Reference no: EM133112831

1. Tangible assets that the household owns are: Multiple Choice

a. Real assets

b. Human assets

c. Financial assets

d. None of the choices are correct.

2. Why is there a need for the financial plan to integrate all financial actions? Multiple Choice

a. To satisfy certain regulation that financial planners must follow.

b. Due to the limited resources households have.

c. None of the choices are correct.

d. Due to the possibility that the justification for some actions may be forgotten.

3. What is the goal of personal financial planning? Multiple Choice

a. To provide the highest standard of living possible for household "member-owners" over their life cycle.

b. To maximize the revenue of household "member-owners" over their life cycle.

c. To minimize the expenses of household "member-owners" over their life cycle.

d. To minimize the degree of risk faced by household "member-owners" over their life cycle.

4. The minimum coverage generally associated with umbrella coverage is: Multiple Choice

a. $500,000

b. There is no minimum coverage.

c. $750,000

d. $1 million.

5. Which of the following is a strength of a traditional annuity? Multiple Choice

a. Annuities allow you to receive a fixed sum of money each year

b. Lack of liquidity once you annuitize

c. They can significantly reduce longevity risk and annuities allow you to receive a fixed sum of money each year

d. Annuities allow you to receive a fixed sum of money each year and lack of liquidity once you annuitize

6. What is the mandate of behavioral financial planning? Multiple Choice

a. To eliminate any behavior that is increases the risk to the revenue source

b. To eliminate any behavior that is increases the risk to the revenue source and to focus on any behavior that provides a shortfall from ideal results and can be improved upon

c. To focus on any behavior that provides a shortfall from ideal results and can be improved upon

d. To eliminate any behavior that is not result in revenue generation

7. Why can investments be viewed as a delivery mechanism? Multiple Choice

a. Because they help create sufficient assets to fund our goals

b. Investments are not viewed as delivery mechanism

c. Because they increase the household's risk level

d. Because they transform current savings into future spending

8. Which of the following is not part of an insurance policy? Multiple Choice

a. Investment return

b. None of these are a part of an insurance policy

c. Liability expense

d. Mortality charge

9. Which area of personal financial planning is affected by the external environment variable "Change in projected inflation rate"? Multiple Choice

a. Cash flow.

b. None of the choices are correct.

c. Debt.

d. Tax planning.