BUS312 Final Exam

A career plan provides guidance to help you attain your career goals. (T/F)

True

Inflation is defined as steady rise in the general level of prices. (T/F)

True

Tangible assets are assets whose primary purpose is to provide maintenance of a lifestyle. (T/F)

True

The basis for financial planning is...

a budge.

The formula for calculating net worth is...

assets minus liabilities.

A balance sheet includes...

assets, liabilities, and net worth.

The two most useful financial statements are...

cash-flow statements and balance sheets.

The full additional cost of credit measured in dollars is called the...

finance charge.

The speed and ease by which an asset can be converted into cash is referred to as its...

liquidity.

Financial Literacy is...

your knowledge of facts, concepts, principals, and technological tools that are fundamental to be smart about money.

Taxpayers with taxable incomes up to ________ can use the IRS tax tables.

$100,000

What would be considered smart financial planning?

Contribute to your employer-sponsored 401(k) retirement plan at least up to the amount of the employer's matching contribution.

The most well-known of the many different types of credit scores used by lenders today is the...

FICO Score.

A balance sheet shows flows of income in and expenses out of your finances for a given period of time. (T/F)

False

A consumer that has non mortgage debt repayments of 10% or more of annual take-home pay is seriously in debt. (T/F)

False

A regressive tax is one that demands a higher percentage of a person's income as income increases. (T/F)

False

Credit cannot be used to own expensive products sooner. (T/F)

False

Financial planning is only for the rich. (T/F)

False

In times of high inflation, personal incomes generally keep up with the rate of inflation. (T/F)

False

It is usually easy to reduce a fixed expense. (T/F)

False

Simple interest will produce larger investment values than compound interest. (T/F)

False

Tax avoidance is illegal whereas tax evasion is legal. (T/F)

False

The liquidity ratio measures how much savings a person has in the bank. (T/F)

False

The liquidity ratio reveals how many months it would take to convert all assets into cash.

False

What is a sign of overindebtedness?

Requesting new credit cards and increases in credit limits.

It is not necessary that your values be consistent with your financial and lifestyle goals. (T/F)

False

Values have little impact on financial goals. (T/F)

False

What is one key interest rate to focus on when trying to forecast interest rate trend in the future?

Federal Funds Rate.

What would be included in the category of assets known as monetary assets?

Money market accounts.

________ is the current value of an asset that will be received in the future.

Present value

What makes a well-stated financial goal?

SMART Specific Measurable Achievable Relevant Time-bound

Matthew is concerned about his ability to save money regularly and has prepared a budget. What budget classification would be most appropriate for Matthew's budget?

Savings withheld from income and deposited directly to savings.

A cash-flow statement shows flows of income in and expenses out of your finances for a given period of time. (T/F)

True

A progressive tax is one that demand a higher percentage of a person's income as income increases. (T/F)

True

Checks allow you to transfer funds from your account to other people and organizations. (T/F)

True

Credit is a term used to describe any situation in which goods, services, or money is received in exchange for a promise to repay at a future date. (T/F)

True

Effective career planning will help you identify an employment pathway that aligns your interest and abilities with the tasks and responsibilities expected by employers. (T/F)

True

Keeping track of all income and expenses is very important to achieving your financial objectives. (T/F)

True

Misusing credit and not paying bills on time can damage employment prospects. (T/F)

True

Monetary assets include cash and near-cash items that can be readily converted to cash. (T/F)

True

Taxpayers are required to pay taxes throughout the year via either payroll withholding or by paying estimated taxes. (T/F)

True

The concept of "pay myself first," saving and investing before you pay other expenses, is a characteristic of successful financial mangers. (T/F)

True

The consumer price index is a broad measure of changes in the prices of all goods and services purchased for consumption by urban households. (T/F)

True

When one forgoes buying a new television set because he or she spends the money on college books, the television set is the opportunity cost of buying the books. (T/F)

True

You cannot build financial security or wealth unless you spend less than you earn. (T/F)

True

Who should set your debt limit?

You bitch

The primary reason for giving a child an allowance is to...

teach the child about how to manage money.

The US government measures inflation using...

the consumer price index.

Certificates of deposit (CDs) tend to pay higher rates of interest than money market accounts because...

the investor agrees to leave his or her money in the CD for a specified period of time while he or she has free access to the fund in a money market account.

Food, clothing, and entertainment are examples of...

variable expenses.