Financial Planning Ch. 1 (BMGMT 105)

what financial goals and activities would be best suited for single adults aged 18-35?

- establishing financial independence - purchasing disability insurance - considering home purchase for tax benefit

saving every month for a down payment on a house affects how soon you are able to purchase a home, its an example of what kind of goal

a short-term goal that affects a long-term goal

whats the first step in the financial planning process

determine your current financial situation

What are some factors that cause people in their 50s to spend money differently than people in their 20s

household size, income levels, personal beliefs

fred has good credit and can borrow at 5%. bob has poor credit and can borrow at a rate of 11%. What is the amount of risk premium that bob will pay

6% risk premium 11%-5%

what would be best suited for young couples with children under age 18 (adult life cycle)

carefully managing credit, purchasing life insurance for care of dependents, naming guardians of children in your will

after considering the alternative courses of action to reach financial goals, one of the possible courses of action is to:

continue the same course of action

deflation is a decline in prices, which often results in consumers ______ their spending as they expect prices to go even lower

decreasing

determining your current situation involves what steps?

identifying current income, savings, living expenses, and debts preparing your personal financial statements

Hidden inflation exists when the cost of ______ rise at a higher rate than ______ items.

necessities; nonessential

you should do a complete review of your finances how often

once a year

what following activites would be best suited for older couples (50+) with no dependent children at home?

reviewing estate plans and financial assets changing household budgets prior to retirement

identify the stage of the adult life cycle that influences the financial activities and decisions

the stages in the family situation and financial needs of an adult

what stage of the adult life cycle that influences the financial activities and decisions

the stages in the family situation and the financial needs of an adult