Question 1

Benjamin Smith has just moved into a new house and needs a lawn mower since he has always lived in apartments and now he has a lawn to mow.What type of goal would this be for Benjamin?

Accepted Answer

A)  Consumable-product goal
B)  Durable-product goal
C)  Intangible goal
D)  Intermediate goal
E)  Long term goalF) None of the above
G) A) and C)

Question 2

Increased consumer spending will usually cause:

Accepted Answer

A)  lower consumer prices.
B)  reduced employment levels.
C)  lower wages.
D)  lower interest rates.
E)  higher employment levels.F) A) and D)
G) C) and D)

Question 3

The time value of money refers to:

Accepted Answer

A)  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 earned.
E)  changing demographic trends in our society.F) D) and E)
G) A) and E)

Question 4

A security is a financial instrument and includes all of the following,except:

Accepted Answer

A)  bonds
B)  stocks
C)  certificates of deposit
D)  mutual funds
E)  rare coinsF) D) and E)
G) C) and D)

Question 5

One aspect of financial planning is to make sure you maintain adequate insurance coverage for your needs.Which component of financial planning does this deal with?

Accepted Answer

A)  Borrowing
B)  Spending
C)  Managing risk
D)  Investing
E)  Retirement and estate planningF) B) and D)
G) C) and E)

Question 6

Many events affect your life situation and occur within the adult life cycle.List five events.

Accepted Answer

Answers will vary.
Graduation (at all ed...

Question 7

Present value is often referred to as compounding.

Accepted Answer

A) True 
 B)False

Question 8

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)  18
D)  24
E)  72F) A) and C)
G) C) and D)

Question 9

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 $50 a month to create a $2,000 emergency fund."
D)  "Invest $1,200 a year for retirement."
E)  "Increase our emergency fund."F) B) and D)
G) A) and E)

Question 10

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

Question 11

Which type of computation would a person use to determine the current value of a desired amount in 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)  Compound interestF) B) and C)
G) A) and E)

Question 12

The stages in the family and financial needs of an adult are called the:

Accepted Answer

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

Question 13

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

Accepted Answer

A)  first
B)  second
C)  third
D)  fourth
E)  fifthF) A) and B)
G) A) and E)

Question 14

Attempts to increase financial resources are part of the ________ component of financial planning.

Accepted Answer

A)  planning
B)  obtaining
C)  saving
D)  sharing
E)  protectingF) None of the above
G) B) and D)

Question 15

Economics is the study of using money to achieve financial goals.

Accepted Answer

A) True 
 B)False

Question 16

Types of risks associated with financial decisions may include:

Accepted Answer

A)  Income risk
B)  Personal risk
C)  Liquidity risk
D)  Inflation risk
E)  All of theseF) A) and E)
G) A) and B)

Question 17

As Olivia Wilson 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) A) and C)

Question 18

Which of the following is an example of opportunity cost?

Accepted Answer

A)  Renting an apartment near school
B)  Saving money instead of taking a vacation
C)  Setting aside money for paying income tax
D)  Purchasing automobile insurance
E)  Using a personal computer for financial planningF) A) and E)
G) A) and C)

Question 19

The Fed refers to:

Accepted Answer

A)  government regulation of business.
B)  Congress.
C)  the Federal Reserve System.
D)  the Federal Deposit Insurance Corporation.
E)  spending by the federal government.F) D) and E)
G) A) and E)

Question 20

What are the eight Components of Financial Planning?

Accepted Answer

The main Components of Financi...

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

Types of risks associated with financial decisions may include:

Correct AnswerverifiedShow Answer

The time value of money refers to:

Correct AnswerverifiedShow Answer

Benjamin Smith has just moved into a new house and needs a lawn mower since he has always lived in apartments and now he has a lawn to mow.What type of goal would this be for Benjamin?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The stages in the family and financial needs of an adult are called the:

Correct AnswerverifiedShow Answer

What are the eight Components of Financial Planning?

Correct AnswerverifiedThe main Components of Financi...View AnswerShow Answer

The Fed refers to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Attempts to increase financial resources are part of the ________ component of financial planning.

Correct AnswerverifiedShow Answer

One aspect of financial planning is to make sure you maintain adequate insurance coverage for your needs.Which component of financial planning does this deal with?

Correct AnswerverifiedShow Answer

Which of the following is an example of opportunity cost?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A security is a financial instrument and includes all of the following,except:

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

Economics is the study of using money to achieve financial goals.

Correct AnswerverifiedShow Answer

Present value is often referred to as compounding.

Correct AnswerverifiedShow Answer

Increased consumer spending will usually cause:

Correct AnswerverifiedShow Answer

Many events affect your life situation and occur within the adult life cycle.List five events.

Correct AnswerverifiedAnswers will vary.Graduation (at all ed...View AnswerShow Answer

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The main Components of Financi...
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Answers will vary.
Graduation (at all ed...
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