Question 1

John Gleason is interested in purchasing a 46" rear projection TV for his living room.He knows that right now the TV will cost approximately $1500.John wants to borrow the money to purchase the TV but is a little concerned because he thinks interest rates are going to fall in the future.He is worried that he might get stuck with a loan at a high interest rate.What type of risk is John worried about?

Accepted Answer

A)  Inflation risk
B)  Interest rate risk
C)  Income risk
D)  Personal risk
E)  Liquidity riskF) D) and E)
G) B) and E)

Question 2

A major activity in the planning component of financial planning is:

Accepted Answer

A)  selecting insurance coverage.
B)  evaluating investment alternatives.
C)  gaining occupational training and experience.
D)  allocating current resources for spending.
E)  establishing a line of credit.F) C) and D)
G) B) and E)

Question 3

Most decisions have only a few alternatives from which to choose.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The main economic influence that determines prices is:

Accepted Answer

A)  the stock market.
B)  interest rates.
C)  employment.
D)  government spending.
E)  supply and demand.F) A) and C)
G) A) and E)

Question 6

Higher prices are likely to result from:

Accepted Answer

A)  lower demand by consumers.
B)  increased production by business.
C)  lower interest rates.
D)  increased spending by consumers without increased production.
E)  an increase in the supply of a product.F) A) and D)
G) B) and D)

Question 7

The first step of the financial planning process is to:

Accepted Answer

A)  develop financial goals.
B)  implement the financial plan.
C)  analyze your current personal and financial situation.
D)  evaluate and revise your actions.
E)  create a financial plan of action.F) B) and C)
G) B) and E)

Question 8

What is meant by the term "Time Value of Money?"

Accepted Answer

The answer of What is meant by the term "Time...

Question 9

____________ risk refers to the danger of lost buying power during times of rising prices.

Accepted Answer

A)  Trade-off
B)  Economic
C)  Personal
D)  Inflation
E)  Interest-rateF) C) and D)
G) B) and D)

Question 10

Lynn Roy wants to travel around the world.Lynn Roy has several options she can pursue.She can continue to work full time to earn the money she needs for her trip.She can work part time so that she can still earn some money but have the time necessary to complete her trip.She can take full retirement so that she has all the time necessary to complete her trip.Which step in the financial planning process does this scenario demonstrate?

Accepted Answer

A)  Determining her current financial situation
B)  Developing her financial goals
C)  Identifying alternative courses of action
D)  Evaluating her alternatives
E)  Implementing her financial planF) A) and C)
G) A) and E)

Question 11

The main goal of personal financial planning is:

Accepted Answer

A)  saving and investing for future needs.
B)  reducing a person's tax liability.
C)  achieving personal economic satisfaction.
D)  spending to achieve financial objectives.
E)  saving,spending,and borrowing based on current needs.F) A) and B)
G) A) and C) C

Question 12

Lynn Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home she owns.Which step in the financial planning
Process does this situation demonstrate?

Accepted Answer

A)  Determining her current financial situation
B)  Developing her financial goals
C)  Identifying alternative courses of action
D)  Evaluating her alternatives
E)  Implementing her financial planF) A) and E)
G) B) and C)

Question 13

The annual price increase for consumer goods and services measured by the Bureau of Labor Statistics is referred called ________.

Accepted Answer

A)  deflation
B)  inflation
C)  the consumer price index
D)  the price calculator
E)  goods and all of the aboveF) A) and C)
G) B) and C)

Question 14

Analyzing your current financial position is a part of the first stage of the financial planning process.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would cause prices to drop?

Accepted Answer

A)  increased taxes on business
B)  higher levels of demand by consumers
C)  a demand for higher wages
D)  a reduction in the money supply
E)  increased production by businessF) A) and D)
G) All of the above

Question 16

A financial plan is another name for a budget.

Accepted Answer

A) True 
 B)False

Question 17

What are the six steps in the financial planning process?

Accepted Answer

Answers will vary

Question 18

One aspect of financial planning is to make sure you maintain adequate insurance coverage for your needs.Which aspect of financial planning does this deal with?

Accepted Answer

A)  Borrowing
B)  Spending
C)  Managing Risk
D)  Investing
E)  Retirement and Estate PlanningF) All of the above
G) A) and B) C

Question 19

John Gleason is interested in purchasing a 46" rear projection TV for his living room.He knows that right now the TV will cost approximately $1500.However,John is a little concerned about his job.John is a pilot for Delta Airlines and he thinks it is possible that he could be laid off in the near future.What type of risk is John worried about?

Accepted Answer

A)  Inflation risk
B)  Interest rate risk
C)  Income risk
D)  Personal risk
E)  Liquidity riskF) B) and E)
G) C) and D)

Question 20

One aspect of financial planning is to buy stocks,bonds and mutual funds with the potential for long term growth.Which aspect of financial planning does this deal with?

Accepted Answer

A)  Borrowing
B)  Spending
C)  Managing Risk
D)  Investing
E)  Retirement and Estate PlanningF) A) and B)
G) A) and C)

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

Correct Answer
verified

A major activity in the planning component of financial planning is:

Correct Answer
verified

Most decisions have only a few alternatives from which to choose.

Correct Answer
verified

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

Correct Answer
verified

The main economic influence that determines prices is:

Correct Answer
verified

Higher prices are likely to result from:

Correct Answer
verified

The first step of the financial planning process is to:

Correct Answer
verified

What is meant by the term "Time Value of Money?"

Correct Answer
verified

____________ risk refers to the danger of lost buying power during times of rising prices.

Correct Answer
verified

Correct Answer
verified

The main goal of personal financial planning is:

Correct Answer
verified
C

Lynn Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home she owns.Which step in the financial planning Process does this situation demonstrate?

Correct Answer
verified

The annual price increase for consumer goods and services measured by the Bureau of Labor Statistics is referred called ________.

Correct Answer
verified

Analyzing your current financial position is a part of the first stage of the financial planning process.

Correct Answer
verified

Which of the following would cause prices to drop?

Correct Answer
verified

A financial plan is another name for a budget.

Correct Answer
verified

What are the six steps in the financial planning process?

Correct Answer
verified
Answers will vary

One aspect of financial planning is to make sure you maintain adequate insurance coverage for your needs.Which aspect of financial planning does this deal with?

Correct Answer
verified
C

Correct Answer
verified

One aspect of financial planning is to buy stocks,bonds and mutual funds with the potential for long term growth.Which aspect of financial planning does this deal with?

Correct Answer
verified

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

Correct AnswerverifiedShow Answer

A major activity in the planning component of financial planning is:

Correct AnswerverifiedShow Answer

Most decisions have only a few alternatives from which to choose.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The main economic influence that determines prices is:

Correct AnswerverifiedShow Answer

Higher prices are likely to result from:

Correct AnswerverifiedShow Answer

The first step of the financial planning process is to:

Correct AnswerverifiedShow Answer

What is meant by the term "Time Value of Money?"

Correct AnswerverifiedShow Answer

____________ risk refers to the danger of lost buying power during times of rising prices.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The main goal of personal financial planning is:

Correct AnswerverifiedC

Lynn Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home she owns.Which step in the financial planning Process does this situation demonstrate?

Correct AnswerverifiedShow Answer

The annual price increase for consumer goods and services measured by the Bureau of Labor Statistics is referred called ________.

Correct AnswerverifiedShow Answer

Analyzing your current financial position is a part of the first stage of the financial planning process.

Correct AnswerverifiedShow Answer

Which of the following would cause prices to drop?

Correct AnswerverifiedShow Answer

A financial plan is another name for a budget.

Correct AnswerverifiedShow Answer

What are the six steps in the financial planning process?

Correct AnswerverifiedAnswers will vary

One aspect of financial planning is to make sure you maintain adequate insurance coverage for your needs.Which aspect of financial planning does this deal with?

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

One aspect of financial planning is to buy stocks,bonds and mutual funds with the potential for long term growth.Which aspect of financial planning does this deal with?

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
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Answers will vary

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified