Question 1

An understanding of personal finance is not necessary to judge the quality of advice that a financial adviser may give.

Accepted Answer

A) True 
 B)False  False

Question 2

If your income exceeds the amount you spend,you should ________ your investments or ________ loans.

Accepted Answer

A)  reduce; repay existing 
B)  reduce; obtain more 
C)  increase; repay existing 
D)  increase; obtain more 
A)  reduce; repay existing 
B)  reduce; obtain more 
C)  increase; repay existing 
D)  increase; obtain more C

Question 3

Which of the following items is not a liability?

Accepted Answer

A)  The balance due on your credit card 
B)  Your college loans 
C)  The wages you give up to take a class 
D)  An IOU to your roommate 
A)  The balance due on your credit card 
B)  Your college loans 
C)  The wages you give up to take a class 
D)  An IOU to your roommate C

Question 4

When estimating expenses for a budget,

Accepted Answer

A)  last month's and last year's expenses are not a good starting point. 
B)  many of the same expenses do not occur each month. 
C)  large unusual expenses such as car or hospital bills should be included. 
D)  estimating your future assets is a good starting point. 
A)  last month's and last year's expenses are not a good starting point. 
B)  many of the same expenses do not occur each month. 
C)  large unusual expenses such as car or hospital bills should be included. 
D)  estimating your future assets is a good starting point.

Question 5

Which of the following would be classified as a short-term goal?

Accepted Answer

A)  Purchasing a house in three years 
B)  Buying new clothes this month 
C)  Retiring in ten years 
D)  Paying for your two-year-old child's college education 
A)  Purchasing a house in three years 
B)  Buying new clothes this month 
C)  Retiring in ten years 
D)  Paying for your two-year-old child's college education

Question 6

Your decision about one component of your financial plan can affect all other components.Which statement is true?

Accepted Answer

A)  The amount of insurance you choose to carry has no effect on your investing decisions. 
B)  There will never be any trade-offs to consider when making decisions about your financial plan. 
C)  If you make poor investment decisions, you may have to work longer than planned. 
D)  You should contribute all of your extra money to your retirement account even if it means you don't have money available for products and services today. 
A)  The amount of insurance you choose to carry has no effect on your investing decisions. 
B)  There will never be any trade-offs to consider when making decisions about your financial plan. 
C)  If you make poor investment decisions, you may have to work longer than planned. 
D)  You should contribute all of your extra money to your retirement account even if it means you don't have money available for products and services today.

Question 7

Why is it important to monitor and revise your financial plan from time to time?

Accepted Answer

A)  Your financial position changes over time as does your personal, job and family situation 
B)  As you get older you will want to lower your goals 
C)  So that you remember the goals you were striving for 
D)  You may decide enjoying consumption now is more important than saving for retirement years 
A)  Your financial position changes over time as does your personal, job and family situation 
B)  As you get older you will want to lower your goals 
C)  So that you remember the goals you were striving for 
D)  You may decide enjoying consumption now is more important than saving for retirement years

Question 8

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?

Accepted Answer

A)  $62,800 
B)  $46,800 
C)  ($242,800) 
D)  ($62,800) 
A)  $62,800 
B)  $46,800 
C)  ($242,800) 
D)  ($62,800)

Question 9

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

Accepted Answer

The answer of Your ability to access funds to cover...

Question 10

Which of the following is not a relevant consideration when identifying alternatives for achieving your financial goals?

Accepted Answer

A)  Choosing a large versus small university 
B)  Pursuing additional education 
C)  Choosing a state versus private university 
D)  Choosing a major for study that enhances earning power 
A)  Choosing a large versus small university 
B)  Pursuing additional education 
C)  Choosing a state versus private university 
D)  Choosing a major for study that enhances earning power

Question 11

A worker making $20 per hour decides to take a day of unpaid leave from work to attend a graduation ceremony. The worker ordinarily works and 8-hour day and is subjected to a total tax rate of 20%.What is the worker's total opportunity cost from the day of unpaid leave?

Accepted Answer

A)  $8.00 
B)  $128.00 
C)  $112.00 
D)  $160.00 
A)  $8.00 
B)  $128.00 
C)  $112.00 
D)  $160.00

Question 12

Since career choices affect your income,you should choose the career that

Accepted Answer

A)  that pays the highest salary even if you dislike the work. 
B)  that will be enjoyable and will suit your skills. 
C)  that will be the easiest to find employment in. 
D)  that requires the least amount of training or education so you can begin working as quickly as possible. 
A)  that pays the highest salary even if you dislike the work. 
B)  that will be enjoyable and will suit your skills. 
C)  that will be the easiest to find employment in. 
D)  that requires the least amount of training or education so you can begin working as quickly as possible.

Question 13

Which of the following is not a decision involved in managing your liquidity?

Accepted Answer

A)  Deciding how much money to keep in savings 
B)  Choosing between credit cards 
C)  Determining how much money to save versus how much to spend 
D)  Building and maintaining a monthly/yearly budget with allocations to expenses and investments 
A)  Deciding how much money to keep in savings 
B)  Choosing between credit cards 
C)  Determining how much money to save versus how much to spend 
D)  Building and maintaining a monthly/yearly budget with allocations to expenses and investments

Question 14

Which of the following goals would be easiest to measure?

Accepted Answer

A)  Reduce debt payments 
B)  Save funds for an annual vacation 
C)  Save $100 a month to create a $4,000 emergency fund 
D)  Invest for a comfortable retirement 
A)  Reduce debt payments 
B)  Save funds for an annual vacation 
C)  Save $100 a month to create a $4,000 emergency fund 
D)  Invest for a comfortable retirement

Question 15

Your net worth will not be increased by which of the following actions?

Accepted Answer

A)  Increasing your savings from 10% to 15% of your earnings 
B)  Receiving a $100 birthday present from your grandmother 
C)  Buying a new home entertainment system and putting the entire amount on your credit card 
D)  Receiving an inheritance 
A)  Increasing your savings from 10% to 15% of your earnings 
B)  Receiving a $100 birthday present from your grandmother 
C)  Buying a new home entertainment system and putting the entire amount on your credit card 
D)  Receiving an inheritance

Question 16

Goals with a time frame of five or more years into the future are called intermediate-term goals.

Accepted Answer

A) True 
 B)False

Question 17

Retirement planning should take place

Accepted Answer

A)  when you retire. 
B)  shortly after you retire. 
C)  well before you retire. 
D)  at any time. 
A)  when you retire. 
B)  shortly after you retire. 
C)  well before you retire. 
D)  at any time.

Question 18

A plan for ________ is needed to determine how much you could afford to borrow,the length of the loan,and how to select a loan that charges competitive interest rates.

Accepted Answer

A)  buying 
B)  financing 
C)  spending 
D)  saving 
A)  buying 
B)  financing 
C)  spending 
D)  saving

Question 19

From a financial standpoint when should a person start retirement planning and saving?

Accepted Answer

A)  When he or she first starts receiving a salary 
B)  At 45-50 years of age 
C)  At 50-55 years of age 
D)  At 55-60 years of age 
A)  When he or she first starts receiving a salary 
B)  At 45-50 years of age 
C)  At 50-55 years of age 
D)  At 55-60 years of age

Question 20

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

Accepted Answer

A) determining how your wealth will be distributed before or upon your death 
B) what you owe 
C) forecasting future expenses and savings 
D) source of current information about a variety of topics 
E) value of what you on minus what you owe
F)determining how much money you should set aside for retirement
G)access to funds to cover any short-term cash deficiencies
H)uncertainty on a potential return on an investment
I)decisions regarding how much money to hold in liquid form and how to allocate funds among short term investments
J)what you own 
A) determining how your wealth will be distributed before or upon your death 
B) what you owe 
C) forecasting future expenses and savings 
D) source of current information about a variety of topics 
E) value of what you on minus what you owe
F)determining how much money you should set aside for retirement
G)access to funds to cover any short-term cash deficiencies
H)uncertainty on a potential return on an investment
I)decisions regarding how much money to hold in liquid form and how to allocate funds among short term investments
J)what you own

An understanding of personal finance is not necessary to judge the quality of advice that a financial adviser may give.

If your income exceeds the amount you spend,you should your investments or loans.

Which of the following items is not a liability?

When estimating expenses for a budget,

Which of the following would be classified as a short-term goal?

Your decision about one component of your financial plan can affect all other components.Which statement is true?

Why is it important to monitor and revise your financial plan from time to time?

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

Which of the following is not a relevant consideration when identifying alternatives for achieving your financial goals?

A worker making $20 per hour decides to take a day of unpaid leave from work to attend a graduation ceremony. The worker ordinarily works and 8-hour day and is subjected to a total tax rate of 20%.What is the worker's total opportunity cost from the day of unpaid leave?

Since career choices affect your income,you should choose the career that

Which of the following is not a decision involved in managing your liquidity?

Which of the following goals would be easiest to measure?

Your net worth will not be increased by which of the following actions?

Goals with a time frame of five or more years into the future are called intermediate-term goals.

Retirement planning should take place

A plan for ________ is needed to determine how much you could afford to borrow,the length of the loan,and how to select a loan that charges competitive interest rates.

From a financial standpoint when should a person start retirement planning and saving?

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

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

Integrating the Components of a Financial Plan

Filters

Exam 1: Overview of a Financial Plan

An understanding of personal finance is not necessary to judge the quality of advice that a financial adviser may give.

If your income exceeds the amount you spend,you should ________ your investments or ________ loans.

Which of the following items is not a liability?

When estimating expenses for a budget,

Which of the following would be classified as a short-term goal?

Your decision about one component of your financial plan can affect all other components.Which statement is true?

Why is it important to monitor and revise your financial plan from time to time?

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

Which of the following is not a relevant consideration when identifying alternatives for achieving your financial goals?

A worker making $20 per hour decides to take a day of unpaid leave from work to attend a graduation ceremony. The worker ordinarily works and 8-hour day and is subjected to a total tax rate of 20%.What is the worker's total opportunity cost from the day of unpaid leave?

Since career choices affect your income,you should choose the career that

Which of the following is not a decision involved in managing your liquidity?

Which of the following goals would be easiest to measure?

Your net worth will not be increased by which of the following actions?

Goals with a time frame of five or more years into the future are called intermediate-term goals.

Retirement planning should take place

A plan for ________ is needed to determine how much you could afford to borrow,the length of the loan,and how to select a loan that charges competitive interest rates.

From a financial standpoint when should a person start retirement planning and saving?

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

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

Integrating the Components of a Financial Plan

Filters

If your income exceeds the amount you spend,you should your investments or loans.