Question 1

Income of $2760 monthly with expenditures of $2880 monthly will result in a negative cash flow of $120.

Accepted Answer

A) True 
 B)False

Question 2

All of the following affect cash outflows except

Accepted Answer

A) the size of the family. 
B) your age. 
C) your education level. 
D) your personal consumption behaviour. 
A) the size of the family. 
B) your age. 
C) your education level. 
D) your personal consumption behaviour.

Question 3

During the final stage in the life cycle,retirement,people generally experience higher incomes.

Accepted Answer

A) True 
 B)False

Question 4

Raymond has a $5000 bank loan due in nine months,$3000 in credit card liabilities due in 1.5 months,and another $4000 loan due in 1.5 years.In this case,Raymond has total long-term liabilities of $4000.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following usually affects cash inflows the most?

Accepted Answer

A) The education and income of your parents 
B) Your job skills 
C) Your personal consumption behaviour 
D) The size of your family 
A) The education and income of your parents 
B) Your job skills 
C) Your personal consumption behaviour 
D) The size of your family

Question 6

George has a very low debt to asset ratio because he has paid off his mortgage on his house and has very little other debt.Recently,he quit his high-stress job and has taken a much more enjoyable lower-paying position.Consequently,he also now has a low liquidity ratio.He used up all of his emergency fund while looking for the new job and he is having difficulty continuing to save for his retirement.Comment on his situation and make suggestions to help him with his retirement budgeting.

Accepted Answer

George is asset rich but cash flow poor

Question 7

Stocks are considered a short-term liquid investment.

Accepted Answer

A) True 
 B)False

Question 8

Long-term liabilities are debts that will be paid off at least three years into the future.

Accepted Answer

A) True 
 B)False

Question 9

If your debt-to-asset ratio is less than 1,which of the following will improve it?

Accepted Answer

A) Taking out a line of credit 
B) Buying a car with cash 
C) Paying off a student loan 
D) Buying stock with cash 
A) Taking out a line of credit 
B) Buying a car with cash 
C) Paying off a student loan 
D) Buying stock with cash

Question 10

Which of the following would increase your liquid assets?

Accepted Answer

A) Paying off a loan 
B) Depositing funds to a savings account 
C) Buying rental property 
D) Contributing to an RRSP 
A) Paying off a loan 
B) Depositing funds to a savings account 
C) Buying rental property 
D) Contributing to an RRSP

Question 11

A high debt-to-asset ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Accepted Answer

A) True 
 B)False

Question 12

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

Accepted Answer

A) True 
 B)False

Question 13

A major Chapter of the budgeting process to ensure overall financial success is

Accepted Answer

A) reducing credit limits on credit cards. 
B) limiting entertainment expenses. 
C) establishing an emergency fund. 
D) planning an overdraft for your chequing account. 
A) reducing credit limits on credit cards. 
B) limiting entertainment expenses. 
C) establishing an emergency fund. 
D) planning an overdraft for your chequing account.

Question 14

Raymond feels that he is wealthy because he has $10000 cash in the bank,two expensive cars worth about $100000 ,and a house worth $1 million.However,he also carries a $25000 credit card liability and has a $40000 bank loan due within six months.What financial problem does Raymond have?

Accepted Answer

A) Fixed assets are too high. 
B) Total net worth is too low. 
C) Current ratio is too low. 
D) Liquidity ratio is too low. 
A) Fixed assets are too high. 
B) Total net worth is too low. 
C) Current ratio is too low. 
D) Liquidity ratio is too low.

Question 15

Bills that are to be paid off within a year are called

Accepted Answer

A) short-term liabilities. 
B) one-year liabilities. 
C) current liabilities. 
D) insignificant bills. 
A) short-term liabilities. 
B) one-year liabilities. 
C) current liabilities. 
D) insignificant bills.

Question 16

If your budget forecasts a future shortfall in cash flow,the best way to use your budget is to

Accepted Answer

A) eliminate all entertainment expenses for that period. 
B) build an emergency fund to prepare for the shortfall. 
C) increase cash flows from all sources. 
D) obtain credit in advance of the predicted shortfall. 
A) eliminate all entertainment expenses for that period. 
B) build an emergency fund to prepare for the shortfall. 
C) increase cash flows from all sources. 
D) obtain credit in advance of the predicted shortfall.

Question 17

Mary earns $3500 per month.After payroll deductions from the government,Mary takes home 85 percent of her salary.Mary wants to use a pay yourself first method and puts $330 into her savings account before spending anything and pays $200 towards her student loans.What is Mary's saving rate?

Accepted Answer

A) 9)4 percent 
B) 11.1 percent 
C) 15.1 percent 
D) 17.8 percent 
A) 9)4 percent 
B) 11.1 percent 
C) 15.1 percent 
D) 17.8 percent

Question 18

If you do not budget for unexpected expenses,you will likely experience

Accepted Answer

A) cash shortages. 
B) an increase in your emergency fund. 
C) an increase in assets. 
D) chronic stress-related issues. 
A) cash shortages. 
B) an increase in your emergency fund. 
C) an increase in assets. 
D) chronic stress-related issues.

Question 19

Jeff has a $1000 salary and $100 dividend income this month.This month Jeff has rent and utilities of $600 and he spent $200 on groceries and $100 on clothing.What is his net cash flow this month?

Accepted Answer

A) $500 
B) $100 
C) $200 
D) $1100 
A) $500 
B) $100 
C) $200 
D) $1100

Question 20

If both a husband and a wife are employed full time,their consumption behaviour

Accepted Answer

A) is usually higher. 
B) tends to decrease. 
C) will decrease as they age. 
D) is similar to all mid earning life stage people. 
A) is usually higher. 
B) tends to decrease. 
C) will decrease as they age. 
D) is similar to all mid earning life stage people.

Income of $2760 monthly with expenditures of $2880 monthly will result in a negative cash flow of $120.

All of the following affect cash outflows except

During the final stage in the life cycle,retirement,people generally experience higher incomes.

Raymond has a $5000 bank loan due in nine months,$3000 in credit card liabilities due in 1.5 months,and another $4000 loan due in 1.5 years.In this case,Raymond has total long-term liabilities of $4000.

Which of the following usually affects cash inflows the most?

Stocks are considered a short-term liquid investment.

Long-term liabilities are debts that will be paid off at least three years into the future.

If your debt-to-asset ratio is less than 1,which of the following will improve it?

Which of the following would increase your liquid assets?

A high debt-to-asset ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

A major Chapter of the budgeting process to ensure overall financial success is

Raymond feels that he is wealthy because he has $10000 cash in the bank,two expensive cars worth about $100000 ,and a house worth $1 million.However,he also carries a $25000 credit card liability and has a $40000 bank loan due within six months.What financial problem does Raymond have?

Bills that are to be paid off within a year are called

If your budget forecasts a future shortfall in cash flow,the best way to use your budget is to

Mary earns $3500 per month.After payroll deductions from the government,Mary takes home 85 percent of her salary.Mary wants to use a pay yourself first method and puts $330 into her savings account before spending anything and pays $200 towards her student loans.What is Mary's saving rate?

If you do not budget for unexpected expenses,you will likely experience

Jeff has a $1000 salary and $100 dividend income this month.This month Jeff has rent and utilities of $600 and he spent $200 on groceries and $100 on clothing.What is his net cash flow this month?

If both a husband and a wife are employed full time,their consumption behaviour

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 1: Tools for Financial Planning - Planning with Personal Financial Statements

Income of $2760 monthly with expenditures of $2880 monthly will result in a negative cash flow of $120.

All of the following affect cash outflows except

During the final stage in the life cycle,retirement,people generally experience higher incomes.

Raymond has a $5000 bank loan due in nine months,$3000 in credit card liabilities due in 1.5 months,and another $4000 loan due in 1.5 years.In this case,Raymond has total long-term liabilities of $4000.

Which of the following usually affects cash inflows the most?

Stocks are considered a short-term liquid investment.

Long-term liabilities are debts that will be paid off at least three years into the future.

If your debt-to-asset ratio is less than 1,which of the following will improve it?

Which of the following would increase your liquid assets?

A high debt-to-asset ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

A major Chapter of the budgeting process to ensure overall financial success is

Raymond feels that he is wealthy because he has $10000 cash in the bank,two expensive cars worth about $100000 ,and a house worth $1 million.However,he also carries a $25000 credit card liability and has a $40000 bank loan due within six months.What financial problem does Raymond have?

Bills that are to be paid off within a year are called

If your budget forecasts a future shortfall in cash flow,the best way to use your budget is to

Mary earns $3500 per month.After payroll deductions from the government,Mary takes home 85 percent of her salary.Mary wants to use a pay yourself first method and puts $330 into her savings account before spending anything and pays $200 towards her student loans.What is Mary's saving rate?

If you do not budget for unexpected expenses,you will likely experience

Jeff has a $1000 salary and $100 dividend income this month.This month Jeff has rent and utilities of $600 and he spent $200 on groceries and $100 on clothing.What is his net cash flow this month?

If both a husband and a wife are employed full time,their consumption behaviour

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters