Personal Finance

1) The amount of money you have left over each month is most directly related to your plans to manage ________. A) fixed expenses B) liquidity C) investments D) long-term savings

B

A) fixed expense B) variable expense money spent on clothing in one month

B

A) outflow B) inflow interest Nicole earns from her savings account

B

Justyna is working on a personal balance sheet. She has $575 in a checking account, $650 in a savings account, $500 in government bonds, and $1,400 in stocks. How much does Justyna have in investments?

$1,900

A) fixed expense B) variable expense monthly gym membership fee

A

3) Which of the following questions would you be most likely to ask when creating a plan for investing? A) What expenses should I anticipate? B) Should I use a credit card for cash shortfalls? C) How much risk can I tolerate? D) How much money should I keep in my savings account?

C

Cash outflow refers to money that an individual spends.

True

Cash plays a central role in your financial plan.

True

To assess the accuracy of your budget, you should compare cash flow forecasts for each month.

True

Turning a personal cash flow statement into a budget for an entire year requires precision and accuracy.

True

Your budget should help you anticipate future cash shortfalls.

True

A) fixed expense B) variable expense money spent on a car loan payment in one month

A

A) fixed expense B) variable expense monthly rent

A

A) outflow B) inflow interest Nicole is charged on her credit card balance

A

A) outflow B) inflow the amount that Nicole spends on gas for her car each week

A

A) outflow B) inflow the price of a ticket for a concert Nicole goes to

A

Christine is creating a personal balance sheet and has begun classifying her assets. Which of the following should Christine classify as a liquid asset? A) her checking account B) her car C) her real estate investments D) her mutual fund

A

2) Money that an individual spends is referred to as ________. A) cash inflow B) liquidity C) investment D) cash outflow

D

As your financial goals become more involved, you will need a more ________ financial plan. A) general B) creative C) standard D) specific

D

Financial goals that will take more than five years to accomplish should be categorized as ________ goals. A) life-long B) short-term C) intermediate-term D) long-term

D

To figure your personal balance sheet, you would need to conduct research to estimate the market value of your ________. A) stocks B) bonds C) liquid assets D) household assets

D

Of the following, it is most important for your financial goals to be ________. A) long-term B) varied C) achievable D) demanding

C

The defining characteristic of a liquid asset is its ________. A) ability to earn interest B) market value C) quick availability D) diversification

C

To make a financial forecast, it is most important to evaluate and make predictions about your ________. A) assets B) debt C) cash flows D) wages

C

Which of the following is NOT a typical asset listed on a personal balance sheet? A) investments B) liquid assets C) cash inflows D) household assets

C

Cash inflow refers to money received from income but not other sources.

False

Financial plan questions about cash inflows and cash outflows taper off as an individual begins his or her career.

False

The effects of financial decisions are typically easy to anticipate

False

Each stage of creating a financial plan involves asking yourself challenging questions and making challenging decisions

True

It is possible to adjust your budget once you have started to use it.

True

Sal has invested in two different stocks over the past few years. He has 22 shares of Company A's stock, which is currently selling at $45 per share. He also has 130 shares of Company B's stock, which is currently selling at $75 per share. What is the total value of Sal's stock holdings?

$10,740

Andrew is evaluating his current financial position by totaling his monthly cash inflows and outflows. His cash inflows each month are $60 in allowance and $240 in wages from his part-time job working at the pet store. His cash outflows each month are $170 for his car payment, $70 in entertainment, and $45 for gas and food. How much, if anything, does Andrew have left over each month?

$15 left over

To determine his net worth, Afzal has gathered information on all of his assets and liabilities. He has $4,350 in household assets, $400 in liquid assets, and Series EE bonds currently worth $785. Afzal's only liability is the remaining balance of his car loan, which is $1,250. What is Afzal's net worth?

$4,285

4) When creating a plan for ________, you would likely ask yourself what expenses you anticipate and what regular debt payments you need to make. A) managing your income B) financing C) protecting your assets D) investing

B

A) fixed expense B) variable expense money spent on entertainment in one month

B

A) fixed expense B) variable expense money spent on gas in one month

B

A) outflow B) inflow allowance Nicole receives from her parents

B

A) outflow B) inflow the tips Nicole makes waiting tables at a restaurant

B

Financial goals that you plan to accomplish within the next year should be categorized as ________ goals. A) immediate B) short-term C) intermediate-term D) long-term

B

Which of the following suggestions for financial goal setting would you be LEAST likely to find on a reputable financial planning Web site? A) Have a plan of action to accomplish your goals. B) Set general rather than specific goals. C) Be realistic in both your long-term and short-term goals. D) Put your goals in writing.

B