribution of your wealth to your heirs.

Accepted Answer

A) prenatal 
B) beneficiary 
C) estate 
D) actuarial 
E) none of the above 
A) prenatal 
B) beneficiary 
C) estate 
D) actuarial 
E) none of the above

Question 4

In the typical consumer's financial life cycle,one difference between stage 2 and stage 3 is that in stage 3 you will earn more than you spend,whereas in stage 2 you will spend more than you earn.

Accepted Answer

A) True 
 B)False

Question 5

What is the relationship between earnings,education,and standard of living?

Accepted Answer

There is a direct relationship between e

Question 6

What is the main factor in determining your potential income level?

Accepted Answer

A) Education and skills that you have attained 
B) Who you know in your company administration 
C) Your age and years of employment 
D) The size of the company you work for 
A) Education and skills that you have attained 
B) Who you know in your company administration 
C) Your age and years of employment 
D) The size of the company you work for

Question 7

What should you do with your goals on a frequent basis throughout your lifetime?

Accepted Answer

A) Prioritize them 
B) Modify them 
C) Put them in writing 
D) All of the above 
A) Prioritize them 
B) Modify them 
C) Put them in writing 
D) All of the above

Question 8

In Chapter 1,Principle 3 espouses the time value of money.Why is this principle so important to financial planning?

Accepted Answer

A) The principle allows us to determine how much money we will need to achieve our future goals. 
B) The principle shows us how inflation impacts our money over time. 
C) The principle helps us determine our savings needs today,in order to meet our future retirement goals. 
D) The principle shows us how important time and interest rates are to the accumulation of wealth. 
E) All of the above. 
A) The principle allows us to determine how much money we will need to achieve our future goals. 
B) The principle shows us how inflation impacts our money over time. 
C) The principle helps us determine our savings needs today,in order to meet our future retirement goals. 
D) The principle shows us how important time and interest rates are to the accumulation of wealth. 
E) All of the above.

Question 9

What is one difference between stage 2 in the Financial Life Cycle and stage 3 in the Financial Life Cycle?

Accepted Answer

During stage 2,you will earn m

Question 10

While each person's financial plan is different,some common factors guide all sound financial plans.Which of the following is one of the common factors?

Accepted Answer

A) Sustainability 
B) Illiquidity 
C) Protection 
D) Maximization of taxes 
A) Sustainability 
B) Illiquidity 
C) Protection 
D) Maximization of taxes

Question 11

The concept that emphasizes that people should not put all their eggs in one basket is

Accepted Answer

A) the time dimension of investing. 
B) the curse of competitive investment markets. 
C) diversification reduces risk. 
D) the farmers analogy. 
E) liquidity is first. 
A) the time dimension of investing. 
B) the curse of competitive investment markets. 
C) diversification reduces risk. 
D) the farmers analogy. 
E) liquidity is first.

Question 12

The most important aspect of choosing a career is the amount of income that career will generate over your lifetime.

Accepted Answer

A) True 
 B)False

Question 13

Step 3 of the personal financial planning process is "Develop a Plan of Action." According to your text,which of the following is not one of the "common concerns" that should guide all financial plans?

Accepted Answer

A) Flexibility 
B) Long-term profitability 
C) Liquidity 
D) Protection 
E) Minimization of taxes 
A) Flexibility 
B) Long-term profitability 
C) Liquidity 
D) Protection 
E) Minimization of taxes

Question 14

According to a recent Rockefeller Foundation report,the financial issue Americans worry about the most is the ability to pay

Accepted Answer

A) for medical expenses. 
B) for retirement expenses. 
C) debt expenses. 
D) home mortgage expenses. 
A) for medical expenses. 
B) for retirement expenses. 
C) debt expenses. 
D) home mortgage expenses.

Question 15

On his goals worksheet,James has written down his short-term goals for the next year.He has prioritized his goals and determined a feasible due date by which he wants to achieve his goals.According to the textbook,the final step James needs to complete in the goals process is to

Accepted Answer

A) determine an appropriate cost for each of his listed goals. 
B) post his goals worksheet on his refrigerator so that he can see it every day. 
C) contact his financial advisor for approval of his goals. 
D) email himself a copy of the goals worksheet in case he loses the paper copy. 
A) determine an appropriate cost for each of his listed goals. 
B) post his goals worksheet on his refrigerator so that he can see it every day. 
C) contact his financial advisor for approval of his goals. 
D) email himself a copy of the goals worksheet in case he loses the paper copy.

Question 16

Which stage in the Financial Life Cycle is the longest in terms of years?

Accepted Answer

A) Stage 1: wealth accumulation 
B) Stage 2: the golden years 
C) Stage 3: the retirement years 
D) Stage 4: the formative years 
A) Stage 1: wealth accumulation 
B) Stage 2: the golden years 
C) Stage 3: the retirement years 
D) Stage 4: the formative years

Question 17

According to a recruiting survey,the most common mistake made by job interviewees is talking too much.

Accepted Answer

A) True 
 B)False

Question 18

Most individuals will reach their financial goals without planning or budgeting.

Accepted Answer

A) True 
 B)False

Question 19

The principle that considers the importance of insurance is the ________ principle.

Accepted Answer

A) agency problem - beware the sales pitch 
B) all risk is not equal 
C) time value of money 
D) protect yourself against major catastrophes 
E) none of the above 
A) agency problem - beware the sales pitch 
B) all risk is not equal 
C) time value of money 
D) protect yourself against major catastrophes 
E) none of the above

Question 20

In 2008,the Bear Stearns Company collapsed could not be saved and was sold to JP Morgan Chase for $10 per share,a price far below its pre-crisis 52-week high of $133.20 per share.Prior to the collapse,many of the company's employees had all of their retirement money invested only in Bear Stearns common stock.This was a very risky financial strategy for just such a reason: What if the company dissolves? What financial principle from Chapter 1 did they need to understand better?

Accepted Answer

A) Risk and return go hand in hand. 
B) Nothing happens without a plan. 
C) The time value of money 
D) Stuff happens,the importance of liquidity. 
A) Risk and return go hand in hand. 
B) Nothing happens without a plan. 
C) The time value of money 
D) Stuff happens,the importance of liquidity.

You need to review your progress and reevaluate and revise your plan (Step 5)because

It is important to take a close look at the 2008 economic downturn as a means to highlight how vulnerable American's finances are.

When you are involved in ________ planning,you are planning for your eventual death and the distribution of your wealth to your heirs.

In the typical consumer's financial life cycle,one difference between stage 2 and stage 3 is that in stage 3 you will earn more than you spend,whereas in stage 2 you will spend more than you earn.

What is the relationship between earnings,education,and standard of living?

What is the main factor in determining your potential income level?

What should you do with your goals on a frequent basis throughout your lifetime?

In Chapter 1,Principle 3 espouses the time value of money.Why is this principle so important to financial planning?

What is one difference between stage 2 in the Financial Life Cycle and stage 3 in the Financial Life Cycle?

While each person's financial plan is different,some common factors guide all sound financial plans.Which of the following is one of the common factors?

The concept that emphasizes that people should not put all their eggs in one basket is

The most important aspect of choosing a career is the amount of income that career will generate over your lifetime.

Step 3 of the personal financial planning process is "Develop a Plan of Action." According to your text,which of the following is not one of the "common concerns" that should guide all financial plans?

According to a recent Rockefeller Foundation report,the financial issue Americans worry about the most is the ability to pay

On his goals worksheet,James has written down his short-term goals for the next year.He has prioritized his goals and determined a feasible due date by which he wants to achieve his goals.According to the textbook,the final step James needs to complete in the goals process is to

Which stage in the Financial Life Cycle is the longest in terms of years?

According to a recruiting survey,the most common mistake made by job interviewees is talking too much.

Most individuals will reach their financial goals without planning or budgeting.

The principle that considers the importance of insurance is the ________ principle.

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 1: The Financial Planning Process

You need to review your progress and reevaluate and revise your plan (Step 5)because

It is important to take a close look at the 2008 economic downturn as a means to highlight how vulnerable American's finances are.

When you are involved in ________ planning,you are planning for your eventual death and the distribution of your wealth to your heirs.

In the typical consumer's financial life cycle,one difference between stage 2 and stage 3 is that in stage 3 you will earn more than you spend,whereas in stage 2 you will spend more than you earn.

What is the relationship between earnings,education,and standard of living?

What is the main factor in determining your potential income level?

What should you do with your goals on a frequent basis throughout your lifetime?

In Chapter 1,Principle 3 espouses the time value of money.Why is this principle so important to financial planning?

What is one difference between stage 2 in the Financial Life Cycle and stage 3 in the Financial Life Cycle?

While each person's financial plan is different,some common factors guide all sound financial plans.Which of the following is one of the common factors?

The concept that emphasizes that people should not put all their eggs in one basket is

The most important aspect of choosing a career is the amount of income that career will generate over your lifetime.

Step 3 of the personal financial planning process is "Develop a Plan of Action." According to your text,which of the following is not one of the "common concerns" that should guide all financial plans?

According to a recent Rockefeller Foundation report,the financial issue Americans worry about the most is the ability to pay

On his goals worksheet,James has written down his short-term goals for the next year.He has prioritized his goals and determined a feasible due date by which he wants to achieve his goals.According to the textbook,the final step James needs to complete in the goals process is to

Which stage in the Financial Life Cycle is the longest in terms of years?

According to a recruiting survey,the most common mistake made by job interviewees is talking too much.

Most individuals will reach their financial goals without planning or budgeting.

The principle that considers the importance of insurance is the ________ principle.

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters