Exam 1: Overview of a Financial Plan

Josh has decided to take a course at the local community college that could help him get a promotion at work.The course begins at 5 p.m.and goes until 9 p.m.on Monday nights.Josh normally works until 5 p.m.each day,but because of the drive time to the community college,he will need to leave work at 3 p.m.on class days.Josh currently earns $18.50 per hour.His employer contributes 10% of Josh's gross earnings to a 401(k).If the class meets 16 times,what is Josh's total opportunity cost for the class. (a)$592.00 (b)$800.00 (c)$651.20 (d)None

Estate planning results in

Potential investments include all of the following instruments except

Which of the following is not a type of decision to manage your liquidity?

Various government agencies have conducted surveys that show most people have a good understanding of personal finance.

A personal financial plan specifies financial goals and describes

A budget does not

Effective estate planning will ensure that your wealth is distributed according to your wishes,but will do nothing to reduce the potential taxes your estate is subject to.

________ management involves decisions regarding how much credit you need to support spending and which sources of credit to use.

Nancy is paid $2,000 biweekly (26 pays per year)in her job as a market researcher.Her expenses are $400 per month rent on her apartment,$100 per month for food,and $100 per month for utilities.Nancy also has student loans on which she makes monthly payments of $200.Nancy is considering the purchase of a new car,but also is very determined to save at least 50% of any budget surplus each month.If Nancy adheres to this savings plan,how much would she have available each month for a car payment.Round to the nearest dollar. (a)$3533 (b)$1766 (c)$1600 (d)None since there is a budget deficit

After your financial plan is developed it should be

Your ability to access funds to cover any short-term cash deficiencies is your ________.

Put the following six steps in order for a financial plan: (a)plans to achieve the goals (b)financial goals (c)revising the plan (d)current financial situation (e)evaluating the plan (f)selecting and implementing the best plan

Jessie has $4,000 in a bank account,$2,800 in a 401(k)plan at work,a car with a current value of $28,000,and a house that she purchased for $92,000 that has a current value of $118,000.The current balance of her home mortgage is $81,000,she has one credit card with a $3,000 balance,and a school loan with a balance of $6,000.What is Jessie's current net worth? (a)$62,800 (b)$46,800 (c)($242,800) (d)($62,800)

________ is the process of forecasting future expenses and savings.

By establishing high and unrealistic financial goals,you will probably

Goals with a time frame of between one and five years are classified as

Match the goals with the following: 1.short-term goal (a)To retire in 25 years 2.intermediate goal (b)To purchase a home in three years 3.long-term goal (c)To save enough money for books and tuition for next term

In addition to the text,Web sites and financial magazines are good sources for additional help in financial planning.

Which of the following items is not a liability?