Question 1

If you save monthly for retirement,which of the following would be used to determine how much you would ultimately have in your retirement account?

Accepted Answer

A) Present value of an annuity 
B) Future value of an annuity 
C) Present value of $1 
D) Standard deviation

Question 2

Which of the following investments achieves the greatest diversification?

Accepted Answer

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

Question 3

Monitoring liquidity does not include tracking

Accepted Answer

A) bank account balances. 
B) money market securities. 
C) certificates of deposit. 
D) bond mutual funds.

Question 4

Key documents for managing investments include all but

Accepted Answer

A) retirement plan balances. 
B) account balance showing the market value of mutual funds. 
C) insurance policies. 
D) stock certificates.

Question 5

You may want to make additional loan payments if the interest rate you are paying is higher than you could obtain from an investment.

Accepted Answer

A) True 
 B)False

Question 6

The purpose of financial planning is to help do all of the following except

Accepted Answer

A) set goals. 
B) increase your spending. 
C) become financially educated. 
D) increase wealth or net worth.

Question 7

It is not possible to have too much insurance coverage.

Accepted Answer

A) True 
 B)False

Question 8

If you have enough liquidity,you should either obtain short-term financing or sell assets.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Some retirement plans,such as Roth IRAs,are more liquid than other plans.

Accepted Answer

A) True 
 B)False

Question 11

The purpose of insurance is to protect your

Accepted Answer

A) liabilities and expenses. 
B) assets and liabilities. 
C) assets and net worth. 
D) income and expenses.

Question 12

Disability insurance protects your ________ first and your ________ second.

Accepted Answer

A) liabilities; expenses 
B) income; assets 
C) expenses; assets 
D) expenses; net worth

Question 13

One advantage of financing with a mortgage or using a home equity loan is that the interest payments are

Accepted Answer

A) at below market rates. 
B) tax-deductible. 
C) for an asset. 
D) the largest part of the payment.

Question 14

What is the disadvantage of retirement investments compared to other investments?

Accepted Answer

A) Low returns 
B) Low liquidity 
C) High risk 
D) Low risk

Question 15

It is easier to make monthly loan payments if you select financing that has relatively ________ maturities.

Accepted Answer

The answer of It is easier to make monthly loan...

Question 16

You should make investments only after you have sufficient liquidity and sufficient insurance to protect your existing assets.

Accepted Answer

A) True 
 B)False

Question 17

Budgeting allows you to forecast how much money you will have at the end of each month so that you can determine how much you will be able to invest in assets.

Accepted Answer

A) True 
 B)False

Question 18

Personal financing does not

Accepted Answer

A) allow you to make purchases without having the full amount of cash on hand. 
B) increase the amount of your assets. 
C) prove useful for large purchases. 
D) help in increasing your ability to save.

Question 19

Which of the following assets will not increase your liquidity?

Accepted Answer

A) Checking account 
B) Money market mutual fund 
C) Cash in a Roth IRA 
D) Cash in your wallet

Question 20

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.

Exam 21: Integrating the Components of a Financial Plan

If you save monthly for retirement,which of the following would be used to determine how much you would ultimately have in your retirement account?

Which of the following investments achieves the greatest diversification?

Monitoring liquidity does not include tracking

Key documents for managing investments include all but

You may want to make additional loan payments if the interest rate you are paying is higher than you could obtain from an investment.

The purpose of financial planning is to help do all of the following except

It is not possible to have too much insurance coverage.

If you have enough liquidity,you should either obtain short-term financing or sell assets.

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

Some retirement plans,such as Roth IRAs,are more liquid than other plans.

The purpose of insurance is to protect your

Disability insurance protects your first and your second.

One advantage of financing with a mortgage or using a home equity loan is that the interest payments are

What is the disadvantage of retirement investments compared to other investments?

It is easier to make monthly loan payments if you select financing that has relatively ________ maturities.

You should make investments only after you have sufficient liquidity and sufficient insurance to protect your existing assets.

Budgeting allows you to forecast how much money you will have at the end of each month so that you can determine how much you will be able to invest in assets.

Personal financing does not

Which of the following assets will not increase your liquidity?

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