Question 1

The risk premium you receive as a saver is based:

Accepted Answer

A)  on your credit rating.
B)  on the amount of money you are borrowing.
C)  only on the uncertainty associated with getting your money back.
D)  only on the expected rate of inflation.
E)  in part on the uncertainty associated with getting your money back and the expected rate of inflation.F) A) and C)
G) C) and E)

Question 2

The problem of bankruptcy is associated with misuse of credit in the ______________ component of financial planning.

Accepted Answer

A)  sharing
B)  saving
C)  obtaining
D)  borrowing
E)  protectingF) All of the above
G) D) and E)

Question 3

Explain why borrowers benefit more than lenders in times of high inflation.

Accepted Answer

Inflation can also adversely affect lend...

Question 4

The advantages of personal financial planning include:

Accepted Answer

A)   Increased effectiveness in obtaining, using and protecting your financial resources
B)  Increased control of your financial affairs by avoiding excessive debt and bankruptcy
C)  Improved personal relationships resulting from better communicated financial decisions
D)  All of these
E)  None of theseF) A) and B)
G) All of the above

Question 5

Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.

Accepted Answer

Financial Goals should be spec...

Question 6

Increased consumer spending will usually cause:

Accepted Answer

A)  lower consumer prices.
B)  reduced employment levels.
C)  lower tax revenues.
D)  lower interest rates.
E)  higher employment levels.F) A) and B)
G) C) and D)

Question 7

Lynn Roy's goal has been to travel around the world.She has now been traveling for six months and she has decided she is a little tired of living out of a suitcase.She has decided to go home,look for a part time job and take shorter trips to locations around the world that appeal to her.Which step in the financial planning process does this scenario most likely demonstrate?

Accepted Answer

A)  Developing her financial goals
B)  Identifying alternative courses of action
C)  Evaluating her alternatives
D)  Implementing her financial plan
E)  Reviewing and revising her financial planF) B) and E)
G) A) and D)

Question 8

Planning to buy a car is an example of an intangible goal.

Accepted Answer

A) True 
 B)False

Question 9

Economics is the study of using money to achieve financial goals.

Accepted Answer

A) True 
 B)False

Question 10

Developing and using a budget is part of the "obtaining" component of financial planning.

Accepted Answer

A) True 
 B)False

Question 11

The amount of interest is determined by multiplying the amount in savings by the:

Accepted Answer

A)  annual interest rate.
B)  time period.
C)  number of months in a year.
D)  time period and number of months.
E)  annual interest rate and the time period.F) A) and E)
G) B) and E)

Question 12

The financial planning process concludes with efforts to:

Accepted Answer

A)  develop financial goals.
B)  create a financial action plan.
C)  determine your current financial situation.
D)  implement the financial action plan.
E)  review and revise your financial plan.F) A) and E)
G) A) and B)

Question 13

Melanie Walsh likes to go to the movies once a week.When she is at the movies,she generally gets a large popcorn and a drink.Melanie wants to be sure that she sets aside money each week so she can continue going to the movies.What type of goal would this be for Melanie?

Accepted Answer

A)  Consumable-product goal
B)  Durable-product goal
C)  Intangible goal
D)  Intermediate goal
E)  Long term goalF) A) and B)
G) All of the above

Question 14

You are planning to buy a house in five years.How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

Accepted Answer

A)  $6,000
B)  $6,590
C)  $7,470
D)  $9,400
E)  $10,000F) B) and E)
G) A) and B)

Question 15

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) B) and E)

Question 16

Developing financial goals is the ______ step in the financial planning process.

Accepted Answer

A)  first
B)  second
C)  third
D)  fourth
E)  fifthF) A) and B)
G) A) and C)

Exam 1: Personal Finance Basics and the Time Value of Money

The risk premium you receive as a saver is based:

Correct Answer
verified

The advantages of personal financial planning include:

Correct Answer
verified

Increased consumer spending will usually cause:

Correct Answer
verified

An example of a personal opportunity cost would be:

Correct Answer
verified

The amount of interest is determined by multiplying the amount in savings by the:

Correct Answer
verified

The problem of bankruptcy is associated with misuse of credit in the ______________ component of financial planning.

Correct Answer
verified

The financial planning process concludes with efforts to:

Correct Answer
verified

Economics is the study of using money to achieve financial goals.

Correct Answer
verified

Planning to buy a car is an example of an intangible goal.

Correct Answer
verified

You are planning to buy a house in five years.How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

Correct Answer
verified

Melanie Walsh likes to go to the movies once a week.When she is at the movies,she generally gets a large popcorn and a drink.Melanie wants to be sure that she sets aside money each week so she can continue going to the movies.What type of goal would this be for Melanie?

Correct Answer
verified

Developing and using a budget is part of the "obtaining" component of financial planning.

Correct Answer
verified

Explain why borrowers benefit more than lenders in times of high inflation.

Correct Answer
verified
Inflation can also adversely affect lend...
View Answer

Developing financial goals is the ______ step in the financial planning process.

Correct Answer
verified

Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.

Correct Answer
verified
Financial Goals should be spec...
View Answer

Correct Answer
verified

Exam 1: Personal Finance Basics and the Time Value of Money

The risk premium you receive as a saver is based:

Correct AnswerverifiedShow Answer

The advantages of personal financial planning include:

Correct AnswerverifiedShow Answer

Increased consumer spending will usually cause:

Correct AnswerverifiedShow Answer

An example of a personal opportunity cost would be:

Correct AnswerverifiedShow Answer

The amount of interest is determined by multiplying the amount in savings by the:

Correct AnswerverifiedShow Answer

The problem of bankruptcy is associated with misuse of credit in the ______________ component of financial planning.

Correct AnswerverifiedShow Answer

The financial planning process concludes with efforts to:

Correct AnswerverifiedShow Answer

Economics is the study of using money to achieve financial goals.

Correct AnswerverifiedShow Answer

Planning to buy a car is an example of an intangible goal.

Correct AnswerverifiedShow Answer

You are planning to buy a house in five years.How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

Correct AnswerverifiedShow Answer

Melanie Walsh likes to go to the movies once a week.When she is at the movies,she generally gets a large popcorn and a drink.Melanie wants to be sure that she sets aside money each week so she can continue going to the movies.What type of goal would this be for Melanie?

Correct AnswerverifiedShow Answer

Developing and using a budget is part of the "obtaining" component of financial planning.

Correct AnswerverifiedShow Answer

Explain why borrowers benefit more than lenders in times of high inflation.

Correct AnswerverifiedInflation can also adversely affect lend...View AnswerShow Answer

Developing financial goals is the ______ step in the financial planning process.

Correct AnswerverifiedShow Answer

Describe the S-M-A-R-T approach to financial planning goal setting.Give an example.

Correct AnswerverifiedFinancial Goals should be spec...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Inflation can also adversely affect lend...
View Answer

Correct Answer
verified

Correct Answer
verified
Financial Goals should be spec...
View Answer

Correct Answer
verified