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)   IntermediateF) A) and C)
G) A) and E)

Question 2

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.5500 × ...

Question 3

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.F) A) and C)
G) B) and C)

Question 4

Which of the following goals would be the easiest to implement and measure its accomplishment?

Accepted Answer

A)   "Reduce our debt payments."
B)   "Save funds for an annual vacation."
C)   "Save $100 a month to create a $4,000 emergency fund."
D)   "Clear credit card debt
E)   "Invest $2,000 a year for retirement."F) B) and D)
G) A) and B)

Question 5

Liquidity is the ability to convert financial resources into usable cash with ease.

Accepted Answer

A) True 
 B)False

Question 6

Increased consumer spending will usually cause:

Accepted Answer

A)   lower consumer prices.
B)   reduced employment levels.
C)   lower tax revenues.
D)   lower interest rates.
E)   higher employment levels.F) All of the above
G) A) and B)

Question 7

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.F) A) and C)
G) None of the above

Question 8

Developing financial goals is the first step in the financial planning process.

Accepted Answer

A) True 
 B)False

Question 9

A major activity in the planning component of financial planning is

Accepted Answer

A)   selecting insurance coverage.
B)   evaluating investment alternatives.
C)   gaining occupational training and experience.
D)   allocating current resources for spending.
E)   establishing a line of credit.F) None of the above
G) All of the above

Question 10

Briefly explain three types of financial and economic risks that tend to affect everyone.

Accepted Answer

Interest rate risk: Changing interest ra...

Question 11

Dani Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home that she owns.Which step in the financial planning process does this situation demonstrate?

Accepted Answer

A)   Determining her current financial situation
B)   Developing her financial goals
C)   Identifying alternative courses of action
D)   Evaluating her alternatives
E)   Implementing her financial planF) C) and D)
G) A) and E)

Question 12

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks

Accepted Answer

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

Question 13

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 depositsF) A) and C)
G) A) and B)

Question 14

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.F) A) and B)
G) A) and E)

Question 15

Increased consumer spending will usually cause:

Accepted Answer

A)   lower consumer prices.
B)   reduced employment levels.
C)   lower tax revenues.
D)   higher employment levels.
E)   lower interest rates.F) B) and C)
G) A) and C)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The present value of a future amount will decrease if ________________. I.the discount rate increases
II) the amount occurs closer in time
III) the compounding frequency increases
IV) inflation increases

Accepted Answer

A)   I and II only
B)   I and III only
C)   II and III only
D)   III and IV only
E)   I,III and IV onlyF) A) and E)
G) All of the above

Question 18

A financial plan is also known and referred to as a budget.

Accepted Answer

A) True 
 B)False

Question 19

People are commonly overwhelmed by the many influences on personal financial decisions.What are the factors affecting financial planning?

Accepted Answer

Personal factors that influence financia...

Question 20

An example of a personal opportunity cost would be:

Accepted Answer

A)   lost wages due to continuing as a full time student
B)   higher earnings on savings that must be kept on deposit a minimum of six months.
C)   time comparing several brands of personal computers
D)   Interest lost by using savings to make a purchase
E)   having to pay a tax penalty due to not having enough withheld from your monthly salary.F) D) and E)
G) B) and E)

Exam 1: Personal Financial Planning in Action

The first step of the financial planning process is to

Correct Answer
verified

A risk premium associated with interest rates refers to:

Correct Answer
verified

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

Correct Answer
verified

A financial plan is also known and referred to as a budget.

Correct Answer
verified

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

Correct Answer
verified

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks

Correct Answer
verified

Increased consumer spending will usually cause:

Correct Answer
verified

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?

Correct Answer
verified

Briefly explain three types of financial and economic risks that tend to affect everyone.

Correct Answer
verified
Interest rate risk: Changing interest ra...
View Answer

Which of the following goals would be the easiest to implement and measure its accomplishment?

Correct Answer
verified

Dani Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home that she owns.Which step in the financial planning process does this situation demonstrate?

Correct Answer
verified

Increased consumer spending will usually cause:

Correct Answer
verified

Liquidity is the ability to convert financial resources into usable cash with ease.

Correct Answer
verified

People are commonly overwhelmed by the many influences on personal financial decisions.What are the factors affecting financial planning?

Correct Answer
verified
Personal factors that influence financia...
View Answer

The financial planning process concludes with efforts to:

Correct Answer
verified

Developing financial goals is the first step in the financial planning process.

Correct Answer
verified

A major activity in the planning component of financial planning is

Correct Answer
verified

Correct Answer
verified
No,she will not achieve her goal.5500 × ...
View Answer

An example of a personal opportunity cost would be:

Correct Answer
verified

The present value of a future amount will decrease if ________________. I.the discount rate increases II) the amount occurs closer in time III) the compounding frequency increases IV) inflation increases

Correct Answer
verified

Exam 1: Personal Financial Planning in Action

The first step of the financial planning process is to

Correct AnswerverifiedShow Answer

A risk premium associated with interest rates refers to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A financial plan is also known and referred to as a budget.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks

Correct AnswerverifiedShow Answer

Increased consumer spending will usually cause:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Briefly explain three types of financial and economic risks that tend to affect everyone.

Correct AnswerverifiedInterest rate risk: Changing interest ra...View AnswerShow Answer

Which of the following goals would be the easiest to implement and measure its accomplishment?

Correct AnswerverifiedShow Answer

Dani Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home that she owns.Which step in the financial planning process does this situation demonstrate?

Correct AnswerverifiedShow Answer

Increased consumer spending will usually cause:

Correct AnswerverifiedShow Answer

Liquidity is the ability to convert financial resources into usable cash with ease.

Correct AnswerverifiedShow Answer

People are commonly overwhelmed by the many influences on personal financial decisions.What are the factors affecting financial planning?

Correct AnswerverifiedPersonal factors that influence financia...View AnswerShow Answer

The financial planning process concludes with efforts to:

Correct AnswerverifiedShow Answer

Developing financial goals is the first step in the financial planning process.

Correct AnswerverifiedShow Answer

A major activity in the planning component of financial planning is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo,she will not achieve her goal.5500 × ...View AnswerShow Answer

An example of a personal opportunity cost would be:

Correct AnswerverifiedShow Answer

The present value of a future amount will decrease if ________________. I.the discount rate increases II) the amount occurs closer in time III) the compounding frequency increases IV) inflation increases

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Interest rate risk: Changing interest ra...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Personal factors that influence financia...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
No,she will not achieve her goal.5500 × ...
View Answer

Correct Answer
verified

Correct Answer
verified