Chapter 1 - Fin 101

Bill is concerned about his year-end tax payments. What are some options that are available to him to lessen his concerns? Multiple select question. Bill can increase his tax withheld from each paycheck. Bill can file quarterly tax payments. Bill can change his tax bracket by claiming all his expenses as work related to decrease his taxable amount of income. Bill can estimate his tax amount due and pay one lump sum payment when his taxes are due.

Bill can increase his tax withheld from each paycheck. Bill can file quarterly tax payments.

Opportunity cost is what you give up by making a choice. True false question.TrueFalseReason: Opportunity cost is what you give up by making a choice.

true

True or false: Frank can invest some of the money he has been saving in the stock market now; however, that would probably require some trade-offs on his part. True false question. True False

true

True or false: Three items needed to calculate future value include: principal, length of time, annual interest rate. True false question. True False

true

The ________ environment includes various institutions, including businesses, labor, and government, that work together to satisfy needs and wants. (Enter one word per blank.)

economic

The three elements that affect personal financial planning are your life situation, personal values, and current economicBlank 1Blank 1 economic , Correct Unavailable conditions.

economic

An annuity is a series of _____ deposits. Multiple choice question. unequal small large equal

equal

True or false: Everyone has the same personal financial goals. True false question.TrueReason: People have some common financial goals, but each person will have slight variations in how they will achieve their goals. False

false

Determining your current financial situation regarding income, savings, living expenses, and debts is the _______ step in the financial planning process. Multiple choice question. second third last first

first

The amount to which current savings will increase based on a certain interest rate and a certain time period is called: Multiple choice question. deflation rate discount interest future value present value

future value

The amount to which current savings will increase based on a certain interest rate and a certain time period is called: Multiple choice question. future value deflation rate discount interest present value

future value

The third step in the financial planning process is: Multiple choice question. developing financial goals reviewing or revising the financial plan identifying alternative courses of action evaluating risk

indentifying alternative courses of action

Question Mode Multiple Choice Question Future value computations are often referred to as compounding, as _____. Multiple choice question. it has nothing to do with the time value of money it involves financial opportunity cost interest is earned on previously earned interest it is always equal to the present value of the interest amount

interest is earned on previously earned interest

When people first begin planning for retirement, saving for a child's college education, and planning the purchase of a vacation home, these are usually: Multiple choice question. long-term goals intermediate goals short-term goals

long term goals

What are some of the methods that can be used to compute time value of money? Multiple select question. mathematical formulas bank statements financial calculator measuring tape and ruler time value of money tables

mathematical formulas, financial calculator, and time value of money tables

What type of global influence does American consumption have on foreign companies? Multiple choice question. The global economy is solely driven by American consumption. American consumption is a small part of the global economy. American consumption is the only part of the global economy. American consumers provide foreign companies with a market.

American consumers provide foreign companies with a market.

The Fed has indirect control over interest rates. This will have an influence on which of the following items: Multiple select question. Business expansion Government policy Consumer spending Tax laws

Consumer Spending

The amount to which current savings will increase based on a certain interest rate and a certain time period is called: Multiple choice question. deflation rate future value present value discount interest

Future value

You are thinking of investing and you are concerned about the risk involved. Which of the following can be used to evaluate the risk that is involved? Multiple choice question. Evaluate risk by reading financial investing materials and invest in only low-risk investments. Invest your money exclusively for long-term growth, not short-term gains. Pay a financial representative to invest your money for you and read the Wall Street Journal. Identify a successful investor as a mentor and read financial planning sources to gain knowledge.

Identify a successful investor as a mentor and read financial planning sources to gain knowledge.

True or false: Frank can invest some of the money he has been saving in the stock market now; however, that would probably require some trade-offs on his part. True false question. True False

True

Your life situation, personal values, and economic factors influence what? Multiple choice question. Your personal values Financial knowledge Your financial plan Your financial problems

Your financial plan

According to your text, when there are influences on personal financial planning, what three elements should be assessed? Multiple choice question. Your life situation, personal values, and economic factors Global markets, opportunity costs, and personal values Financial wealth, personal values, and opportunity costs Total financial wealth, goals, and economic factors

Your life situation, personal values, and economic factors

American consumers spend dollars on goods and services. The goods and services are manufactured or offered by American companies and companies from other countries. This is an example of: Multiple choice question. a global economy and foreign competition personal values and spending habits economies and competition economic factors and opportunity cost

a global economy and foreign competition

In order to evaluate risk, people need Multiple choice question. television shows about investments websites about investments the Wall Street Journal reliable information

reliable information

The purpose of the Federal Reserve System is to: Multiple choice question. maintain adequate money supply and increase GDP house the country's gold reserves act as the central bank and maintain an adequate money supply develop new laws and determine their merit

act as the central bank and maintain an adequate money supply

The Fed influences the money supply by: Multiple select question. buying and selling government securities creating government policy controlling interest rates influencing tax laws

buying and selling government securities controlling interest rates

The Fed has indirect control over interest rates. This will have an influence on which of the following items: Multiple select question. Consumer spending Tax laws Government policy Business expansion

consumer spending and business expansion

Examples of opportunity costs do NOT include: Multiple choice question. having enough money to fund retirement and pay for current expenses Reason: The reason that this is not opportunity cost is because no choice was made. There was enough money for both goals. forfeiting interest and taking money from savings and purchasing new appliances to save energy costs not getting a high yield because you have set aside funds in a low-risk investment

not having enough money to fund retirement and pay for current expenses

Paul can invest his money in the stock market now instead of buying a new car; however, that would require a trade-off or: Multiple choice question. financial burden liquidity rationing opportunity costs

opportunity cost

Which of the following do not influence personal financial planning, as shown in the fourth step of the financial planning process? Multiple choice question. Economic factors or conditions Reason: Economic factors play a role in personal financial planning. Political orientation of the investor Life situation of the investor Reason: Life situation plays a role in personal financial planning. Personal values of the investor Reason: Personal values play a role in personal financial planning.

political orientation

Discounting is the process of calculating: Multiple choice question. annuity value future value value of money present value

present value

The definition of personal financial planning is: Multiple choice question. a formalized report that summarizes your current financial situation determining personal and financial opportunity costs associated with personal financial decisions the process of managing your money to achieve personal economic satisfaction ideas and principles that a person considers correct, desirable and important

the process of managing your money to achieve personal economic satisfaction

What is the definition of the adult life cycle? Multiple choice question. The stage of life when a person becomes an adult The stages in the family and financial needs of an adult The portion of the life cycle of a person's life that begins the adult portion of the life cycle The portion of the life cycle that is an adult

the stages in the family and financial needs of an adult

What measures the increase in an amount of money as a result of interest earned?

time value of money

Samantha is trying to decide between two investments. The first one will earn 5% simple interest annually. The second investment will earn 5% compounded quarterly. Assuming they have the same amount of risk, which is the better investment? Multiple choice question. Both will earn the same amount. Neither is a good investment. 5% compounded quarterly 5% simple interest

5% compounded quarterly

When determining goal-setting guidelines, what three things should you take into account?

Investing activities Spending Saving

The current value of an amount at some time in the future, based on a certain interest rate and a certain time period is called: Multiple choice question. discount interest deflation rate present value future value

Present value

What is the Federal Reserve doing when it lends more money, buys government bonds, and changes interest rates? Multiple choice question. The Fed is decreasing the value of the dollar. The Fed is trying to prevent a run on banks. The Fed is maintaining or increasing the money supply. The Fed is decreasing the national money supply.

The fed is maintaining or increasing the money supply

What measures the increase in an amount of money as a result of interest earned? Multiple choice question. Inflation rate Trade balance Personal opportunity costs Time value of money

Time value of money

So many Americans have money problems because (Select all that apply.) Multiple select question. of poor planning of weak money management habits the United States is a poor country goods and services are hard to find in the U.S.

poor planning and weak money management habits

The current value of an amount at some time in the future, based on a certain interest rate and a certain time period is called: Multiple choice question. deflation rate discount interest present value future value

present value

The current value of an amount at some time in the future, based on a certain interest rate and a certain time period is called: Multiple choice question. future value present value discount interest deflation rate

present value

What is the current value of a future amount based on a certain interest rate and a certain time period? Notice that the future value is already known. You want to find the current value of that amount. Multiple choice question. Annuity plan Present value Future value

present value

What measures the increase in an amount of money as a result of interest earned? Multiple choice question. Time value of money Trade balance Inflation rate Personal opportunity costs

time value of money

When setting financial goals, you should ensure they are: Multiple select question. time-based action-oriented specific measurable unrealistic

time-based action-oriented specific measurable

What is another term for opportunity cost? Multiple choice question. Exchange rate Trade-loss Trade-off Opportunity loss

trade-off