Question 1

Which of the following goals would be the easiest to implement and measure its accomplishment?

Accepted Answer

A)  "Reduce our debt payments."
B)  "Save funds for an annual vacation."
C)  "Save $100 a month to create a $4,000 emergency fund."
D)  "Invest $2,000 a year for retirement."
E)  "Increase our emergency fund."F) A) and E)
G) C) and D)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

If you desire your money to double in 6 years,what rate of return would you need to earn?

Accepted Answer

A)  6 percent
B)  8 percent
C)  9 percent
D)  10 percent
E)  12 percentF) C) and E)
G) A) and D)

Question 4

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) A) and B)
G) A) and C)

Question 5

One aspect of financial planning is to make wise decisions as to what to purchase and when to purchase it.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 C)
G) A) and D)

Question 6

Changes in income,values,and family situation make it necessary to

Accepted Answer

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

Question 7

A question associated with the saving component of financial planning is:

Accepted Answer

A)  Do you have an adequate emergency fund?
B)  Is your will current?
C)  Is your investment program appropriate to your income and tax situation?
D)  Do you have a realistic budget for your current financial situation?
E)  Are your transportation expenses minimized through careful planning?F) B) and C)
G) A) and E)

Question 8

The financial planning process concludes with efforts to:

Accepted Answer

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

Question 9

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) C) and D)
G) A) and C)

Question 10

John is planning to go to graduate school in a program that will take three years.John wants to have available $10,000 available each year for his school and living expenses.If he earns 6% on his investments,how much must be deposited at the start of his studies for him to withdraw $10,000 a year for three years?

Accepted Answer

A)  $10,000
B)  $18,390
C)  $26,730
D)  $29,100
E)  $30,000F) A) and E)
G) All of the above

Question 11

Higher consumer prices are likely to be accompanied by:

Accepted Answer

A)  lower union wages.
B)  lower interest rates.
C)  lower production costs.
D)  higher interest rates.
E)  higher exports.F) B) and D)
G) D) and E)

Question 12

John Gleason is interested in purchasing a 46" rear projection TV for his living room.John knows that right now the TV will cost approximately $1500.John is not sure he can afford this TV right now but is worried that if he waits,the cost of the TV will rise to $1800.Which 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) A) and B)
G) B) and E)

Question 13

One aspect of financial planning is to control your use of credit.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 E)

Question 14

Time value of money refers to changes in consumer spending when inflation occurs.

Accepted Answer

A) True 
 B)False

Question 15

If a person deposited $50 a month for 6 years earning 8 percent,this would involve what type of computation?

Accepted Answer

A)  simple interest
B)  future value of a single amount
C)  future value of a series of deposits
D)  present value of a single amount
E)  present value of a series of depositsF) A) and B)
G) C) and D)

Question 16

Using the services of financial institutions will be most evident in your effort to:

Accepted Answer

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

Question 17

____________ goals relate to personal relationships,health,and education.

Accepted Answer

A)  Durable-product
B)  Short-term
C)  Consumable-product
D)  Intangible-purchase
E)  IntermediateF) B) and D)
G) C) and D)

Question 18

Which type of computation would a person use to determine current value of a desired amount for the future?

Accepted Answer

A)  simple interest
B)  future value of a single amount
C)  future value of a series of deposits
D)  present value of a single amount
E)  present value of a series of depositsF) A) and D)
G) B) and C)

Question 19

Which of the following is an example of opportunity cost?

Accepted Answer

A)  renting an apartment near school
B)  saving money instead of taking a vacation
C)  setting aside money for paying income tax
D)  purchasing automobile insurance
E)  using a personal computer for financial planningF) B) and E)
G) C) and E)

Question 20

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

Accepted Answer

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

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

A question associated with the saving component of financial planning is:

Correct Answer
verified

Which type of computation would a person use to determine current value of a desired amount for the future?

Correct Answer
verified

One aspect of financial planning is to make wise decisions as to what to purchase and when to purchase it.Which aspect of financial planning does this deal with?

Correct Answer
verified

Which of the following goals would be the easiest to implement and measure its accomplishment?

Correct Answer
verified

If you desire your money to double in 6 years,what rate of return would you need to earn?

Correct Answer
verified

The financial planning process concludes with efforts to:

Correct Answer
verified

Time value of money refers to changes in consumer spending when inflation occurs.

Correct Answer
verified

If a person deposited $50 a month for 6 years earning 8 percent,this would involve what type of computation?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

Correct Answer
verified

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

Correct Answer
verified

One aspect of financial planning is to control your use of credit.Which aspect of financial planning does this deal with?

Correct Answer
verified

Changes in income,values,and family situation make it necessary to

Correct Answer
verified

An example of a personal opportunity cost would be:

Correct Answer
verified

____________ goals relate to personal relationships,health,and education.

Correct Answer
verified

Which of the following is an example of opportunity cost?

Correct Answer
verified

Higher consumer prices are likely to be accompanied by:

Correct Answer
verified

Using the services of financial institutions will be most evident in your effort to:

Correct Answer
verified

Correct Answer
verified

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

A question associated with the saving component of financial planning is:

Correct AnswerverifiedShow Answer

Which type of computation would a person use to determine current value of a desired amount for the future?

Correct AnswerverifiedShow Answer

One aspect of financial planning is to make wise decisions as to what to purchase and when to purchase it.Which aspect of financial planning does this deal with?

Correct AnswerverifiedShow Answer

Which of the following goals would be the easiest to implement and measure its accomplishment?

Correct AnswerverifiedShow Answer

If you desire your money to double in 6 years,what rate of return would you need to earn?

Correct AnswerverifiedShow Answer

The financial planning process concludes with efforts to:

Correct AnswerverifiedShow Answer

Time value of money refers to changes in consumer spending when inflation occurs.

Correct AnswerverifiedShow Answer

If a person deposited $50 a month for 6 years earning 8 percent,this would involve what type of computation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One aspect of financial planning is to control your use of credit.Which aspect of financial planning does this deal with?

Correct AnswerverifiedShow Answer

Changes in income,values,and family situation make it necessary to

Correct AnswerverifiedShow Answer

An example of a personal opportunity cost would be:

Correct AnswerverifiedShow Answer

____________ goals relate to personal relationships,health,and education.

Correct AnswerverifiedShow Answer

Which of the following is an example of opportunity cost?

Correct AnswerverifiedShow Answer

Higher consumer prices are likely to be accompanied by:

Correct AnswerverifiedShow Answer

Using the services of financial institutions will be most evident in your effort to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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