Question 1

Inflation reduces the buying power of the dollar.

Accepted Answer

A) True 
 B)False

Question 2

Increased home building results in:

Accepted Answer

A) increased job opportunities. 
B) higher wages. 
C) increased consumer spending. 
D) overall economic expansion. 
E) All of these. 
A) increased job opportunities. 
B) higher wages. 
C) increased consumer spending. 
D) overall economic expansion. 
E) All of these.

Question 3

Future value calculations involve:

Accepted Answer

A) discounting. 
B) add-on interest. 
C) compounding. 
D) simple interest. 
E) an annuity. 
A) discounting. 
B) add-on interest. 
C) compounding. 
D) simple interest. 
E) an annuity.

Question 4

Sophia Martin wants to travel around the world.Sophia has three options she can pursue: she could continue to work full time to earn the money she needs for her trip,she could work part time so that she can still earn some money but have the time necessary to complete her trip,or she could take full retirement so that she has all the time necessary to complete her trip.Which step in the financial planning process does this scenario 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 plan 
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 plan

Question 5

Patrick Jones is interested in purchasing a 65" LED TV for his living room.He knows that right now the TV will cost approximately $500.Patrick wants to borrow the money to purchase the TV but is concerned that interest rates are going to fall in the future.He is worried that he might get stuck with a loan at a high interest rate.What type of risk is Patrick worried about?

Accepted Answer

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

Question 6

The future value of $50 deposited each year for 6 years earning 7 percent would be approximately: Use Exhibit 1-B.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

Accepted Answer

A) $50 
B) $300 
C) $358 
D) $371 
E) $428 
A) $50 
B) $300 
C) $358 
D) $371 
E) $428

Question 7

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

Accepted Answer

A) Durable-product 
B) Short-term 
C) Consumable-product 
D) Intangible-purchase 
E) Intermediate 
A) Durable-product 
B) Short-term 
C) Consumable-product 
D) Intangible-purchase 
E) Intermediate

Question 8

One aspect of financial planning is to buy stocks,real estate,and mutual funds with the potential for long-term growth.Which component of financial planning does this deal with?

Accepted Answer

A) Borrowing 
B) Spending 
C) Managing risk 
D) Investing 
E) Retirement and estate planning 
A) Borrowing 
B) Spending 
C) Managing risk 
D) Investing 
E) Retirement and estate planning

Question 9

Analyzing your current financial position is a part of which step of the financial planning process:

Accepted Answer

A) Step 1,Determine current financial situation 
B) Step 2,Develop financial goals 
C) Step 3,Identify alternative courses of action 
D) Step 4,Evaluate alternatives 
E) Step 5,Create and implement the action plan 
A) Step 1,Determine current financial situation 
B) Step 2,Develop financial goals 
C) Step 3,Identify alternative courses of action 
D) Step 4,Evaluate alternatives 
E) Step 5,Create and implement the action plan

Question 10

Reduced spending causes unemployment from staff reduction.

Accepted Answer

A) True 
 B)False

Question 11

Interest on savings is calculated by multiplying the principal amount times the opportunity cost times the annual interest rate.

Accepted Answer

A) True 
 B)False

Question 12

With an inflation rate of 8 percent,prices would double in about ________ years.

Accepted Answer

A) 4 
B) 6 
C) 9 
D) 10 
E) 12 
A) 4 
B) 6 
C) 9 
D) 10 
E) 12

Question 13

One aspect of financial planning is to make wise decisions using a plan as to what to purchase and when to purchase it.Which component of financial planning does this deal with?

Accepted Answer

A) Borrowing 
B) Spending 
C) Managing risk 
D) Investing 
E) Retirement and estate planning 
A) Borrowing 
B) Spending 
C) Managing risk 
D) Investing 
E) Retirement and estate planning

Question 14

________ risk refers to the danger of changes in buying power during times of rising or falling prices.

Accepted Answer

A) Liquidity 
B) Income 
C) Personal 
D) Inflation 
E) Interest Rate 
A) Liquidity 
B) Income 
C) Personal 
D) Inflation 
E) Interest Rate

Question 15

Which of the following would cause consumer prices to drop?

Accepted Answer

A) Increased consumer borrowing 
B) Higher spending by consumers 
C) A demand for higher wages 
D) Hidden inflation 
E) Increased supply by business without increased consumer demand 
A) Increased consumer borrowing 
B) Higher spending by consumers 
C) A demand for higher wages 
D) Hidden inflation 
E) Increased supply by business without increased consumer demand

Question 16

Who is most likely to benefit from inflation?

Accepted Answer

A) Retired people 
B) Lenders 
C) Borrowers 
D) Low-income consumers 
E) Government 
A) Retired people 
B) Lenders 
C) Borrowers 
D) Low-income consumers 
E) Government

Question 17

Developing and using a budget is part of which component of financial planning?

Accepted Answer

A) Retirement and estate planning 
B) Investing 
C) Spending 
D) Managing risk 
E) Planning 
A) Retirement and estate planning 
B) Investing 
C) Spending 
D) Managing risk 
E) Planning

Question 18

William Davis has a goal of "saving $60 a month for vacation." William's goal lacks:

Accepted Answer

A) measurable terms. 
B) a realistic perspective. 
C) specific terms. 
D) the type of action to be taken. 
E) a time frame. 
A) measurable terms. 
B) a realistic perspective. 
C) specific terms. 
D) the type of action to be taken. 
E) a time frame.

Question 19

When an individual makes a purchase without considering the financial consequences of that purchase,he/she ignores the ________ aspect of financial planning.

Accepted Answer

A) borrowing 
B) risk management 
C) spending 
D) retirement and estate planning 
E) obtaining 
A) borrowing 
B) risk management 
C) spending 
D) retirement and estate planning 
E) obtaining

Question 20

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

Inflation reduces the buying power of the dollar.

Increased home building results in:

Future value calculations involve:

The future value of $50 deposited each year for 6 years earning 7 percent would be approximately: Use Exhibit 1-B.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

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

One aspect of financial planning is to buy stocks,real estate,and mutual funds with the potential for long-term growth.Which component of financial planning does this deal with?

Analyzing your current financial position is a part of which step of the financial planning process:

Reduced spending causes unemployment from staff reduction.

Interest on savings is calculated by multiplying the principal amount times the opportunity cost times the annual interest rate.

With an inflation rate of 8 percent,prices would double in about ________ years.

One aspect of financial planning is to make wise decisions using a plan as to what to purchase and when to purchase it.Which component of financial planning does this deal with?

________ risk refers to the danger of changes in buying power during times of rising or falling prices.

Which of the following would cause consumer prices to drop?

Who is most likely to benefit from inflation?

Developing and using a budget is part of which component of financial planning?

William Davis has a goal of "saving $60 a month for vacation." William's goal lacks:

When an individual makes a purchase without considering the financial consequences of that purchase,he/she ignores the ________ aspect of financial planning.

Higher consumer prices are likely to be accompanied by:

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 1: Personal Finance Basics and the Time Value of Money

Inflation reduces the buying power of the dollar.

Increased home building results in:

Future value calculations involve:

The future value of $50 deposited each year for 6 years earning 7 percent would be approximately: Use Exhibit 1-B.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

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

One aspect of financial planning is to buy stocks,real estate,and mutual funds with the potential for long-term growth.Which component of financial planning does this deal with?

Analyzing your current financial position is a part of which step of the financial planning process:

Reduced spending causes unemployment from staff reduction.

Interest on savings is calculated by multiplying the principal amount times the opportunity cost times the annual interest rate.

With an inflation rate of 8 percent,prices would double in about ________ years.

One aspect of financial planning is to make wise decisions using a plan as to what to purchase and when to purchase it.Which component of financial planning does this deal with?

________ risk refers to the danger of changes in buying power during times of rising or falling prices.

Which of the following would cause consumer prices to drop?

Who is most likely to benefit from inflation?

Developing and using a budget is part of which component of financial planning?

William Davis has a goal of "saving $60 a month for vacation." William's goal lacks:

When an individual makes a purchase without considering the financial consequences of that purchase,he/she ignores the ________ aspect of financial planning.

Higher consumer prices are likely to be accompanied by:

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters