Question 1

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.

Question 2

What types of economic conditions are commonly associated with personal financial decisions? How can these risks be evaluated and minimized to reduce personal and financial difficulties?

Accepted Answer

Common risks are inflation,changing interest rates,economic conditions,and personal factors such as health,safety,and financial costs.Risks can be minimized by gathering information and by researching financial decisions.

Question 3

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.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 dependents

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.

Question 7

Reduced funds available for investment in our economy could result from

Accepted Answer

A)   expanded savings by consumers.
B)   higher imports than exports.
C)   reduced spending for consumer goods.
D)   higher exports than imports.
E)   higher opportunity costs.

Question 8

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. D

Question 9

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. B

Question 10

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 deposits

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)   $193

Question 12

Risks associated with most financial decisions are fairly easy to measure.

Accepted Answer

A) True 
 B)False

Question 13

Hope Appleton 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

Hope should consider the risk and opport...

Question 14

The major function of a financial plan is to:

Accepted Answer

A)   reduce taxes.
B)   increase savings.
C)   achieve financial goals.
D)   improve your credit rating.
E)   obtain adequate insurance protection.

Question 15

Opportunity costs refer to time,money,and other resources that are given up when a decision is made.

Accepted Answer

A) True 
 B)False

Question 16

Changes in interest rates don't affect your financial planning.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Future value calculations consider:

Accepted Answer

A)   compounding.
B)   add-on interest.
C)   discounting
D)   simple interest.
E)   an annuity.

Question 19

Present value is also referred to as compounding.

Accepted Answer

A) True 
 B)False

Question 20

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)   $600

Exam 1: Personal Financial Planning in Action

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

Correct Answer
verified

What types of economic conditions are commonly associated with personal financial decisions? How can these risks be evaluated and minimized to reduce personal and financial difficulties?

Correct Answer
verified
Common risks are inflation,changing interest rates,economic conditions,and personal factors such as health,safety,and financial costs.Risks can be minimized by gathering information and by researching financial decisions.

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The uncertainty associated with decision making is referred to as:

Correct Answer
verified

Reduced funds available for investment in our economy could result from

Correct Answer
verified

Higher consumer prices are likely to be accompanied by:

Correct Answer
verified
D

Opportunity cost refers to:

Correct Answer
verified
B

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

Correct Answer
verified

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 Answer
verified

Risks associated with most financial decisions are fairly easy to measure.

Correct Answer
verified

Hope Appleton 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
Hope should consider the risk and opport...
View Answer

The major function of a financial plan is to:

Correct Answer
verified

Opportunity costs refer to time,money,and other resources that are given up when a decision is made.

Correct Answer
verified

Changes in interest rates don't affect your financial planning.

Correct Answer
verified

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

Correct Answer
verified

Future value calculations consider:

Correct Answer
verified

Present value is also referred to as compounding.

Correct Answer
verified

Correct Answer
verified

Exam 1: Personal Financial Planning in Action

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

Correct AnswerverifiedShow Answer

What types of economic conditions are commonly associated with personal financial decisions? How can these risks be evaluated and minimized to reduce personal and financial difficulties?

Correct AnswerverifiedCommon risks are inflation,changing interest rates,economic conditions,and personal factors such as health,safety,and financial costs.Risks can be minimized by gathering information and by researching financial decisions.

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The uncertainty associated with decision making is referred to as:

Correct AnswerverifiedShow Answer

Reduced funds available for investment in our economy could result from

Correct AnswerverifiedShow Answer

Higher consumer prices are likely to be accompanied by:

Correct AnswerverifiedD

Opportunity cost refers to:

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

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

Risks associated with most financial decisions are fairly easy to measure.

Correct AnswerverifiedShow Answer

Hope Appleton 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 AnswerverifiedHope should consider the risk and opport...View AnswerShow Answer

The major function of a financial plan is to:

Correct AnswerverifiedShow Answer

Opportunity costs refer to time,money,and other resources that are given up when a decision is made.

Correct AnswerverifiedShow Answer

Changes in interest rates don't affect your financial planning.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Future value calculations consider:

Correct AnswerverifiedShow Answer

Present value is also referred to as compounding.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Common risks are inflation,changing interest rates,economic conditions,and personal factors such as health,safety,and financial costs.Risks can be minimized by gathering information and by researching financial decisions.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Hope should consider the risk and opport...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified