Question 1

The decisions you make in career planning are independent of the decisions you make in financial planning.

Accepted Answer

A) True 
 B)False

Question 2

The need for financial planning declines as your income increases.

Accepted Answer

A) True 
 B)False

Question 3

______  would be considered real property.

Accepted Answer

A) Stocks 
B) Land 
C) Cash 
D) Bonds 
E) Clothing 
A) Stocks 
B) Land 
C) Cash 
D) Bonds 
E) Clothing

Question 4

The three key groups in the economic environment are:

Accepted Answer

A) government, regulators, and business. 
B) government, consultants, and business. 
C) consumers, economists, and business. 
D) consumers, business, and managers. 
E) government, consumers, and business. 
A) government, regulators, and business. 
B) government, consultants, and business. 
C) consumers, economists, and business. 
D) consumers, business, and managers. 
E) government, consumers, and business.

Question 5

Tax planning is most common among individuals with ______ income.

Accepted Answer

A) low 
B) high 
C) no 
D) erratic 
E) decreasing 
A) low 
B) high 
C) no 
D) erratic 
E) decreasing

Question 6

The support of philanthropic organizations is a material item that contributes to our quality of life.

Accepted Answer

A) True 
 B)False

Question 7

A key determinant of an individual's quality of life is his or her:

Accepted Answer

A) tax bill. 
B) financial goal. 
C) wealth. 
D) motivation. 
E) growth potential. 
A) tax bill. 
B) financial goal. 
C) wealth. 
D) motivation. 
E) growth potential.

Question 8

Ben invests $10,000 at a rate of interest of 5 percent for 40 years. Which of the following statements about the return on the investment is true?

Accepted Answer

A) Ben will receive more money at the end of 30 years compared to the money received at the end of 40 years. 
B) Ben will receive more money at a 3 percent rate of interest instead of the existing rate. 
C) Ben will receive interest of $5,000 at the end of 10 years. 
D) Ben will receive no interest on his investment at the end of the investment period. 
E) Ben will receive a significant amount at the end of the investment period, due to the feature of compounding. 
A) Ben will receive more money at the end of 30 years compared to the money received at the end of 40 years. 
B) Ben will receive more money at a 3 percent rate of interest instead of the existing rate. 
C) Ben will receive interest of $5,000 at the end of 10 years. 
D) Ben will receive no interest on his investment at the end of the investment period. 
E) Ben will receive a significant amount at the end of the investment period, due to the feature of compounding.

Question 9

Short-term planning should include creating and maintaining an emergency fund with at least 6 months' worth of income.

Accepted Answer

A) True 
 B)False

Question 10

Geographic factors affect your earning power.

Accepted Answer

A) True 
 B)False

Question 11

Becky graduated with a master's degree in personal financial planning. After working for 2 years in a small financial planning firm, Becky earns $85,000 annually and saves $5,000 a year after spending on her current needs. What is her average propensity to consume?

Accepted Answer

A) 5 percent 
B) 25 percent 
C) 60 percent 
D) 88 percent 
E) 94 percent 
A) 5 percent 
B) 25 percent 
C) 60 percent 
D) 88 percent 
E) 94 percent

Question 12

For employees of large firms, managing employee benefits is an important part of financial planning.

Accepted Answer

A) True 
 B)False

Question 13

The financial planning process helps in:

Accepted Answer

A) increasing assets. 
B) increasing debts. 
C) reducing utility. 
D) reducing financial flexibility. 
E) increasing financial risk. 
A) increasing assets. 
B) increasing debts. 
C) reducing utility. 
D) reducing financial flexibility. 
E) increasing financial risk.

Question 14

Which of the following is one of the most emotional issues in any relationship, including that with a partner, parents, or children?

Accepted Answer

A) Career choices 
B) Hobbies 
C) Friends 
D) Money 
E) Retirement planning 
A) Career choices 
B) Hobbies 
C) Friends 
D) Money 
E) Retirement planning

Question 15

Living costs are constant throughout the country.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following financial goals is most useful for developing a financial plan?

Accepted Answer

A) Make a $12,000 down payment on an automobile in 4 years. 
B) Retire with a comfortable lifestyle in 25 years. 
C) Buy a $125,000 house. 
D) Purchase a $40,000 boat. 
E) Join the county club on retirement in 20 years. 
A) Make a $12,000 down payment on an automobile in 4 years. 
B) Retire with a comfortable lifestyle in 25 years. 
C) Buy a $125,000 house. 
D) Purchase a $40,000 boat. 
E) Join the county club on retirement in 20 years.

Question 17

Inflation refers to:

Accepted Answer

A) increasing prices. 
B) declining population. 
C) increasing tax deferment. 
D) increasing stock index. 
E) decreasing birth rate. 
A) increasing prices. 
B) declining population. 
C) increasing tax deferment. 
D) increasing stock index. 
E) decreasing birth rate.

Question 18

The best way to achieve your financial objectives is to:

Accepted Answer

A) have a luxurious standard of living. 
B) spend your money at once to reach your objectives swiftly. 
C) develop a sound financial plan. 
D) create a good tax deferment strategy. 
E) monitor your spending. 
A) have a luxurious standard of living. 
B) spend your money at once to reach your objectives swiftly. 
C) develop a sound financial plan. 
D) create a good tax deferment strategy. 
E) monitor your spending.

Question 19

Marital status affects the income level of individuals.

Accepted Answer

A) True 
 B)False

Question 20

Career plans should not be changed after long- and short-term career goals are set.

Accepted Answer

A) True 
 B)False

The decisions you make in career planning are independent of the decisions you make in financial planning.

The need for financial planning declines as your income increases.

______ would be considered real property.

The three key groups in the economic environment are:

Tax planning is most common among individuals with ______ income.

The support of philanthropic organizations is a material item that contributes to our quality of life.

A key determinant of an individual's quality of life is his or her:

Ben invests $10,000 at a rate of interest of 5 percent for 40 years. Which of the following statements about the return on the investment is true?

Short-term planning should include creating and maintaining an emergency fund with at least 6 months' worth of income.

Geographic factors affect your earning power.

Becky graduated with a master's degree in personal financial planning. After working for 2 years in a small financial planning firm, Becky earns $85,000 annually and saves $5,000 a year after spending on her current needs. What is her average propensity to consume?

For employees of large firms, managing employee benefits is an important part of financial planning.

The financial planning process helps in:

Which of the following is one of the most emotional issues in any relationship, including that with a partner, parents, or children?

Living costs are constant throughout the country.

Which of the following financial goals is most useful for developing a financial plan?

Inflation refers to:

The best way to achieve your financial objectives is to:

Marital status affects the income level of individuals.

Career plans should not be changed after long- and short-term career goals are set.

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 1: Understanding the Financial Process

The decisions you make in career planning are independent of the decisions you make in financial planning.

The need for financial planning declines as your income increases.

______ would be considered real property.

The three key groups in the economic environment are:

Tax planning is most common among individuals with ______ income.

The support of philanthropic organizations is a material item that contributes to our quality of life.

A key determinant of an individual's quality of life is his or her:

Ben invests $10,000 at a rate of interest of 5 percent for 40 years. Which of the following statements about the return on the investment is true?

Short-term planning should include creating and maintaining an emergency fund with at least 6 months' worth of income.

Geographic factors affect your earning power.

Becky graduated with a master's degree in personal financial planning. After working for 2 years in a small financial planning firm, Becky earns $85,000 annually and saves $5,000 a year after spending on her current needs. What is her average propensity to consume?

For employees of large firms, managing employee benefits is an important part of financial planning.

The financial planning process helps in:

Which of the following is one of the most emotional issues in any relationship, including that with a partner, parents, or children?

Living costs are constant throughout the country.

Which of the following financial goals is most useful for developing a financial plan?

Inflation refers to:

The best way to achieve your financial objectives is to:

Marital status affects the income level of individuals.

Career plans should not be changed after long- and short-term career goals are set.

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters