Question 1

Sources for financial planning can be found from:

Accepted Answer

A)   print and media.
B)   digital sources.
C)   financial institutions.
D)   financial experts.
E)   All of these.F) A) and D)
G) All of the above

Question 2

When an individual makes a purchase without considering the financial consequences of that purchase, ignores the ______________ aspect of financial planning.

Accepted Answer

A)   borrowing
B)   risk management
C)   spending
D)   retirement and estate planning
E)   obtainingF) A) and C)
G) B) and E)

Question 3

____________ 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 E)
G) A) and C)

Question 4

Opportunity cost refers to:

Accepted Answer

A)   money needed for major consumer purchases.
B)   what a person gives up by making a choice.
C)   the amount paid for taxes when a purchase is made.
D)   current interest rates.
E)   evaluating different alternatives for financial decisions.F) A) and E)
G) All of the above

Question 5

Lynn Roy has decided to take retirement from her job and use the time she has earned to travel around the world. She has decided to start her trip around the world in Europe by train and bus and will use her savings to pay for her trip. Which step in the financial planning process does this scenario 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) A) and E)
G) A) and B)

Question 6

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

Question 7

Mary Sander's new job is very demanding. She regularly works long hours and on the weekends. As a result, Mary has not had much time for her family and friends. This is an example of:

Accepted Answer

A)   deflation.
B)   financial opportunity cost.
C)   personal opportunity cost.
D)   time value of money.
E)   inflation.F) C) and D)
G) A) and E)

Question 8

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 E)
G) D) and E)

Question 9

When prices are rising at a rate of 3 percent, the cost of products and services would double in ______ years.

Accepted Answer

A)   3
B)   6
C)   12
D)   24
E)   36F) C) and D)
G) None of the above

Question 10

A financial plan is another name for a budget.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

The answer of Explain why borrowers benefit more than lenders...

Question 13

As Jean Tyler plans to set aside funds for her young children's college education, she is setting a(n)  ____________ goal.

Accepted Answer

A)   intermediate
B)   long-term
C)   short-term
D)   intangible
E)   durableF) A) and E)
G) C) and D)

Question 14

If inflation is increasing at 3 percent per year, and your salary increases at the same rate, how long will it take your salary to double?

Accepted Answer

A)   30 years
B)   24 years
C)   18 years
D)   12 years
E)   6 yearsF) A) and B)
G) None of the above

Question 15

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) All of the above
G) D) and E)

Question 16

Who is most likely to benefit from inflation?

Accepted Answer

A)   Retired people
B)   Lenders
C)   Borrowers
D)   Low-income consumers
E)   GovernmentF) None of the above
G) A) and C)

Question 17

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 E)
G) None of the above

Question 18

The time value of money refers to:

Accepted Answer

A)   personal opportunity costs such as time lost on an activity.
B)   financial decisions that require borrowing funds from a financial institution.
C)   changes in interest rates due to changes in the supply and demand for money in our economy.
D)   increases in an amount of money as a result of interest.
E)   changing demographic trends in our society.F) B) and E)
G) D) and E)

Question 19

The success of a financial plan will be determined by:

Accepted Answer

A)   the amount of income available.
B)   the stage of the adult life cycle.
C)   a person's tax status.
D)   how resources are used.
E)   current economic conditions.F) All of the above
G) A) and B)

Question 20

Analyzing your current financial position is a part of which step in the financial planning process?

Accepted Answer

A)   First
B)   Second
C)   Third
D)   Fourth
E)   FifthF) C) and E)
G) All of the above

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

The first step of the financial planning process is to:

Correct Answer
verified

If inflation is increasing at 3 percent per year, and your salary increases at the same rate, how long will it take your salary to double?

Correct Answer
verified

As Jean Tyler plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Who is most likely to benefit from inflation?

Correct Answer
verified

Mary Sander's new job is very demanding. She regularly works long hours and on the weekends. As a result, Mary has not had much time for her family and friends. This is an example of:

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

A financial plan is another name for a budget.

Correct Answer
verified

The success of a financial plan will be determined by:

Correct Answer
verified

The time value of money refers to:

Correct Answer
verified

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

Correct Answer
verified

When an individual makes a purchase without considering the financial consequences of that purchase, ignores the ______________ aspect of financial planning.

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

When prices are rising at a rate of 3 percent, the cost of products and services would double in ______ years.

Correct Answer
verified

Analyzing your current financial position is a part of which step in the financial planning process?

Correct Answer
verified

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

Correct Answer
verified

Sources for financial planning can be found from:

Correct Answer
verified

Opportunity cost refers to:

Correct Answer
verified

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

The first step of the financial planning process is to:

Correct AnswerverifiedShow Answer

If inflation is increasing at 3 percent per year, and your salary increases at the same rate, how long will it take your salary to double?

Correct AnswerverifiedShow Answer

As Jean Tyler plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who is most likely to benefit from inflation?

Correct AnswerverifiedShow Answer

Mary Sander's new job is very demanding. She regularly works long hours and on the weekends. As a result, Mary has not had much time for her family and friends. This is an example of:

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

A financial plan is another name for a budget.

Correct AnswerverifiedShow Answer

The success of a financial plan will be determined by:

Correct AnswerverifiedShow Answer

The time value of money refers to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When an individual makes a purchase without considering the financial consequences of that purchase, ignores the ______________ aspect of financial planning.

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

When prices are rising at a rate of 3 percent, the cost of products and services would double in ______ years.

Correct AnswerverifiedShow Answer

Analyzing your current financial position is a part of which step in the financial planning process?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Sources for financial planning can be found from:

Correct AnswerverifiedShow Answer

Opportunity cost refers to:

Correct AnswerverifiedShow Answer

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