Reference no: EM13750064

Question 1: The danger of lost buying power during times of rising prices is referred to as

• inflation risk.
• economic risk.
• personal risk.
• interest-rate risk.
• money risk.

Question 2: In financial planning, a major activity component involves the

• allocation of current resources for spending.
• evaluation of investment alternatives.
• evaluation of one's career.
• selection of insurance coverage.
• establishment of credit.

Question 3: The Federal Reserve has the responsibility to

• monitor illegal business activities.
• approve spending by Congress.
• set federal income tax rates.
• maintain an adequate supply of money.
• maintain a balanced budget for the federal government.

Question 4: The _____ refers to stages that an individual goes through based on age, financial needs, and family situation.

• financial planning process
• financial cycle
• adult life cycle
• personal economic cycle
• tax planning process

Question 5: If you want your money to double in 12 years, what rate of return would you need to earn?

• 6%
• 8%
• 9%
• 10%
• 12%

Question 6: Higher employment levels can be attributed to

• lower consumer prices.
• reduced employment levels.
• lower interest rates.
• higher employment levels.
• increased consumer spending.

Question 7: When it comes to the financial planning process, the first step is to

• develop financial goals.
• implement the financial plan.
• evaluate and revise your actions.
• analyze your current personal and financial situation.
• create a financial plan of action.

Question 8: The simple calculation of interest can be performed by multiplying the amount in a savings account by the

• annual interest rate.
• annual interest rate and the time period.
• number of months in a year.
• time period and number of months.
• time period.

Question 9: Which goal below would be the easiest to implement and measure in terms of accomplishment?

• "Reduce our debt payments."
• Save $100 a month to create a $4,000 emergency fund."
• "Save funds for an annual vacation."
• "Invest $2,000 a year for retirement."

Question 10: _____ risk refers to the changing cost of money.

• Monetary
• Inflation
• Economic
• Personal
• Interest rate

Question 11: In order to evaluate present value scenarios, _____ is/are needed.

• multiplication
• compounding
• simple interest calculations
• discounting
• payment information

Question 12: Barb Hotchkins is in the 28% tax bracket. A tax-exempt employee benefit with a value of $600 would have a tax-equivalent value of

• $678.
• $628.
• $833.
• $300.
• $168.

Question 13: In order to evaluate one's current financial position (including net worth), the best tool that can be used is a

• budget.
• cash flow statement.
• bank statement.
• time-value-of-money report.
• balance sheet.

Question 14: A _____ résumé would best be used by an employee who has worked in many fields and has a variety of skills in a variety of work-related categories.

• targeted
• goal-oriented
• chronological
• functional
• career change

Question 15: When a prospective employee presents a _____ résumé, this means that educational and work experiences are presented in a reverse time sequence.

• goal-oriented
• functional
• sequenced
• chronological
• database

Question 16: A lack of _____ refers to a lack of willingness to accept a variety of employment positions and is a common career planning mistake.

• common sense
• flexibility
• training
• communication
• perseverance

Question 17: The distinction between current liabilities and long-term liabilities can be made based upon the

• amount owed.
• due date of the debt.
• interest rate charged.
• financial situation of the creditor.
• current economic conditions.

Question 18: Personal balance sheets can be used to analyze

• future income and expenses.
• the net worth of an organization.
• the cash flow of an individual or a family.
• debt payment activities.
• what an individual or family owes and owns.

Question 19: A person's financial position can be improved if he or she experiences

• increased liabilities.
• reductions in earnings.
• additional credit purchases.
• an increase in investments and savings.
• lower amounts deposited in savings.

Question 20: Which of the following situations best represents an individual facing insolvency?

• Assets $30,000; liabilities $37,000
• Assets $78,000; net worth $22,000
• Liabilities $45,000; net worth $6,000
• Assets $56,000; annual expenses $60,000
• Annual cash inflows $45,000; liabilities $50,000