Question 1

Economic Factor: Trade balance measures?

Accepted Answer

A)  The total value of goods and services produced within a country's borders, including items produced with foreign resources
B)  The difference between a country's exports and its imports
C)  The cost of money; the cost of credit when you borrow; the return on your money when you save or invest
D)  The dollars available for spending in our economy
E)  The number of people without employment who are willing and able to workF) None of the above
G) A) and E)

Question 2

Economic Factor: interest rates measures?

Accepted Answer

A)  The value of the dollar; changes in inflation
B)  The demand for goods and services by individuals and households
C)  The cost of money; the cost of credit when you borrow; the return on your money when you save or invest
D)  The dollars available for spending in our economy
E)  The number of people without employment who are willing and able to workF) B) and E)
G) None of the above

Question 3

An example of a personal opportunity cost would be:

Accepted Answer

A)  lost wages due to continuing as a full time student
B)  higher earnings on savings that must be kept on deposit a minimum of six months.
C)  time comparing several brands of personal computers
D)  Interest lost by using savings to make a purchase
E)  having to pay a tax penalty due to not having enough withheld from your monthly salary.F) A) and E)
G) C) and D)

Question 4

Afton has a goal of "saving $5,000 for a vacation in 3 years." Afton's goal lacks

Accepted Answer

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

Question 5

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

Question 6

When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years.

Accepted Answer

A) True 
 B)False

Question 7

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) A) and D)

Question 8

Gross domestic product (GDP) can be described as the difference between a country's exports and its imports.

Accepted Answer

A) True 
 B)False

Question 9

The fifth step of the financial planning process is to

Accepted Answer

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

Question 10

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) A) and B)

Question 11

Your goal is to pay down your student loan in 3 years.The balance today is $9,434.If you are charged a rate of 9%, compounded monthly, what will be your monthly, end-of-period payment?

Accepted Answer

A)  $527
B)  $406
C)  $300
D)  $262
E)  $193F) A) and E)
G) C) and D)

Question 12

A decrease in the demand for a product or service may result in a decrease in wages for people producing that item.

Accepted Answer

A) True 
 B)False

Question 13

Lenders benefit less than borrowers in times of high inflation.

Accepted Answer

A) True 
 B)False

Question 14

Present value computations are also called discounting.

Accepted Answer

A) True 
 B)False

Question 15

Economic Factor: Consumer spending measures?

Accepted Answer

A)  The value of the dollar; changes in inflation
B)  The demand for goods and services by individuals and households
C)  The cost of money; the cost of credit when you borrow; the return on your money when you save or invest
D)  The dollars available for spending in our economy
E)  The number of people without employment who are willing and able to workF) A) and B)
G) A) and C)

Question 16

The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Accepted Answer

A)  financial goals
B)  saving
C)  planning
D)  restructuring debt
E)  liquidityF) A) and E)
G) B) and E)

Question 17

Opportunity cost refers to:

Accepted Answer

A)  money needed for major consumer purchases.
B)  the trade-off of a decision.
C)  the amount paid for taxes when a purchase is made.
D)  current interest rates.
E)  evaluating different alternatives for financial decisions.F) B) and E)
G) B) and C)

Question 18

Life situation Single Parent with children under 18 What are your specialized financial activities?

Accepted Answer

A)  Consider home purchase.
B)  Obtain adequate amounts of health, life, and disability insurances.
C)  Consider tax-deferred contributions to retirement fund.
D)  Consolidate financial assets
E)  Consider income splittingF) A) and B)
G) A) and E)

Question 19

An individual invests $12,000 at a rate of 4% per annum.What will be its value in 9 years' time?

Accepted Answer

A)  $15,000
B)  $15,853
C)  $16,289
D)  $18,000
E)  $17,080F) A) and B)
G) C) and D)

Question 20

Increased 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 D)
G) A) and E)

Exam 1: Personal Financial Planning: An Introduction

Afton has a goal of "saving $5,000 for a vacation in 3 years." Afton's goal lacks

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An individual invests $12,000 at a rate of 4% per annum.What will be its value in 9 years' time?

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Gross domestic product (GDP) can be described as the difference between a country's exports and its imports.

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Opportunity cost refers to:

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A major activity in the planning component of financial planning is

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A decrease in the demand for a product or service may result in a decrease in wages for people producing that item.

Correct AnswerverifiedShow Answer

Economic Factor: Consumer spending measures?

Correct AnswerverifiedShow Answer

Economic Factor: interest rates measures?

Correct AnswerverifiedShow Answer

Present value computations are also called discounting.

Correct AnswerverifiedShow Answer

When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years.

Correct AnswerverifiedShow Answer

Life situation Single Parent with children under 18 What are your specialized financial activities?

Correct AnswerverifiedShow Answer

Increased consumer spending will usually cause:

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The fifth step of the financial planning process is to

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The problem of bankruptcy is associated with poor decisions in the ______________ component of financial planning.

Correct AnswerverifiedShow Answer

Economic Factor: Trade balance measures?

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Your goal is to pay down your student loan in 3 years.The balance today is $9,434.If you are charged a rate of 9%, compounded monthly, what will be your monthly, end-of-period payment?

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

An example of a personal opportunity cost would be:

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Lenders benefit less than borrowers in times of high inflation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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