Question 1

As time passes,your financial position and goals are likely to change so you will need to revise your financial plan.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following best explains why some consumers have difficulty creating and sticking to a budget?

Accepted Answer

A)  They don't make enough money. 
B)  They can't determine their cash outflows. 
C)  They spend excessively due to the need for immediate satisfaction. 
D)  They have difficulty making decisions about their financing. 
A)  They don't make enough money. 
B)  They can't determine their cash outflows. 
C)  They spend excessively due to the need for immediate satisfaction. 
D)  They have difficulty making decisions about their financing.

Question 3

Name three ways to protect and maintain your wealth and assets and maintain your standard of living.

Accepted Answer

Insurance policies,diversifica

Question 4

Liquid assets usually generate

Accepted Answer

A)  high returns. 
B)  returns like stocks. 
C)  returns like bonds. 
D)  lower returns. 
A)  high returns. 
B)  returns like stocks. 
C)  returns like bonds. 
D)  lower returns.

Question 5

Which of the following investments achieves the greatest diversification?

Accepted Answer

A)  Stocks 
B)  Bonds 
C)  Mutual funds 
D)  Savings accounts 
A)  Stocks 
B)  Bonds 
C)  Mutual funds 
D)  Savings accounts

Question 6

A budget is not intended to help you determine

Accepted Answer

A)  how much money you will have at the end of each month. 
B)  a plan for spending all of your income on current needs. 
C)  how much you can allocate for the future. 
D)  how to prevent excessive spending to achieve financial goals. 
A)  how much money you will have at the end of each month. 
B)  a plan for spending all of your income on current needs. 
C)  how much you can allocate for the future. 
D)  how to prevent excessive spending to achieve financial goals.

Question 7

The more you spend,the less money you will have available for liquidity purposes or to make investments or to save for retirement.

Accepted Answer

A) True 
 B)False

Question 8

A home equity loan may do all of the following except

Accepted Answer

A)  give you a tax deduction if you itemize. 
B)  increase your current purchasing power. 
C)  increase your spending in the future. 
D)  prevent you from achieving your financial goals. 
A)  give you a tax deduction if you itemize. 
B)  increase your current purchasing power. 
C)  increase your spending in the future. 
D)  prevent you from achieving your financial goals.

Question 9

Financial statements include all of the following except a(n)

Accepted Answer

A)  balance sheet. 
B)  income statement. 
C)  cash flow statement. 
D)  asset allocation statement. 
A)  balance sheet. 
B)  income statement. 
C)  cash flow statement. 
D)  asset allocation statement.

Question 10

Assume that you set aside $500 per year,and invest that money over the next five years in an account earning 6%.What is the amount of interest you will earn on this investment?

Accepted Answer

A)  $300 
B)  $319 
C)  $263 
D)  $250 
A)  $300 
B)  $319 
C)  $263 
D)  $250

Question 11

Most people set financial goals early in life and these goals rarely change.

Accepted Answer

A) True 
 B)False

Question 12

Which component of a financial plan affects all the other components of the financial plan?

Accepted Answer

A)  Budgeting 
B)  Retirement planning 
C)  Investing 
D)  Estate planning 
A)  Budgeting 
B)  Retirement planning 
C)  Investing 
D)  Estate planning

Question 13

A financial plan should be

Accepted Answer

A)  prepared when you graduate from college and carefully followed thereafter without changes. 
B)  prepared when you graduate from college and carefully followed until you retire when you will no longer need one. 
C)  prepared when you graduate from college and reviewed/adjusted as events such as marriage, job changes, birth of children, and retirement necessitate. 
D)  prepared only in a rough outline as it will change too often to make anything more detailed feasible. 
A)  prepared when you graduate from college and carefully followed thereafter without changes. 
B)  prepared when you graduate from college and carefully followed until you retire when you will no longer need one. 
C)  prepared when you graduate from college and reviewed/adjusted as events such as marriage, job changes, birth of children, and retirement necessitate. 
D)  prepared only in a rough outline as it will change too often to make anything more detailed feasible.

Question 14

Use the following two columns of items to answer the matching questions below:
-insurance

Accepted Answer

A) asset and income protection 
B) a place to store your financial documents 
C) a loan to purchase a home or condominium 
D) amount saved for the future 
A) asset and income protection 
B) a place to store your financial documents 
C) a loan to purchase a home or condominium 
D) amount saved for the future

Question 15

Which of the following should you do first?

Accepted Answer

A)  Invest in liquid assets 
B)  Pay off loans 
C)  Buy insurance 
D)  Make investments 
A)  Invest in liquid assets 
B)  Pay off loans 
C)  Buy insurance 
D)  Make investments

Question 16

What are three types of financing you have studied?

Accepted Answer

Credit cards,personal loans,mo

Question 17

You should invest in ________ if you need periodic income.

Accepted Answer

bonds or d

Question 18

Investing in stocks of large,well-known firms may enhance your liquidity,but typically these investments do not generate as high a return as stocks of smaller firms.

Accepted Answer

A) True 
 B)False

Question 19

If you are a high-income individual,you should not invest in

Accepted Answer

A)  stocks that pay cash dividends. 
B)  growth stocks. 
C)  municipal bonds. 
D)  global mutual funds. 
A)  stocks that pay cash dividends. 
B)  growth stocks. 
C)  municipal bonds. 
D)  global mutual funds.

Question 20

Bill and Jan are reviewing their current financial plan.They have decided that it is time obtain life insurance and begin contributing to an investment fund for college.Bill and Jan are

Accepted Answer

A)  a young, dual-income couple with no children. 
B)  young and single. 
C)  a young couple with children under the age of 18. 
D)  an older couple with no dependent children living at home. 
A)  a young, dual-income couple with no children. 
B)  young and single. 
C)  a young couple with children under the age of 18. 
D)  an older couple with no dependent children living at home.

Exam 21: Integrating the Components of a Financial Plan

As time passes,your financial position and goals are likely to change so you will need to revise your financial plan.

Which of the following best explains why some consumers have difficulty creating and sticking to a budget?

Name three ways to protect and maintain your wealth and assets and maintain your standard of living.

Liquid assets usually generate

Which of the following investments achieves the greatest diversification?

A budget is not intended to help you determine

The more you spend,the less money you will have available for liquidity purposes or to make investments or to save for retirement.

A home equity loan may do all of the following except

Financial statements include all of the following except a(n)

Assume that you set aside $500 per year,and invest that money over the next five years in an account earning 6%.What is the amount of interest you will earn on this investment?

Most people set financial goals early in life and these goals rarely change.

Which component of a financial plan affects all the other components of the financial plan?

A financial plan should be

Use the following two columns of items to answer the matching questions below: -insurance

Which of the following should you do first?

What are three types of financing you have studied?

You should invest in ________ if you need periodic income.

Investing in stocks of large,well-known firms may enhance your liquidity,but typically these investments do not generate as high a return as stocks of smaller firms.

If you are a high-income individual,you should not invest in

Bill and Jan are reviewing their current financial plan.They have decided that it is time obtain life insurance and begin contributing to an investment fund for college.Bill and Jan are

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

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