Ch 1

If an investor put away $3000 at age 23 rather than age 31, how much more money would he or she have at age 63, assuming a 9 percent compound rate of return?

$46,938

The most recognized professional designation for financial planners is the

CFP

Of the following, which is the best indicator of where the economy is headed over the next year or so? Inflation rate b. Gross domestic product c. Index of leading economic indicators d. Federal funds rate

c

You are most likely to receive unbiased financial advice from a

fee-only financial planner.

A condition of a steady rise in the general level of prices is known as

inflation

In personal finance, the word marginal means

of, or for, the next one.

A type of employee benefit plan where employees choose their benefits from a list of taxable cash and one or more qualified nontaxable benefits is called a(n)

cafeteria plan

If you want to know whether it is better to receive $10,000 today or $1500 per year for eight years, you can

calculate the present value of the eight payments and compare to $10,000.

Interest earned on interest is referred to as

compound interest

Compensation for employment that is not in the form of wages, salaries, commissions, or other cash payment is called a(n)

employee benefit

Financial advisors that adhere to a ______ standard must always act in the best interest of the client regardless of how it may affect the advisor.

fiduciary

An employer-sponsored account that allows employee-paid expenses for medical care or dependent care to be paid with an employee's pretax dollars rather than after-tax income is a(n)

flexible spending account (FSA).

The market value of all goods and services produced by workers and capital located in the United States is labeled the

gross domestic product

You go home for the weekend rather than take a friend's shift at work on Saturday. The money you could have earned is the ______ of making the visit.

opportunity cost

Income exempt from current taxation, but for which taxes will likely be paid at a later date, is said to be

tax-sheltered