Personal Financial Planning Process Flashcards

1
Q

Once a sound financial plan is in place, there should be no need to ever change it.

A

False

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2
Q

One purpose of financial planning is to help you legally reduce the amount of taxes you have to pay on your earnings.

A

True

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3
Q

Financial planning is an ongoing process. As your financial situation and position in life change, the plan changes.

A

TRUE

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4
Q

A short-term goal might take from 1 to 10 years to accomplish.

A

FALSE

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5
Q

Estate-planning tools such as wills, living wills, health proxies, powers of attorney, and record-keeping should all be in place to help protect you, your assets, and your heirs.

A

TRUE

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6
Q

Most individuals will reach their financial goals without planning or budgeting.

A

FALSE

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7
Q

The Covid -19 pandemic that began in 2020 demonstrated that most Americans have sufficient emergency funds.

A

False

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8
Q

Salaries vary for individuals working in similar jobs for different companies, but one thing is clear: the more specialized skills and training a job requires, the higher the job tends to pay

A

TRUE

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9
Q

All else being equal, an increase in inflation will cause investors to require a higher rate of return on an asset.

A

TRUE

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10
Q

Diversification allows you to reduce risk.

A

TRUE

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