Week 1 Quiz Flashcards
T/F:
Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.
True
T/F:
The most effective way to achieve financial objectives is through personal financial planning.
True
T/F:
The need for financial planning declines as your income increases.
False
T/F:
When you get your first job, you should make a good financial plan that you can follow without making changes until you retire.
False
T/F:
Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
True
T/F:
Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth of income.
True
T/F:
The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
True
T/F:
Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the economy.
False
T/F:
Living costs are constant throughout the country.
False
T/F:
Geographic factors affect your earning power.
True
T/F:
Marital status affects the income level of individuals.
True
T/F:
Setting long- and short-term career goals helps in career planning.
True
T/F:
Career plans should not be changed after long- and short-term career goals are set.
False
Personal financial planning is important because it:
results in an improved standard of living
What is the term for the net total value of all the items that an individual owns?
wealth
The purchase of a car is an example of:
consuming
The last step in the financial planning process is to:
redefine goals and revise plans and strategies as personal circumstances change
Which of the following financial goals is most useful for developing a financial plan?
Make a $12,000 down payment on an automobile in four years.
Financial plans include setting goal dates, which are dates in the:
future when the goals are expected to be achieved.
Which of the following statements about setting long-term goals is true?
the goals should be realistic
Which of the following is one of the most emotional issues in any relationship, including that with a partner, parents, or children?
money
Which of the following practices helps an individual survive in a financial crisis?
Establishing an emergency fund with six months’ worth of income
Between the ages of 65 and 80, income tends to:
decrease
Which of the following represents the three stages of the financial planning life cycle?
Wealth accumulation, wealth preservation, and wealth transfer
Which of the following would NOT be considered an asset?
credit card balance
Something we owe and that is measured by the amount of debt we incur is:
a liability
The financial planning process helps in:
increasing assets
Which of the following is an example of a liquid asset?
a savings account
Which of the following statements about investments is true?
The length of time for which money is invested is important.
Tax planning is most commonly done to:
minimize taxes
Estate planning involves:
considering how your wealth can be most effectively passed on to your heirs.
Which of the following is true of professional financial planners?
They provide services on a fee or commission basis.
The amount of goods and services each dollar buys at a given time is called:
purchasing power
Which of the following statements about the earning power of an individual is true?
Income varies across different geographic locations due to varying costs of living.
Generally leading to an increase in income potential in one’s career is a person’s:
formal education
