Exam 1: Understanding the Financial Planning Process

Instructions : Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. During the expansion phase of the business cycle, the unemployment rate will [ increase | decrease ].

Financial planning helps us:

Instructions : Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ Inflation | The consumer price index (CPI) ] is the amount of goods and services each dollar buys at a given time.

Which of the following are the three stages of the financial planning life cycle?

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

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

The consumer is:

Fee-only financial planners charge commissions for the products they sell.

Money is an important motivator of personal behavior due to its strong effect on:

Instructions : Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Money can be withdrawn from tax-deferred retirement accounts beginning at age [ 59½  | 62½ ] without penalty.

The financial planning process helps in:

The average propensity to consume is commonly viewed as a key determinant of standard of living.

The best way for a family to resolve money disputes is to:

Instructions : Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ Tax | Liability and insurance ] planning is introduced early in the personal financial planning life cycle.

_____  would be considered real property.

Accumulating wealth for later years is called estate planning.

Instructions : Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Two-income families tend to [ save | spend ] what they earn.

The federal government delegates its regulation of economic activity function to businesses and consumers.

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

Financial planning can improve your standard of living.