Question 1

Future value computations are also referred to as

Accepted Answer

A)   Discounting.
B)   Add-on interest.
C)   Compounding.
D)   Simple interest.
E)   An annuity.F) A) and D)
G) B) and E)

Question 2

If inflation is expected to be 9 percent,how long will it take for prices to double?

Accepted Answer

A)   6 years
B)   7 years
C)   8 years
D)   12 years
E)   18 yearsF) B) and D)
G) B) and C)

Question 3

Fran Gardner has a goal of "saving $25 per month for a TV".Fran's goal lacks

Accepted Answer

A)   Measurable terms
B)   A realistic perspective
C)   An action-orientation
D)   A specific objective
E)   A time frameF) B) and C)
G) None of the above

Question 4

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Accepted Answer

A)   Sharing
B)   Savings
C)   Obtaining
D)   Borrowing
E)   ProtectingF) A) and D)
G) A) and B)

Question 5

The uncertainty associated with decision making is referred to as

Accepted Answer

A)   Opportunity cost.
B)   Selection of alternatives.
C)   Financial goals.
D)   Personal values.
E)   Risk.F) D) and E)
G) B) and C)

Question 6

Which of the following short-term goals is stated most clearly?

Accepted Answer

A)  Buy a car for less than $17,000 within 6 months
B)  Retire in 10 years at age 65 with $2,000,000 in my 401(k) account
C)  Purchase a house with a mortgage no greater than $150,000 within 5 years
D)  Set up an emergency fund
E)  Invest $50 per month for the next 18 years for my nephew's college fundF) A) and C)
G) B) and E)

Question 7

The changing cost of money is referred to as ____________ risk.

Accepted Answer

A)   interest-rate
B)   inflation
C)   income
D)   liquidity
E)   personalF) C) and E)
G) All of the above

Question 8

Personal financial planning is the process of managing your money to achieve personal economic satisfaction.

Accepted Answer

A) True 
 B)False

Question 9

Financial Plans are only created by financial planners.

Accepted Answer

A) True 
 B)False

Question 10

Who is most likely to benefit by inflation?

Accepted Answer

A)   Retired people
B)   Lenders
C)   Borrowers
D)   Low-income consumers
E)   GovernmentF) B) and D)
G) C) and D)

Question 11

Why might a goal regarding use of leisure time be important to include in a financial plan?

Accepted Answer

Leisure goals,such as developing a hobby...

Question 12

An example of a personal opportunity cost would be

Accepted Answer

A)   Interest lost by using savings to make a purchase.
B)   Higher earnings on savings that must be kept on deposit a minimum of six months.
C)   Lost wages due to continuing as a full-time student.
D)   Time comparing several brands of personal computers.
E)   Having to pay a tax penalty due to not having enough withheld from your monthly salary.F) B) and D)
G) A) and C) D

Question 13

Many Americans have money problems because of

Accepted Answer

A)   Poor planning and weak money management habits
B)   Too many clearly defined goals
C)   Proper use of credit
D)   Not enough advertising to make effective decisions
E)   Controlled spendingF) A) and B)
G) B) and E)

Question 14

Who can benefit from financial planning?
 How?

Accepted Answer

Answers can vary but should consider lif...

Question 15

Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 years,so he can purchase a used car at that time.What type of computation would he use to determine the amount he will have for his purchase?

Accepted Answer

A)   Present value of a single amount
B)   Future value of a single amount
C)   Simple interest
D)   Present value of an annuity
E)   Future value of an annuityF) A) and B)
G) A) and C)

Question 16

Attempts to increase income are part of the _____________ component of financial planning.

Accepted Answer

A)   Obtaining
B)   Planning
C)   Saving
D)   Borrowing
E)   SpendingF) B) and D)
G) C) and E)

Question 17

The time value of money refers to

Accepted Answer

A)   Personal opportunity costs such as time lost on an activity.
B)   Financial decisions that require borrowing funds from a financial institution.
C)   Changes in interest rates due to changes in the supply and demand for money in our economy.
D)   Increases in an amount of money as a result of interest earned.
E)   Changing demographic trends in our society.F) B) and C)
G) A) and E)

Question 18

Provide an example of a clear financial goal.Identify if it is a short-term,intermediate,or long-term goal.

Accepted Answer

Answers will vary by student.Each goal should take a SMART approach: state a specific objective,measurable with a specific amount,action-oriented,realistic for your income and life situation,and based on a time frame.
Short-term goals should be achieved within the next year or so while intermediate goals have a time frame of 2 to 5 years,and long-term goals will take more than 5 years to accomplish.

Question 19

Which of the following intermediate goals is stated most clearly?

Accepted Answer

A)  Buy a car for less than $17,000 within 6 months
B)  Retire in 10 years at age 65 with $2,000,000 in my 401(k) account
C)  Purchase a house with a mortgage no greater than $150,000 within 3 years
D)  Set up an emergency fund
E)  Invest $50 per month for the next 18 years for my nephew's college fundF) C) and E)
G) A) and E) C

Question 20

Interest earned is calculated by multiplying the principal times the opportunity cost.

Accepted Answer

A) True 
 B)False

Exam 1: Personal Financial Planning in Action

Future value computations are also referred to as

Correct Answer
verified

If inflation is expected to be 9 percent,how long will it take for prices to double?

Correct Answer
verified

Fran Gardner has a goal of "saving $25 per month for a TV".Fran's goal lacks

Correct Answer
verified

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Correct Answer
verified

The uncertainty associated with decision making is referred to as

Correct Answer
verified

Which of the following short-term goals is stated most clearly?

Correct Answer
verified

The changing cost of money is referred to as ____________ risk.

Correct Answer
verified

Personal financial planning is the process of managing your money to achieve personal economic satisfaction.

Correct Answer
verified

Financial Plans are only created by financial planners.

Correct Answer
verified

Who is most likely to benefit by inflation?

Correct Answer
verified

Why might a goal regarding use of leisure time be important to include in a financial plan?

Correct Answer
verified
Leisure goals,such as developing a hobby...
View Answer

An example of a personal opportunity cost would be

Correct Answer
verified
D

Many Americans have money problems because of

Correct Answer
verified

Who can benefit from financial planning? How?

Correct Answer
verified
Answers can vary but should consider lif...
View Answer

Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 years,so he can purchase a used car at that time.What type of computation would he use to determine the amount he will have for his purchase?

Correct Answer
verified

Attempts to increase income are part of the _____________ component of financial planning.

Correct Answer
verified

The time value of money refers to

Correct Answer
verified

Provide an example of a clear financial goal.Identify if it is a short-term,intermediate,or long-term goal.

Which of the following intermediate goals is stated most clearly?

Correct Answer
verified
C

Interest earned is calculated by multiplying the principal times the opportunity cost.

Correct Answer
verified

Exam 1: Personal Financial Planning in Action

Future value computations are also referred to as

Correct AnswerverifiedShow Answer

If inflation is expected to be 9 percent,how long will it take for prices to double?

Correct AnswerverifiedShow Answer

Fran Gardner has a goal of "saving $25 per month for a TV".Fran's goal lacks

Correct AnswerverifiedShow Answer

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Correct AnswerverifiedShow Answer

The uncertainty associated with decision making is referred to as

Correct AnswerverifiedShow Answer

Which of the following short-term goals is stated most clearly?

Correct AnswerverifiedShow Answer

The changing cost of money is referred to as ____________ risk.

Correct AnswerverifiedShow Answer

Personal financial planning is the process of managing your money to achieve personal economic satisfaction.

Correct AnswerverifiedShow Answer

Financial Plans are only created by financial planners.

Correct AnswerverifiedShow Answer

Who is most likely to benefit by inflation?

Correct AnswerverifiedShow Answer

Why might a goal regarding use of leisure time be important to include in a financial plan?

Correct AnswerverifiedLeisure goals,such as developing a hobby...View AnswerShow Answer

An example of a personal opportunity cost would be

Correct AnswerverifiedD

Many Americans have money problems because of

Correct AnswerverifiedShow Answer

Who can benefit from financial planning? How?

Correct AnswerverifiedAnswers can vary but should consider lif...View AnswerShow Answer

Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 years,so he can purchase a used car at that time.What type of computation would he use to determine the amount he will have for his purchase?

Correct AnswerverifiedShow Answer

Attempts to increase income are part of the _____________ component of financial planning.

Correct AnswerverifiedShow Answer

The time value of money refers to

Correct AnswerverifiedShow Answer

Provide an example of a clear financial goal.Identify if it is a short-term,intermediate,or long-term goal.

Which of the following intermediate goals is stated most clearly?

Correct AnswerverifiedC

Interest earned is calculated by multiplying the principal times the opportunity cost.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Leisure goals,such as developing a hobby...
View Answer

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified
Answers can vary but should consider lif...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified