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Exam 1: Understanding the Financial Planning Process

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Question 41

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -During the expansion phase of the business cycle,the unemployment rate will [increase | decrease].

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Question 42

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A personal computer can be very useful in assisting one with their financial planning.

A) True
B) False

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Question 43

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Money is

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -[Money | Inflation] is the common denominator for gauging all financial transactions.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Most people graduate from college with [no | some] debts.

Investments are distinguished from savings on the basis of

The Consumer Price Index (CPI)is the amount of goods and services each dollar buys at a given point in time.

Martha is 80 and has a very high net worth.Her most important financial concern is probably her

Becky graduated with a master degree in Personal Financial Planning.After working two years in a small financial planning firm,Becky earns $60,000 annually and saves $10,000 a year.What is her average propensity to consume?

The last step in the financial planning process is to

The amount of goods and services each dollar buys at a given point in time is:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -[Women | Men] tend to be more conservative investors.

Utility refers to the amount of satisfaction a person gets from buying certain items.

Typically people with the lowest incomes tend to be

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The average [self employed | retired] household has higher income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -After reaching adulthood,your financial goals will [stabilize | continue to change].

This is a measure of inflation based on changes in the cost of a market basket of consumer goods and services:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -"1 want to accumulate a comfortable retirement fund" [would | would not] be a specific financial goal.

Your corporate stock is an example of a real asset.

Most families find it difficult to discuss money matters.