Financial planning chapter two

Another name for the Net Worth Statement is . . .

Balance Sheet

A ____________ is a nonprofit, member-owned financial cooperative

Credit union

The amount of mortgage payments due within the next twelve months would appear under the category of _____ on one's balance sheet.

Current Liabilities

Which of the following is most easily changed to improve the client's financial situation?

Discretionary Expenses

In the FICO scoring system, how much you owe has more weight than your payment history for determining your credit score.

False

Insurance premium payments on a personal vehicle would fall into which category of the Cash Flow Statement?

Fixed Expenses

Budgets are:

Forward-looking.

Which of the following is not characteristic of Brokerage Accounts?

Interest income deferral.

Pedro has a Net Worth of $35,000 on his Balance Sheet. He decides to take an extra $1,000 from his savings account to make an additional payment on his mortgage. How will this move impact Pedro's net worth?

Net Worth will remain unchanged

Financial planning requires converting qualitative concepts into which of the following

Quantitative numbers, cash flows and strategies

Which of the following is the first step in the Flow of Financial Statements?

The Budget Tool

Which of the following could be considered a discretionary expenses?

Travel

Compared to banks, credit unions are generally assumed to have lower fees, lower borrowing rates, lower minimums, and higher savings interest rates (though in practice that may not always be the case).

True

FDIC Deposit Insurance Coverage provides coverage on up to $250,000 of deposits per individual per bank. Backed by the United State's government, FDIC Insurance covers losses (up to the defined limit) a consumer may face should a bank fail.

True

The most well-known credit scoring system was developed by Fair Isaac Corporation and is called the FICO score.

True

You are solvent if your

total assets exceed total liabilities

f your ____, your net worth on the balance sheet would increase.

assets increase and liabilities remain constant