Question 1

The advantages of personal financial planning include:

Accepted Answer

A) Increased effectiveness in obtaining,using and protecting your financial resources 
B) Increased control of your financial affairs by avoiding excessive debt and bankruptcy 
C) Improved personal relationships resulting from better communicated financial decisions 
D) All of these 
E) None of these 
A) Increased effectiveness in obtaining,using and protecting your financial resources 
B) Increased control of your financial affairs by avoiding excessive debt and bankruptcy 
C) Improved personal relationships resulting from better communicated financial decisions 
D) All of these 
E) None of these

Question 2

Planning to buy a car is an example of an intangible-purchase goal.

Accepted Answer

A) True 
 B)False

Question 3

What is meant by the term "Time Value of Money"?

Accepted Answer

Time value of money refers to the increa

Question 4

In most societies,the forces of ________ set prices for securities,goods,and services.

Accepted Answer

A) supply and demand 
B) inflation 
C) business 
D) government 
E) foreign competition 
A) supply and demand 
B) inflation 
C) business 
D) government 
E) foreign competition

Question 5

A financial plan is another name for a budget.

Accepted Answer

A) True 
 B)False

Question 6

The ability to readily convert financial resources into cash without loss of value is referred to as:

Accepted Answer

A) bankruptcy. 
B) liquidity. 
C) investing. 
D) saving. 
E) opportunity cost. 
A) bankruptcy. 
B) liquidity. 
C) investing. 
D) saving. 
E) opportunity cost.

Question 7

If inflation is increasing at 4 percent per year,and your salary increases at the same rate,how long will it take your salary to double?

Accepted Answer

A) 24 years 
B) 18 years 
C) 14 years 
D) 12 years 
E) 6 years 
A) 24 years 
B) 18 years 
C) 14 years 
D) 12 years 
E) 6 years

Question 8

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ________ percent.

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
E) 5 
A) 1 
B) 2 
C) 3 
D) 4 
E) 5

Question 9

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders,excluding items produced with foreign resources.

Accepted Answer

A) True 
 B)False

Question 10

A family spends $40,000 on living expenses.With an annual inflation rate of 3 percent,they can expect to spend approximately ________ in one year.Use Exhibit 1-A.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

Accepted Answer

A) $40,300 
B) $41,200 
C) $42,000 
D) $43,720 
E) $46,000 
A) $40,300 
B) $41,200 
C) $42,000 
D) $43,720 
E) $46,000

Question 11

During ________,even though prices decline,spending slows because consumers expect prices to continue to decline.

Accepted Answer

A) deflation 
B) depreciation 
C) appreciation 
D) economic recovery 
E) inflation 
A) deflation 
B) depreciation 
C) appreciation 
D) economic recovery 
E) inflation

Question 12

The following are examples of intangible-purchase goals,except:

Accepted Answer

A) obtaining a college degree. 
B) going on a cruise vacation. 
C) buying a house. 
D) losing weight. 
E) getting more sleep. 
A) obtaining a college degree. 
B) going on a cruise vacation. 
C) buying a house. 
D) losing weight. 
E) getting more sleep.

Question 13

If you desire your savings to double in 6 years,what rate of return would you need to earn?

Accepted Answer

A) 6 percent 
B) 8 percent 
C) 9 percent 
D) 10 percent 
E) 12 percent 
A) 6 percent 
B) 8 percent 
C) 9 percent 
D) 10 percent 
E) 12 percent

Question 14

When identifying alternative courses of action,possible courses of action include:

Accepted Answer

A) Continue with the same course of action 
B) Expand the past situation 
C) Change the past situation 
D) Take an old course of action 
E) All of these 
A) Continue with the same course of action 
B) Expand the past situation 
C) Change the past situation 
D) Take an old course of action 
E) All of these

Question 15

The earnings you receive as a saver or an investor reflect:

Accepted Answer

A) past interest rates 
B) a risk premium based on length of the savings period 
C) expected deflation 
D) the extent of certainty about getting your money back 
E) a positive credit rating 
A) past interest rates 
B) a risk premium based on length of the savings period 
C) expected deflation 
D) the extent of certainty about getting your money back 
E) a positive credit rating

Question 16

Sophia Martin knows that if she continues to work full time,it will be difficult for her to get the time off she needs to be able to travel around the world.However,if she continues to work full time she will more easily earn the money she needs to take her trip and still have money left for her living expenses after she gets back from 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 17

Which of the following is usually considered a long-term financial strategy?

Accepted Answer

A) Creating a budget this year 
B) Using savings to pay off a loan within one year 
C) Renting an apartment for three years to save for the purchase of a home 
D) Investing in a mutual fund for six years to accumulate retirement funds 
E) Purchasing a six month auto insurance policy to cover the needs of dependents 
A) Creating a budget this year 
B) Using savings to pay off a loan within one year 
C) Renting an apartment for three years to save for the purchase of a home 
D) Investing in a mutual fund for six years to accumulate retirement funds 
E) Purchasing a six month auto insurance policy to cover the needs of dependents

Question 18

A question associated with the saving component of financial planning is:

Accepted Answer

A) Do you have an adequate emergency fund? 
B) Is your will current? 
C) Is your investment program appropriate to your income and tax situation? 
D) Do you have a realistic budget for your current financial situation? 
E) Are your transportation expenses minimized through careful planning? 
A) Do you have an adequate emergency fund? 
B) Is your will current? 
C) Is your investment program appropriate to your income and tax situation? 
D) Do you have a realistic budget for your current financial situation? 
E) Are your transportation expenses minimized through careful planning?

Question 19

Trade balance is defined as the difference between a country's exports and its imports.

Accepted Answer

A) True 
 B)False

Question 20

Opportunity costs may be viewed only in terms of financial resources.

Accepted Answer

A) True 
 B)False

The advantages of personal financial planning include:

Planning to buy a car is an example of an intangible-purchase goal.

What is meant by the term "Time Value of Money"?

In most societies,the forces of ________ set prices for securities,goods,and services.

A financial plan is another name for a budget.

The ability to readily convert financial resources into cash without loss of value is referred to as:

If inflation is increasing at 4 percent per year,and your salary increases at the same rate,how long will it take your salary to double?

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ________ percent.

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders,excluding items produced with foreign resources.

A family spends $40,000 on living expenses.With an annual inflation rate of 3 percent,they can expect to spend approximately ________ in one year.Use Exhibit 1-A.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

During ________,even though prices decline,spending slows because consumers expect prices to continue to decline.

The following are examples of intangible-purchase goals,except:

If you desire your savings to double in 6 years,what rate of return would you need to earn?

When identifying alternative courses of action,possible courses of action include:

The earnings you receive as a saver or an investor reflect:

Which of the following is usually considered a long-term financial strategy?

A question associated with the saving component of financial planning is:

Trade balance is defined as the difference between a country's exports and its imports.

Opportunity costs may be viewed only in terms of financial resources.

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

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

The advantages of personal financial planning include:

Planning to buy a car is an example of an intangible-purchase goal.

What is meant by the term "Time Value of Money"?

In most societies,the forces of ________ set prices for securities,goods,and services.

A financial plan is another name for a budget.

The ability to readily convert financial resources into cash without loss of value is referred to as:

If inflation is increasing at 4 percent per year,and your salary increases at the same rate,how long will it take your salary to double?

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ________ percent.

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders,excluding items produced with foreign resources.

A family spends $40,000 on living expenses.With an annual inflation rate of 3 percent,they can expect to spend approximately ________ in one year.Use Exhibit 1-A.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

During ________,even though prices decline,spending slows because consumers expect prices to continue to decline.

The following are examples of intangible-purchase goals,except:

If you desire your savings to double in 6 years,what rate of return would you need to earn?

When identifying alternative courses of action,possible courses of action include:

The earnings you receive as a saver or an investor reflect:

Which of the following is usually considered a long-term financial strategy?

A question associated with the saving component of financial planning is:

Trade balance is defined as the difference between a country's exports and its imports.

Opportunity costs may be viewed only in terms of financial resources.

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