Question 1

Present value is also referred to as compounding.

Accepted Answer

A) True 
 B)False

Question 2

Increased home building results in:

Accepted Answer

A)  increased job opportunities.
B)  higher wages.
C)  increased consumer spending.
D)  overall economic expansion.
E)  All of these.F) A) and B)
G) A) and D)

Question 3

Developing and using a budget is part of which component of financial planning?

Accepted Answer

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

Question 4

What are the six steps in the financial planning process?

Accepted Answer

The personal financial planning process ...

Question 5

The ability to readily convert financial resources into cash without loss of value is referred to as:

Accepted Answer

A)  bankruptcy.
B)  liquidity.
C)  investing.
D)  saving.
E)  opportunity cost.F) B) and C)
G) A) and E)

Question 6

A formalized report that summarizes your current financial situation,analyzes your financial needs,and recommends future financial activities is a(n) :

Accepted Answer

A)  insurance prospectus.
B)  financial plan.
C)  budget.
D)  investment forecast.
E)  statement.F) B) and D)
G) D) and E)

Question 7

The main goal of personal financial planning is managing your money to:

Accepted Answer

A)  save and invest for future needs.
B)  reduce a person's tax liability.
C)  achieve personal economic satisfaction.
D)  spend to achieve financial objectives.
E)  save, spend, and borrow based on current needs.F) C) and E)
G) None of the above

Question 8

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

Question 9

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

Accepted Answer

A)  develop financial goals.
B)  review and revise your financial plan.
C)  Determine your current financial situation.
D)  evaluate your alternatives.
E)  create a financial action plan.F) B) and D)
G) A) and D)

Question 10

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 D)
G) A) and E)

Question 11

.Brad Johnson 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 terms.
D)  the type of action to be taken.
E)  a time frame.F) B) and C)
G) B) and E)

Question 12

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ____ percent.

Accepted Answer

A)  1
B)  2
C)  3
D)  4
E)  5F) A) and E)
G) A) and B)

Question 13

When prices are rising at a rate of 2 percent,the cost of products and services would double in ______ years.

Accepted Answer

A)  3
B)  6
C)  18
D)  36
E)  72F) B) and E)
G) A) and D)

Question 14

Lenders benefit more than borrowers in times of high inflation.

Accepted Answer

A) True 
 B)False

Question 15

Linda Ashworth is trying to decide whether to keep her money in a savings account or in a mutual fund.What would you tell her to help her analyze her decision?

Accepted Answer

Students answers will vary.Sug...

Question 16

Opportunity costs may be viewed only in terms of financial resources.

Accepted Answer

A) True 
 B)False

Question 17

The main responsibility of The Fed is to:

Accepted Answer

A)  maintain an adequate supply of money.
B)  approve spending by Congress.
C)  set federal income tax rates.
D)  determine illegal business activities.
E)  maintain a balanced budget for the federal government.F) A) and E)
G) A) and D)

Question 18

Changes in personal,social,and economic factors make it necessary to:

Accepted Answer

A)  review and revise your financial plan.
B)  implement the financial plan.
C)  develop financial goals.
D)  determine your current financial situation.
E)  create a financial action plan.F) A) and D)
G) A) and C)

Question 19

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) None of the above
G) B) and D)

Question 20

Describe the relationship between the annual inflation rate and prices using the Rule of 72.

Accepted Answer

The Rule of 72 helps determine...

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

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

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

Correct Answer
verified

Opportunity costs may be viewed only in terms of financial resources.

Correct Answer
verified

Correct Answer
verified

A formalized report that summarizes your current financial situation,analyzes your financial needs,and recommends future financial activities is a(n) :

Correct Answer
verified

The ability to readily convert financial resources into cash without loss of value is referred to as:

Correct Answer
verified

The main goal of personal financial planning is managing your money to:

Correct Answer
verified

Increased home building results in:

Correct Answer
verified

When prices are rising at a rate of 2 percent,the cost of products and services would double in ______ years.

Correct Answer
verified

Present value is also referred to as compounding.

Correct Answer
verified

The main responsibility of The Fed is to:

Correct Answer
verified

Linda Ashworth is trying to decide whether to keep her money in a savings account or in a mutual fund.What would you tell her to help her analyze her decision?

Correct Answer
verified
Students answers will vary.Sug...
View Answer

Describe the relationship between the annual inflation rate and prices using the Rule of 72.

Correct Answer
verified
The Rule of 72 helps determine...
View Answer

Lenders benefit more than borrowers in times of high inflation.

Correct Answer
verified

What are the six steps in the financial planning process?

Correct Answer
verified
The personal financial planning process ...
View Answer

Changes in personal,social,and economic factors make it necessary to:

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

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ____ percent.

Correct Answer
verified

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

Correct Answer
verified

Developing and using a budget is part of which component of financial planning?

Correct Answer
verified

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

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 AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Opportunity costs may be viewed only in terms of financial resources.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A formalized report that summarizes your current financial situation,analyzes your financial needs,and recommends future financial activities is a(n) :

Correct AnswerverifiedShow Answer

The ability to readily convert financial resources into cash without loss of value is referred to as:

Correct AnswerverifiedShow Answer

The main goal of personal financial planning is managing your money to:

Correct AnswerverifiedShow Answer

Increased home building results in:

Correct AnswerverifiedShow Answer

When prices are rising at a rate of 2 percent,the cost of products and services would double in ______ years.

Correct AnswerverifiedShow Answer

Present value is also referred to as compounding.

Correct AnswerverifiedShow Answer

The main responsibility of The Fed is to:

Correct AnswerverifiedShow Answer

Linda Ashworth is trying to decide whether to keep her money in a savings account or in a mutual fund.What would you tell her to help her analyze her decision?

Correct AnswerverifiedStudents answers will vary.Sug...View AnswerShow Answer

Describe the relationship between the annual inflation rate and prices using the Rule of 72.

Correct AnswerverifiedThe Rule of 72 helps determine...View AnswerShow Answer

Lenders benefit more than borrowers in times of high inflation.

Correct AnswerverifiedShow Answer

What are the six steps in the financial planning process?

Correct AnswerverifiedThe personal financial planning process ...View AnswerShow Answer

Changes in personal,social,and economic factors make it necessary to:

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

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ____ percent.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Developing and using a budget is part of which component of financial planning?

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

Correct Answer
verified
Students answers will vary.Sug...
View Answer

Correct Answer
verified
The Rule of 72 helps determine...
View Answer

Correct Answer
verified

Correct Answer
verified
The personal financial planning process ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified