BADM 2311 exam 1 Daniel
The Six-Step Financial Planning Process is 5
Use financial statements to evaluate results of plans and budgets, taking corrective action as required.
A budget is a detailed statement of what income and expenses occurred over a past period.
false
A long-term capital gain is taxed at the same rate as ordinary income.
false
A savings account may be a useful tool in managing everyday household transactions.
false
Approximately 50 percent of Americans prepare a detailed household budget.
false
Average propensity to consume refers to how much of your money you plan to save in your financial plan.
false
If you are married, you can legally file a single tax return.
false
Interest you earned on your savings account would be an entry on your personal balance sheet.
false
One's marginal tax rate is typically lower than one's average tax rate.
false
Saving accounts are sometimes referred to as demand deposits.
false
The Consumer Price Index (CPI) is the amount of goods and services each dollar buys at a given point in time.
false
The equity in your home is the difference between the loan balance and the purchase price.
false
The income and expense statement looks forward in time, while a budget is backward looking.
false
The minimum denomination for Treasury bills is now $1,000.
false
There is no limit on the amount of social security tax withheld annually.
false
Money market mutual funds are insured up to $250,000 by the FDIC if purchased at an insured bank.
false because its a mutual fund
A balance sheet is like a photograph of your financial condition, while an income and expense statement is like a motion picture.
true
A budget is a detailed financial forecast.
true
A house and land are examples of real property.
true
A person with a significant amount of investment income would have a high probability of needing to make estimated tax payments.
true
A short-term capital gain would be taxed at the same rate as your salary.
true
ATM transactions require the use of a PIN.
true
Credit unions typically pay higher rates of return on savings than banks and savings and loan associations.
true
Current consumption affects future consumption.
true
Debit and ATM card transactions are linked to your checking account.
true
If your bank states that it compounds monthly, the effective interest rate (APY) will be greater than the nominal interest rate.
true
Jewelry, furniture, and computers are examples of personal property.
true
One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account.
true
Personal financial planning involves translating financial goals into action plans.
true
Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or family.
true
Tax credits are dollar-for-dollar reductions in taxes due.
true
The Medicare portion of the FICA tax is paid on 100% of earnings.
true
The federal personal income tax is a progressive tax.
true
The heart of sound financial planning is improved standard of living.
true
Utility refers to the amount of satisfaction a person gets from buying certain items.
true
When the income and expense statement indicates a cash surplus, this may be used to increase net worth by increasing assets or decreasing liabilities.
true
Your personal value system will shape your attitude toward money and wealth accumulation. Correct!
true
The Six-Step Financial Planning Process is 1
Define financial goals.
The Six-Step Financial Planning Process is 2
Develop financial plans and strategies to achieve goals.
What is the rule of 72 and if you are making 2% per year, approximately how many years does it take to double your money?
36
The Six-Step Financial Planning Process is 3
Implement financial plans and strategies.
The Six-Step Financial Planning Process is 4
Periodically develop and implement budgets to monitor and control progress toward goals
The Six-Step Financial Planning Process is 6
Redefine goals and revise plans and strategies as personal circumstances change.
which goal has "Last resort assets"
long term goal
