Question 1

Tax planning is most commonly done to:

Accepted Answer

A)  determine the tax penalty. 
B)  evade taxes. 
C)  minimize taxes. 
D)  pay taxes the person considers to be fair. 
E)  learn the tax code. 
A)  determine the tax penalty. 
B)  evade taxes. 
C)  minimize taxes. 
D)  pay taxes the person considers to be fair. 
E)  learn the tax code.

Question 2

Most people tend to be more liberal about their expenditures during a recession or crisis.

Accepted Answer

A) True 
 B)False

Question 3

A carefully developed financial plan should set aside a portion of _____ for deferred, future spending.

Accepted Answer

A)  retirement funds 
B)  investment funds 
C)  current income 
D)  future income 
E)  tangible assets 
A)  retirement funds 
B)  investment funds 
C)  current income 
D)  future income 
E)  tangible assets

Question 4

The government places constraints on the personal financial environment by the use of:

Accepted Answer

A)  leverage policy. 
B)  taxation. 
C)  competition. 
D)  budgetary deficits. 
E)  the free-enterprise system. 
A)  leverage policy. 
B)  taxation. 
C)  competition. 
D)  budgetary deficits. 
E)  the free-enterprise system.

Question 5

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. 
[ Wealth  | Money ] is the medium of exchange used to measure value in financial transactions.

Accepted Answer

The answer of Instructions : Choose the word or phrase...

Question 6

Sarah starts investing in an individual retirement account (IRA) at the age of 30 and earns 10 percent for 35 years. At age 65, she will get less returns as compared to those returns if she:

Accepted Answer

A)  starts investing at the age of 25. 
B)  invests at 12 percent. 
C)  invests for 45 years. 
D)  invests up to the age of 60. 
E)  earns 10 percent for 5 years and then 12 percent for 30 years. 
A)  starts investing at the age of 25. 
B)  invests at 12 percent. 
C)  invests for 45 years. 
D)  invests up to the age of 60. 
E)  earns 10 percent for 5 years and then 12 percent for 30 years.

Question 7

_____ plans are most  helpful in making decisions regarding retirement.

Accepted Answer

A)  Personal financial 
B)  Insurance 
C)  Estate 
D)  Business 
E)  Spending 
A)  Personal financial 
B)  Insurance 
C)  Estate 
D)  Business 
E)  Spending

Question 8

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. 
The average income of household heads increases until age [ 55 | 65 ] and then starts decreasing.

Accepted Answer

The answer of Instructions : Choose the word or phrase...

Question 9

Career planning:

Accepted Answer

A)  does not require any goal setting. 
B)  is not related to personal financial planning. 
C)  does not influence an individual's lifetime earnings. 
D)  impacts an employer's stability. 
E)  helps in improving professional satisfaction. 
A)  does not require any goal setting. 
B)  is not related to personal financial planning. 
C)  does not influence an individual's lifetime earnings. 
D)  impacts an employer's stability. 
E)  helps in improving professional satisfaction.

Question 10

Geographic factors affect your earning power.

Accepted Answer

A) True 
 B)False

Question 11

Professional financial planners:

Accepted Answer

A)  provide services on a fee or commission basis. 
B)  provide services to wealthy investors only. 
C)  set the financial goals of retired investors. 
D)  make financial decisions for investors. 
E)  are most effective during retirement years. 
A)  provide services on a fee or commission basis. 
B)  provide services to wealthy investors only. 
C)  set the financial goals of retired investors. 
D)  make financial decisions for investors. 
E)  are most effective during retirement years.

Question 12

Which of the following practices helps an individual survive in a financial crisis?

Accepted Answer

A)  Spending more than his or her earnings to maintain a good lifestyle 
B)  Investing small amounts regularly to achieve long-term financial goals 
C)  Establishing an emergency fund with 6 months' worth of income 
D)  Developing financial plans only after reaching the highest tax brackets 
E)  Hiring a noncertified financial planner 
A)  Spending more than his or her earnings to maintain a good lifestyle 
B)  Investing small amounts regularly to achieve long-term financial goals 
C)  Establishing an emergency fund with 6 months' worth of income 
D)  Developing financial plans only after reaching the highest tax brackets 
E)  Hiring a noncertified financial planner

Question 13

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. 
About [ 50%  | 75% ] of married adults say that they and their mate share all their money.

Accepted Answer

The answer of Instructions : Choose the word or phrase...

Question 14

Two people with significantly different incomes can have equal average propensities to consume because of differences in their standard of living.

Accepted Answer

A) True 
 B)False

Question 15

Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the economy.

Accepted Answer

A) True 
 B)False

Question 16

When setting financial goals, you should typically start by setting:

Accepted Answer

A)  short-term goals. 
B)  intermediate goals. 
C)  long-term goals. 
D)  goals that are not time-bound. 
E)  goals that are unrealistic. 
A)  short-term goals. 
B)  intermediate goals. 
C)  long-term goals. 
D)  goals that are not time-bound. 
E)  goals that are unrealistic.

Question 17

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 18

The amount of goods and services each dollar buys at a given time is called:

Accepted Answer

A)  inflation. 
B)  the consumer price index (CPI). 
C)  purchasing power. 
D)  the gross domestic product (GDP). 
E)  the opportunity cost. 
A)  inflation. 
B)  the consumer price index (CPI). 
C)  purchasing power. 
D)  the gross domestic product (GDP). 
E)  the opportunity cost.

Question 19

The stage in which the economy hits a peak is called:

Accepted Answer

A)  expansion. 
B)  contraction. 
C)  stagnation. 
D)  recession. 
E)  depression. 
A)  expansion. 
B)  contraction. 
C)  stagnation. 
D)  recession. 
E)  depression.

Question 20

The need for financial planning declines as your income increases.

Accepted Answer

A) True 
 B)False

Tax planning is most commonly done to:

Most people tend to be more liberal about their expenditures during a recession or crisis.

A carefully developed financial plan should set aside a portion of _____ for deferred, future spending.

The government places constraints on the personal financial environment by the use of:

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. [ Wealth | Money ] is the medium of exchange used to measure value in financial transactions.

Sarah starts investing in an individual retirement account (IRA) at the age of 30 and earns 10 percent for 35 years. At age 65, she will get less returns as compared to those returns if she:

_____ plans are most helpful in making decisions regarding retirement.

Career planning:

Geographic factors affect your earning power.

Professional financial planners:

Which of the following practices helps an individual survive in a financial crisis?

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. About [ 50% | 75% ] of married adults say that they and their mate share all their money.

Two people with significantly different incomes can have equal average propensities to consume because of differences in their standard of living.

Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the economy.

When setting financial goals, you should typically start by setting:

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?

The amount of goods and services each dollar buys at a given time is called:

The stage in which the economy hits a peak is called:

The need for financial planning declines as your income increases.

Developing Your Financial Statements and Plans

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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 1: Understanding the Financial Planning Process

Tax planning is most commonly done to:

Most people tend to be more liberal about their expenditures during a recession or crisis.

A carefully developed financial plan should set aside a portion of _____ for deferred, future spending.

The government places constraints on the personal financial environment by the use of:

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. [ Wealth | Money ] is the medium of exchange used to measure value in financial transactions.

Sarah starts investing in an individual retirement account (IRA) at the age of 30 and earns 10 percent for 35 years. At age 65, she will get less returns as compared to those returns if she:

_____ plans are most helpful in making decisions regarding retirement.

Career planning:

Geographic factors affect your earning power.

Professional financial planners:

Which of the following practices helps an individual survive in a financial crisis?

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. About [ 50% | 75% ] of married adults say that they and their mate share all their money.

Two people with significantly different incomes can have equal average propensities to consume because of differences in their standard of living.

Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the economy.

When setting financial goals, you should typically start by setting:

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?

The amount of goods and services each dollar buys at a given time is called:

The stage in which the economy hits a peak is called:

The need for financial planning declines as your income increases.

Developing Your Financial Statements and Plans

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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters