Question 1

The second 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) D) and E)
G) B) and D)

Question 2

The second 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) A) and E)

Question 3

Assume the following future values will be received at the end of each year.What is the interest rate if the future value of these amounts at the end of year 3 is equal to $2,393? Yr.1 = $500; Yr.2 = $750; Yr.3 = $1,000

Accepted Answer

A)  6.5%
B)  6.8%
C)  7.0%
D)  8.0%
E)  8.9%F) A) and B)
G) None of the above

Question 4

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 E)
G) A) and E)

Question 5

An individual invests $10,000 at a rate of 5% per annum.What will be its value in 10 years' time?

Accepted Answer

A)  $15,000
B)  $15,853
C)  $16,289
D)  $18,000
E)  $19,000F) A) and E)
G) A) and D)

Question 6

Which of the following would cause prices to drop?

Accepted Answer

A)  a demand for higher wages
B)  increased production by business
C)  increased taxes on business
D)  a reduction in the money supply
E)  high levels of demand by customersF) A) and D)
G) C) and E)

Question 7

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

Question 8

Higher interest rates can be caused by:

Accepted Answer

A)  a lower money supply.
B)  an increase in the money supply.
C)  a decrease in consumer borrowing.
D)  lower government spending.
E)  increased saving and investing by consumers.F) C) and E)
G) D) and E)

Question 9

Economic Factor: Gross domestic product measures?

Accepted Answer

A)  The total value of goods and services produced within a country's borders, including items produced with foreign resources
B)  The demand for goods and services by individuals and households
C)  The cost of money; the cost of credit when you borrow; the return on your money when you save or invest
D)  The dollars available for spending in our economy
E)  The number of people without employment who are willing and able to workF) A) and E)
G) B) and E)

Question 10

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) B) and E)
G) C) and E)

Question 11

The time value of money refers to:

Accepted Answer

A)  personal opportunity costs such as time lost on an activity.
B)  financial decisions that require borrowing funds from a financial institution.
C)  changes in interest rates due to changes in the supply and demand for money in our economy.
D)  increases in an amount of money as a result of interest.
E)  changing demographic trends in our society.F) A) and E)
G) A) and B)

Question 12

The financial planning process is complete once you implement your financial plan.

Accepted Answer

A) True 
 B)False

Question 13

Inflation reduces the buying power of money.

Accepted Answer

A) True 
 B)False

Question 14

Life situation Older 50 single.What are your specialized financial activities?

Accepted Answer

A)  Review will and estate plan.
B)  Obtain adequate amounts of health, life, and disability insurances.
C)  Consider tax-deferred contributions to retirement fund.
D)  Consolidate financial assets
E)  Consider income splittingF) C) and E)
G) C) and D)

Question 15

Which one of the following is not an economic and product risk?

Accepted Answer

A)  Interest rates
B)  Inflation
C)  Health
D)  Liquidity
E)  CommoditiesF) C) and D)
G) A) and E)

Question 16

Higher consumer prices are likely to be accompanied by:

Accepted Answer

A)  lower union wages.
B)  lower interest rates.
C)  lower production costs.
D)  higher interest rates.
E)  higher exports.F) B) and D)
G) A) and E)

Question 17

The uncertainty associated with decision making is referred to as:

Accepted Answer

A)  opportunity cost.
B)  selection of alternatives.
C)  financial goals.
D)  personal values.
E)  risk.F) C) and D)
G) D) and E)

Question 18

The amount of simple interest is determined by multiplying the amount in savings by the:

Accepted Answer

A)  annual interest rate.
B)  time period.
C)  number of months in a year.
D)  time period and number of months.
E)  annual interest rate and the time period.F) B) and C)
G) A) and D)

Question 19

Some savings and investment choices have the potential for higher earnings.However, these may also be difficult to convert to cash when you need the funds.This problem refers to:

Accepted Answer

A)  Inflation risk
B)  Interest rate risk
C)  Income risk
D)  Personal risk
E)  Liquidity riskF) A) and D)
G) A) and E)

Question 20

Life situation Older couple 50 no dependent children at home.What are your specialized financial activities?

Accepted Answer

A)  Consider home purchase.
B)  Obtain adequate amounts of health, life, and disability insurances.
C)  Consider tax-deferred contributions to retirement fund.
D)  Consolidate financial assets
E)  Consider income splittingF) A) and B)
G) C) and D)

Exam 1: Personal Financial Planning: An Introduction

The second step of the financial planning process is to

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Which one of the following is not an economic and product risk?

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Higher consumer prices are likely to be accompanied by:

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The time value of money refers to:

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Some savings and investment choices have the potential for higher earnings.However, these may also be difficult to convert to cash when you need the funds.This problem refers to:

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An individual invests $10,000 at a rate of 5% per annum.What will be its value in 10 years' time?

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The amount of simple interest is determined by multiplying the amount in savings by the:

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The financial planning process is complete once you implement your financial plan.

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Inflation reduces the buying power of money.

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The uncertainty associated with decision making is referred to as:

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Which of the following would cause prices to drop?

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Increased consumer spending will usually cause:

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The second step of the financial planning process is to

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Life situation Older 50 single.What are your specialized financial activities?

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Assume the following future values will be received at the end of each year.What is the interest rate if the future value of these amounts at the end of year 3 is equal to $2,393? Yr.1 = $500; Yr.2 = $750; Yr.3 = $1,000

Correct AnswerverifiedShow Answer

Higher interest rates can be caused by:

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Economic Factor: Gross domestic product measures?

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Life situation Older couple 50 no dependent children at home.What are your specialized financial activities?

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

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The first step of the financial planning process is to

Correct AnswerverifiedShow Answer

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