Question 1

Which of the following are not considered part of the financial plan?

Accepted Answer

A) Tax planning 
B) Investment planning 
C) Capital budgeting 
D) Risk Management 
E) Employee benefits

Question 2

Which of the following issues can be categorized as a consumption and savings issue?

Accepted Answer

A) The need to resolve a debt problem. 
B) The desire to improve investment returns. 
C) Discomfort with the current risk profile. 
D) All of the above. 
E) None of the above.

Question 3

Which of the following statements about personal financial planning is inaccurate?

Accepted Answer

A) Personal financial planning is used by people to anticipate and plot their future actions to reach their goals. 
B) Personal financial planning is used to solve a problem or to structure a plan for the future. 
C) Personal financial planning is the analysis and decision-making extension of personal finance. 
D) All of the above statements are accurate. 
E) None of the above statements are accurate.

Question 4

Planning for yourself and others while you are alive,and for current and former members of your household and other people or institutions upon your death,is designated:

Accepted Answer

A) Special circumstances planning 
B) Retirement planning 
C) Estate planning 
D) Cash flow planning 
E) Investment planning

Question 5

Risk management is best defined as:

Accepted Answer

A) The uncertainty of outcomes. 
B) The process of controlling the level of household risk. 
C) The activity of minimizing household risk. 
D) The risk of minimizing the household's activity. 
E) The outcome of uncertainty.

Question 6

What is the goal of cash flow planning?

Accepted Answer

A) To plan income and expense flows so that work,cost of living,savings and investment and financing issues interact in an optimal way to provide the highest returns possible. 
B) To minimize payments to the government. 
C) To enable our net cash flows to grow as rapidly as possible,subject to our tolerance for risk. 
D) To present a current picture of the household's financial condition. 
E) None of the above.

Question 7

Outline the origins of personal financial planning.Your outline should include details regarding finance tools,other disciplines used in financial planning,personal finance categories,and the parts of personal financial planning.

Accepted Answer

The answer of Outline the origins of personal financial planning.Your...

Question 8

Which of the following best defines personal finance?

Accepted Answer

A) The study of how people minimize risk for a given level of return 
B) The study of how people maximize return for a given level of risk 
C) The study of how people develop the cash flows necessary to support their operations and provide for their well-being 
D) The study of how ethics should influence financial management decisions 
E) The study of how people maximize risk for a given level of return

Question 9

Which of the following is not a personal finance issue?

Accepted Answer

A) Consumption and savings 
B) Risk management 
C) Investments 
D) Financing 
E) All of the above are personal finance issues

Question 10

Which of the following is not a finance tool?

Accepted Answer

A) Time value of money 
B) Cash flow analysis 
C) Investment models of behavior 
D) Optimization 
E) All of the above are finance tools

Question 11

Which of the following characterizes personal financial planning services before 1970?

Accepted Answer

A) It was widely available to the general population. 
B) It was primarily available to the very wealthy. 
C) It primarily focused on tax issues. 
D) It primarily focused on insurance issues. 
E) None of the above characterizes personal financial planning services before 1970.

Question 12

The underlying goal of a household when making personal financial planning decisions is to:

Accepted Answer

A) Minimize expenditures 
B) Minimize risk 
C) Maximize cash inflows 
D) Maximize leisure time 
E) Maximize standard of living

Exam 1: Introduction to PFP