Question 1

Assume your uncle will pay you $100 for each of the next two years and $200 in years 3 and these amounts will be paid at year end. Assume the interest rate is 10% for the first two years and 12% for the next two (years 3 and 4) . What is your uncle's promise worth in today's dollars? (Round your answer)

Accepted Answer

A)   $317
B)   $342
C)   $453
D)   $512
E)   $600F) A) and D)
G) A) and C)

Question 2

Lenders benefit less than borrowers in times of high inflation.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)   interest-rate
B)   inflation
C)   economic
D)   trade-off
E)   personalF) A) and B)
G) A) and C)

Question 5

Personal financial planning has the main goal of:

Accepted Answer

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

Question 6

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) A) and B)
G) D) and E)

Question 7

The present value of a future amount will decrease if _________________. 
I. the discount rate increases
II. the amount occurs closer in time
III. the compounding frequency increases
IV. inflation increases

Accepted Answer

A)   I and II only
B)   I and III only
C)   II and III only
D)   III and IV only
E)   I, III and IV onlyF) None of the above
G) C) and D)

Question 8

People are commonly overwhelmed by the many influences on personal financial decisions. What are the factors affecting financial planning?

Accepted Answer

Personal factors that influence financia...

Question 9

Time value of money calculations consider:

Accepted Answer

A)   present value.
B)   interest rate.
C)   payment
D)   time period.
E)   all of the above.F) All of the above
G) C) and D)

Question 10

A financial plan is also known and referred to as a budget.

Accepted Answer

A) True 
 B)False

Question 11

If a person deposited $100 a month for 5 years earning 9 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 D)
G) B) and E)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is usually considered a long-term financial strategy?

Accepted Answer

A)   creating a budget
B)   using savings to pay off a loan early
C)   renting an apartment to save for the purchase of a home
D)   investing in a growth mutual fund to accumulate retirement funds
E)   purchasing life insurance to cover current needs of dependentsF) A) and B)
G) All of the above

Question 14

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks

Accepted Answer

A)   measurable terms.
B)   a realistic perspective.
C)   specific actions.
D)   a tangible end.
E)   a time frame.F) A) and B)
G) C) and D)

Question 15

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) None of the above
G) C) and E)

Question 16

The stages that an individual goes through based on age, financial needs, and family situation is called the:

Accepted Answer

A)   adult life cycle.
B)   budgeting procedure.
C)   personal economic cycle.
D)   financial planning process
E)   tax planning process.F) B) and E)
G) B) and D)

Question 17

Decreased 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) B) and C)
G) B) and E)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

When an individual makes a purchase without considering the financial consequences of that purchase, they are ignoring the ________________ aspect of financial planning.

Accepted Answer

A)   Borrowing
B)   Risk Management
C)   Spending
D)   Retirement and Estate Planning
E)   ObtainingF) B) and E)
G) C) and D)

Question 20

The financial planning process is complete once you implement your financial plan.

Accepted Answer

A) True 
 B)False

Exam 1: Personal Financial Planning: An Introduction

Correct Answer
verified

When an individual makes a purchase without considering the financial consequences of that purchase, they are ignoring the ________________ aspect of financial planning.

Correct Answer
verified

A financial plan is also known and referred to as a budget.

Correct Answer
verified

The financial planning process is complete once you implement your financial plan.

Correct Answer
verified

Decreased consumer spending will usually cause:

Correct Answer
verified

The stages that an individual goes through based on age, financial needs, and family situation is called the:

Correct Answer
verified

People are commonly overwhelmed by the many influences on personal financial decisions. What are the factors affecting financial planning?

Correct Answer
verified
Personal factors that influence financia...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

A major activity in the planning component of financial planning is

Correct Answer
verified

Which of the following is usually considered a long-term financial strategy?

Correct Answer
verified

Personal financial planning has the main goal of:

Correct Answer
verified

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks

Correct Answer
verified

The present value of a future amount will decrease if _________________. I. the discount rate increases II. the amount occurs closer in time III. the compounding frequency increases IV. inflation increases

Correct Answer
verified

Lenders benefit less than borrowers in times of high inflation.

Correct Answer
verified

Time value of money calculations consider:

Correct Answer
verified

The uncertainty associated with decision making is referred to as:

Correct Answer
verified

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

Correct Answer
verified

If a person deposited $100 a month for 5 years earning 9 percent, this would involve what type of computation?

Correct Answer
verified

Exam 1: Personal Financial Planning: An Introduction

Correct AnswerverifiedShow Answer

When an individual makes a purchase without considering the financial consequences of that purchase, they are ignoring the ________________ aspect of financial planning.

Correct AnswerverifiedShow Answer

A financial plan is also known and referred to as a budget.

Correct AnswerverifiedShow Answer

The financial planning process is complete once you implement your financial plan.

Correct AnswerverifiedShow Answer

Decreased consumer spending will usually cause:

Correct AnswerverifiedShow Answer

The stages that an individual goes through based on age, financial needs, and family situation is called the:

Correct AnswerverifiedShow Answer

People are commonly overwhelmed by the many influences on personal financial decisions. What are the factors affecting financial planning?

Correct AnswerverifiedPersonal factors that influence financia...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A major activity in the planning component of financial planning is

Correct AnswerverifiedShow Answer

Which of the following is usually considered a long-term financial strategy?

Correct AnswerverifiedShow Answer

Personal financial planning has the main goal of:

Correct AnswerverifiedShow Answer

Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks

Correct AnswerverifiedShow Answer

The present value of a future amount will decrease if _________________. I. the discount rate increases II. the amount occurs closer in time III. the compounding frequency increases IV. inflation increases

Correct AnswerverifiedShow Answer

Lenders benefit less than borrowers in times of high inflation.

Correct AnswerverifiedShow Answer

Time value of money calculations consider:

Correct AnswerverifiedShow Answer

The uncertainty associated with decision making is referred to as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a person deposited $100 a month for 5 years earning 9 percent, this would involve what type of computation?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Personal factors that influence financia...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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