Question 1

A strong economy leads to:

Accepted Answer

A)  a low gross domestic product (GDP). 
B)  high tax percentages. 
C)  high employment opportunities. 
D)  low tax penalty rates. 
E)  a low value of retirement accounts. 
A)  a low gross domestic product (GDP). 
B)  high tax percentages. 
C)  high employment opportunities. 
D)  low tax penalty rates. 
E)  a low value of retirement accounts.

Question 2

Which of the following practices will help in dealing with unexpected negative "financial shocks"?

Accepted Answer

A)  Purchasing low-utility products 
B)  Accumulating debt 
C)  Acquiring assets with low financial value 
D)  Setting up an emergency fund 
E)  Planning for retirement 
A)  Purchasing low-utility products 
B)  Accumulating debt 
C)  Acquiring assets with low financial value 
D)  Setting up an emergency fund 
E)  Planning for retirement

Question 3

Income tends to _____  between the ages of 65 and 80.

Accepted Answer

A)  increase 
B)  decrease 
C)  stabilize 
D)  fluctuate 
E)  decrease and then increase slowly 
A)  increase 
B)  decrease 
C)  stabilize 
D)  fluctuate 
E)  decrease and then increase slowly

Question 4

A decrease in the gross domestic product (GDP) would indicate that the economy is experiencing:

Accepted Answer

A)  an expansion. 
B)  a contraction. 
C)  deflation. 
D)  stagflation. 
E)  a growth spurt. 
A)  an expansion. 
B)  a contraction. 
C)  deflation. 
D)  stagflation. 
E)  a growth spurt.

Question 5

The last step in the financial planning process is to:

Accepted Answer

A)  develop financial plans and strategies to achieve goals. 
B)  use financial statements to evaluate results of plans and budgets, taking corrective action as required. 
C)  implement financial plans and strategies. 
D)  redefine goals and revise plans and strategies as personal circumstances change. 
E)  periodically develop and implement budgets to monitor and control progress toward goals. 
A)  develop financial plans and strategies to achieve goals. 
B)  use financial statements to evaluate results of plans and budgets, taking corrective action as required. 
C)  implement financial plans and strategies. 
D)  redefine goals and revise plans and strategies as personal circumstances change. 
E)  periodically develop and implement budgets to monitor and control progress toward goals.

Question 6

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. 
[ Utility | Propensity to consume ] refers to the amount of satisfaction received from purchasing certain types or quantities of goods and services.

Accepted Answer

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

Question 7

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 8

You should discuss your financial goals and attitudes toward money with your partner.

Accepted Answer

A) True 
 B)False

Question 9

Retirement planning includes taking advantage of and managing employer-sponsored benefits.

Accepted Answer

A) True 
 B)False

Question 10

_____ is something we owe, which is measured by the amount of debt we incur.

Accepted Answer

A)  An asset 
B)  An estate 
C)  A liability 
D)  Insurance 
E)  A goal 
A)  An asset 
B)  An estate 
C)  A liability 
D)  Insurance 
E)  A goal

Question 11

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. 
Long-term financial goals should indicate wants and desires for a period covering about 6 years out to the next [ 10 or 20 | 30 or 40 ] years.

Accepted Answer

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

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Mike's annual income is $45,000, and he spends $30,000 for current needs. Mike's average propensity to consume is 80 percent.

Accepted Answer

A) True 
 B)False

Question 14

Typically, an individual's salary will be lower if he or she lives in a(n) _____ area.

Accepted Answer

A)  metropolitan 
B)  overpopulated 
C)  industrial 
D)  rural 
E)  well-developed 
A)  metropolitan 
B)  overpopulated 
C)  industrial 
D)  rural 
E)  well-developed

Question 15

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. 
Following an economic trough, the economy will often enter a period of [ expansion | contraction ].

Accepted Answer

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

Question 16

Which of the following age groups tends to have the highest income?

Accepted Answer

A)  18-24 
B)  25-34 
C)  35-44 
D)  45-64 
E)  65 and older 
A)  18-24 
B)  25-34 
C)  35-44 
D)  45-64 
E)  65 and older

Question 17

Saving $400 for a large, flat-screen TV within the next 4 months is an example of a short-term goal.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Which of the following statements about Andy is true if the inflation rate is increasing every year by 1 percent and there is no growth in his salary?

Accepted Answer

A)  Andy can afford to buy more luxury items as prices go down. 
B)  Andy's purchasing power will decrease. 
C)  Andy's employment opportunities will increase. 
D)  The lack of growth in Andy's salary will increase the average inflation rate . 
E)  Andy's cost of borrowing will be reduced. 
A)  Andy can afford to buy more luxury items as prices go down. 
B)  Andy's purchasing power will decrease. 
C)  Andy's employment opportunities will increase. 
D)  The lack of growth in Andy's salary will increase the average inflation rate . 
E)  Andy's cost of borrowing will be reduced.

Question 20

Martha is 60 and has a very high net worth. Her most pressing financial concern is probably:

Accepted Answer

A)  asset acquisition planning. 
B)  liability planning. 
C)  estate planning. 
D)  insurance planning. 
E)  savings planning. 
A)  asset acquisition planning. 
B)  liability planning. 
C)  estate planning. 
D)  insurance planning. 
E)  savings planning.

A strong economy leads to:

Which of the following practices will help in dealing with unexpected negative "financial shocks"?

Income tends to _____ between the ages of 65 and 80.

A decrease in the gross domestic product (GDP) would indicate that the economy is experiencing:

The last step in the financial planning process is to:

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?

You should discuss your financial goals and attitudes toward money with your partner.

Retirement planning includes taking advantage of and managing employer-sponsored benefits.

_____ is something we owe, which is measured by the amount of debt we incur.

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

Mike's annual income is $45,000, and he spends $30,000 for current needs. Mike's average propensity to consume is 80 percent.

Typically, an individual's salary will be lower if he or she lives in a(n) _____ area.

Which of the following age groups tends to have the highest income?

Saving $400 for a large, flat-screen TV within the next 4 months is an example of a short-term goal.

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

Which of the following statements about Andy is true if the inflation rate is increasing every year by 1 percent and there is no growth in his salary?

Martha is 60 and has a very high net worth. Her most pressing financial concern is probably:

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

A strong economy leads to:

Which of the following practices will help in dealing with unexpected negative "financial shocks"?

Income tends to _____ between the ages of 65 and 80.

A decrease in the gross domestic product (GDP) would indicate that the economy is experiencing:

The last step in the financial planning process is to:

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?

You should discuss your financial goals and attitudes toward money with your partner.

Retirement planning includes taking advantage of and managing employer-sponsored benefits.

_____ is something we owe, which is measured by the amount of debt we incur.

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

Mike's annual income is $45,000, and he spends $30,000 for current needs. Mike's average propensity to consume is 80 percent.

Typically, an individual's salary will be lower if he or she lives in a(n) _____ area.

Which of the following age groups tends to have the highest income?

Saving $400 for a large, flat-screen TV within the next 4 months is an example of a short-term goal.

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

Which of the following statements about Andy is true if the inflation rate is increasing every year by 1 percent and there is no growth in his salary?

Martha is 60 and has a very high net worth. Her most pressing financial concern is probably:

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