Question 1

An example of a personal opportunity cost would be:

Accepted Answer

A) interest lost by using savings to make a purchase. 
B) higher earnings on savings that must be kept on deposit a minimum of six months. 
C) lost wages due to continuing as a full-time student. 
D) time comparing several brands of personal computers. 
E) having to pay a tax penalty due to not having enough withheld from your monthly salary. 
A) interest lost by using savings to make a purchase. 
B) higher earnings on savings that must be kept on deposit a minimum of six months. 
C) lost wages due to continuing as a full-time student. 
D) time comparing several brands of personal computers. 
E) having to pay a tax penalty due to not having enough withheld from your monthly salary.

Question 2

Melanie Walsh likes to go to the movies once a week.When she is at the movies,she generally gets a large popcorn and a drink.Melanie wants to be sure that she sets aside money each week so she can continue going to the movies.What type of goal would this be for Melanie?

Accepted Answer

A) Consumable-product goal 
B) Durable-product goal 
C) Intangible goal 
D) Intermediate goal 
E) Long term goal 
A) Consumable-product goal 
B) Durable-product goal 
C) Intangible goal 
D) Intermediate goal 
E) Long term goal

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The problem of bankruptcy is associated with misuse of credit in the ______________ component of financial planning.

Accepted Answer

A) sharing 
B) saving 
C) obtaining 
D) borrowing 
E) protecting 
A) sharing 
B) saving 
C) obtaining 
D) borrowing 
E) protecting

Question 5

Lynn Roy's goal has been to travel around the world.She has now been traveling for six months and she has decided she is a little tired of living out of a suitcase.She has decided to go home,look for a part time job and take shorter trips to locations around the world that appeal to her.Which step in the financial planning process does this scenario most likely demonstrate?

Accepted Answer

A) Developing her financial goals 
B) Identifying alternative courses of action 
C) Evaluating her alternatives 
D) Implementing her financial plan 
E) Reviewing and revising her financial plan 
A) Developing her financial goals 
B) Identifying alternative courses of action 
C) Evaluating her alternatives 
D) Implementing her financial plan 
E) Reviewing and revising her financial plan

Question 6

The amount of interest is determined by multiplying the amount in savings by the:

Accepted Answer

A) annual interest rate. 
B) time period. 
C) number of months in a year. 
D) time period and number of months. 
E) annual interest rate and the time period. 
A) annual interest rate. 
B) time period. 
C) number of months in a year. 
D) time period and number of months. 
E) annual interest rate and the time period.

Question 7

Developing financial goals is the ______ step in the financial planning process.

Accepted Answer

A) first 
B) second 
C) third 
D) fourth 
E) fifth 
A) first 
B) second 
C) third 
D) fourth 
E) fifth

Question 8

The financial planning process concludes with efforts to:

Accepted Answer

A) develop financial goals. 
B) create a financial action plan. 
C) determine your current financial situation. 
D) implement the financial action plan. 
E) review and revise your financial plan. 
A) develop financial goals. 
B) create a financial action plan. 
C) determine your current financial situation. 
D) implement the financial action plan. 
E) review and revise your financial plan.

Question 9

Developing and using a budget is part of the "obtaining" component of financial planning.

Accepted Answer

A) True 
 B)False

Question 10

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 11

The risk premium you receive as a saver is based:

Accepted Answer

A) on your credit rating. 
B) on the amount of money you are borrowing. 
C) only on the uncertainty associated with getting your money back. 
D) only on the expected rate of inflation. 
E) in part on the uncertainty associated with getting your money back and the expected rate of inflation. 
A) on your credit rating. 
B) on the amount of money you are borrowing. 
C) only on the uncertainty associated with getting your money back. 
D) only on the expected rate of inflation. 
E) in part on the uncertainty associated with getting your money back and the expected rate of inflation.

Question 12

Increased consumer spending will usually cause:

Accepted Answer

A) lower consumer prices. 
B) reduced employment levels. 
C) lower tax revenues. 
D) lower interest rates. 
E) higher employment levels. 
A) lower consumer prices. 
B) reduced employment levels. 
C) lower tax revenues. 
D) lower interest rates. 
E) higher employment levels.

Question 13

Explain why borrowers benefit more than lenders in times of high inflation.

Accepted Answer

Inflation can also adversely affect lend

Question 14

You are planning to buy a house in five years.How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

Accepted Answer

A) $6,000 
B) $6,590 
C) $7,470 
D) $9,400 
E) $10,000 
A) $6,000 
B) $6,590 
C) $7,470 
D) $9,400 
E) $10,000

Question 15

Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.

Accepted Answer

Financial Goals should be spec

Question 16

Economics is the study of using money to achieve financial goals.

Accepted Answer

A) True 
 B)False

An example of a personal opportunity cost would be:

Melanie Walsh likes to go to the movies once a week.When she is at the movies,she generally gets a large popcorn and a drink.Melanie wants to be sure that she sets aside money each week so she can continue going to the movies.What type of goal would this be for Melanie?

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

The problem of bankruptcy is associated with misuse of credit in the ______________ component of financial planning.

The amount of interest is determined by multiplying the amount in savings by the:

Developing financial goals is the ______ step in the financial planning process.

The financial planning process concludes with efforts to:

Developing and using a budget is part of the "obtaining" component of financial planning.

The advantages of personal financial planning include:

The risk premium you receive as a saver is based:

Increased consumer spending will usually cause:

Explain why borrowers benefit more than lenders in times of high inflation.

You are planning to buy a house in five years.How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.

Economics is the study of using money to achieve financial goals.

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 Stock

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

An example of a personal opportunity cost would be:

Melanie Walsh likes to go to the movies once a week.When she is at the movies,she generally gets a large popcorn and a drink.Melanie wants to be sure that she sets aside money each week so she can continue going to the movies.What type of goal would this be for Melanie?

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

The problem of bankruptcy is associated with misuse of credit in the ______________ component of financial planning.

The amount of interest is determined by multiplying the amount in savings by the:

Developing financial goals is the ______ step in the financial planning process.

The financial planning process concludes with efforts to:

Developing and using a budget is part of the "obtaining" component of financial planning.

The advantages of personal financial planning include:

The risk premium you receive as a saver is based:

Increased consumer spending will usually cause:

Explain why borrowers benefit more than lenders in times of high inflation.

You are planning to buy a house in five years.How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.

Economics is the study of using money to achieve financial goals.

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 Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters