Question 1

____________ goals relate to personal relationships,health,and education.

Accepted Answer

A) Durable-product 
B) Short-term 
C) Consumable-product 
D) Intangible-purchase 
E) Intermediate 
A) Durable-product 
B) Short-term 
C) Consumable-product 
D) Intangible-purchase 
E) Intermediate

Question 2

One aspect of financial planning is to make wise decisions as to what to purchase and when to purchase it.Which aspect of financial planning does this deal with?

Accepted Answer

A) Borrowing 
B) Spending 
C) Managing Risk 
D) Investing 
E) Retirement and Estate Planning 
A) Borrowing 
B) Spending 
C) Managing Risk 
D) Investing 
E) Retirement and Estate Planning

Question 3

Higher consumer prices are likely to be accompanied by:

Accepted Answer

A) lower union wages. 
B) lower interest rates. 
C) lower production costs. 
D) higher interest rates. 
E) higher exports. 
A) lower union wages. 
B) lower interest rates. 
C) lower production costs. 
D) higher interest rates. 
E) higher exports.

Question 4

John is planning to go to graduate school in a program that will take three years.John wants to have available $10,000 available each year for his school and living expenses.If he earns 6% on his investments,how much must be deposited at the start of his studies for him to withdraw $10,000 a year for three years?

Accepted Answer

A) $10,000 
B) $18,390 
C) $26,730 
D) $29,100 
E) $30,000 
A) $10,000 
B) $18,390 
C) $26,730 
D) $29,100 
E) $30,000

Question 5

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 6

Which type of computation would a person use to determine current value of a desired amount for the future?

Accepted Answer

A) simple interest 
B) future value of a single amount 
C) future value of a series of deposits 
D) present value of a single amount 
E) present value of a series of deposits 
A) simple interest 
B) future value of a single amount 
C) future value of a series of deposits 
D) present value of a single amount 
E) present value of a series of deposits

Question 7

Time value of money refers to changes in consumer spending when inflation occurs.

Accepted Answer

A) True 
 B)False

Question 8

Changes in income,values,and family situation make it necessary to

Accepted Answer

A) evaluate and revise your actions. 
B) implement the financial plan. 
C) develop financial goals. 
D) analyze your current personal and financial situation. 
E) create a financial plan of action. 
A) evaluate and revise your actions. 
B) implement the financial plan. 
C) develop financial goals. 
D) analyze your current personal and financial situation. 
E) create a financial plan of action.

Question 9

If you desire your money to double in 6 years,what rate of return would you need to earn?

Accepted Answer

A) 6 percent 
B) 8 percent 
C) 9 percent 
D) 10 percent 
E) 12 percent 
A) 6 percent 
B) 8 percent 
C) 9 percent 
D) 10 percent 
E) 12 percent

Question 10

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 11

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

Accepted Answer

A) Inflation risk 
B) Interest rate risk 
C) Income risk 
D) Personal risk 
E) Liquidity risk 
A) Inflation risk 
B) Interest rate risk 
C) Income risk 
D) Personal risk 
E) Liquidity risk

Question 12

John Gleason is interested in purchasing a 46" rear projection TV for his living room.John knows that right now the TV will cost approximately $1500.John is not sure he can afford this TV right now but is worried that if he waits,the cost of the TV will rise to $1800.Which type of risk is John worried about?

Accepted Answer

A) Inflation risk 
B) Interest rate risk 
C) Income risk 
D) Personal risk 
E) Liquidity risk 
A) Inflation risk 
B) Interest rate risk 
C) Income risk 
D) Personal risk 
E) Liquidity risk

Question 13

Which of the following goals would be the easiest to implement and measure its accomplishment?

Accepted Answer

A) "Reduce our debt payments." 
B) "Save funds for an annual vacation." 
C) "Save $100 a month to create a $4,000 emergency fund." 
D) "Invest $2,000 a year for retirement." 
E) "Increase our emergency fund." 
A) "Reduce our debt payments." 
B) "Save funds for an annual vacation." 
C) "Save $100 a month to create a $4,000 emergency fund." 
D) "Invest $2,000 a year for retirement." 
E) "Increase our emergency fund."

Question 14

Using the services of financial institutions will be most evident in your effort to:

Accepted Answer

A) develop financial goals. 
B) evaluate and revise your actions. 
C) analyze your current personal and financial situation. 
D) implement the financial plan. 
E) create a financial plan of action. 
A) develop financial goals. 
B) evaluate and revise your actions. 
C) analyze your current personal and financial situation. 
D) implement the financial plan. 
E) create a financial plan of action.

Question 15

If a person deposited $50 a month for 6 years earning 8 percent,this would involve what type of computation?

Accepted Answer

A) simple interest 
B) future value of a single amount 
C) future value of a series of deposits 
D) present value of a single amount 
E) present value of a series of deposits 
A) simple interest 
B) future value of a single amount 
C) future value of a series of deposits 
D) present value of a single amount 
E) present value of a series of deposits

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

One aspect of financial planning is to control your use of credit.Which aspect of financial planning does this deal with?

Accepted Answer

A) Borrowing 
B) Spending 
C) Managing Risk 
D) Investing 
E) Retirement and Estate Planning 
A) Borrowing 
B) Spending 
C) Managing Risk 
D) Investing 
E) Retirement and Estate Planning

Question 18

A question associated with the saving component of financial planning is:

Accepted Answer

A) Do you have an adequate emergency fund? 
B) Is your will current? 
C) Is your investment program appropriate to your income and tax situation? 
D) Do you have a realistic budget for your current financial situation? 
E) Are your transportation expenses minimized through careful planning? 
A) Do you have an adequate emergency fund? 
B) Is your will current? 
C) Is your investment program appropriate to your income and tax situation? 
D) Do you have a realistic budget for your current financial situation? 
E) Are your transportation expenses minimized through careful planning?

Question 19

Which of the following is an example of opportunity cost?

Accepted Answer

A) renting an apartment near school 
B) saving money instead of taking a vacation 
C) setting aside money for paying income tax 
D) purchasing automobile insurance 
E) using a personal computer for financial planning 
A) renting an apartment near school 
B) saving money instead of taking a vacation 
C) setting aside money for paying income tax 
D) purchasing automobile insurance 
E) using a personal computer for financial planning

Question 20

The financial planning process concludes with efforts to:

Accepted Answer

A) develop financial goals. 
B) create a financial plan of action. 
C) analyze your current personal and financial situation. 
D) review the financial plan. 
E) review and revise your actions. 
A) develop financial goals. 
B) create a financial plan of action. 
C) analyze your current personal and financial situation. 
D) review the financial plan. 
E) review and revise your actions.

____________ goals relate to personal relationships,health,and education.

One aspect of financial planning is to make wise decisions as to what to purchase and when to purchase it.Which aspect of financial planning does this deal with?

Higher consumer prices are likely to be accompanied by:

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

Which type of computation would a person use to determine current value of a desired amount for the future?

Time value of money refers to changes in consumer spending when inflation occurs.

Changes in income,values,and family situation make it necessary to

If you desire your money to double in 6 years,what rate of return would you need to earn?

An example of a personal opportunity cost would be:

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

Which of the following goals would be the easiest to implement and measure its accomplishment?

Using the services of financial institutions will be most evident in your effort to:

If a person deposited $50 a month for 6 years earning 8 percent,this would involve what type of computation?

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

One aspect of financial planning is to control your use of credit.Which aspect of financial planning does this deal with?

A question associated with the saving component of financial planning is:

Which of the following is an example of opportunity cost?

The financial planning process concludes with efforts to:

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 Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 1: Personal Finance Basics and the Time Value of Money

____________ goals relate to personal relationships,health,and education.

One aspect of financial planning is to make wise decisions as to what to purchase and when to purchase it.Which aspect of financial planning does this deal with?

Higher consumer prices are likely to be accompanied by:

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

Which type of computation would a person use to determine current value of a desired amount for the future?

Time value of money refers to changes in consumer spending when inflation occurs.

Changes in income,values,and family situation make it necessary to

If you desire your money to double in 6 years,what rate of return would you need to earn?

An example of a personal opportunity cost would be:

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

Which of the following goals would be the easiest to implement and measure its accomplishment?

Using the services of financial institutions will be most evident in your effort to:

If a person deposited $50 a month for 6 years earning 8 percent,this would involve what type of computation?

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

One aspect of financial planning is to control your use of credit.Which aspect of financial planning does this deal with?

A question associated with the saving component of financial planning is:

Which of the following is an example of opportunity cost?

The financial planning process concludes with efforts to:

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 Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters