Macro Ch. 4-8 unlimited questions
If I can invest a dollar today and earn interest on it, then it should be worth _________ in the future.
more
Attempts to increase income through employment are part of the_______ component of financial planning.
obtaining
The tangible and intangible factors that create a less than desirable situation is referred to as _______ risk.
personal
Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift so he can attend the concert, what kind fo cost is he incurring?
personal opportunity cost related to time
Which of the following would increase the interest rate for a loan?
poor credit rating
Changes in personal, social, and economic factors may require you to
review and revise your financial plan more frequently
In making financial decisions related to income involves all the following except -spending -saving -sharing -taking -all of these are financial decisions
taking
An example of a personal opportunity cost would be
time comparing several brands of personal computers
If a $10,000 investment earns a 7% annual return, what should its value be after 6 years?
$15,010
Randy Hill wants to retire in 20 years with $1,000,000. If he can earn 10% per year on his investments, how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar.
$17,460
If you begin savings $2,000 a year at 5% (from age 22 to age 30 or 9 years), what will these funds grow to in this time period?
$22,054
A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is a(n)
financial plan
The difficulty of converting savings and investments to cash is referred to as _______ risk
liquidity
Increased consumer saving and investing is likely to be accompanied by
lower interest rates
The 'borrowing' component in a financial plan relates to
maintaining control over credit-buying habits
If you want $1,000 three years from now and you warn 4 percent on your savings, how much do you need to deposit now?
$889
Which of the following is correct? - a car purchase is a consumable product goal. -entertainment is a durable product goal. -appliances and sporting equipment are intangible purchase goals. -leisure and education are durable product goals -food and clothing are consumable product goals
- food and clothing are consumable product goals
If inflation is expected to be 8 percent, how long will it take for prices to double?
9 years (72 rule)
which of the following is an example of a financial opportunity cost?
Forgoing wages to attend school
The goal of investing $50 per month for the next 12 years for your nephew's college fund is a(n)________ goal
Long-term
Many Americans have money problems because of
Poor planning and weak money management habits
The consumer price index measures:
The average change in prices of goods and services of urban consumers
The rule of 72 is:
Used to estimate how fast prices will double using a given annual inflation rate
The saving component of financial planning focuses on long-term security and includes:
a regular savings plan for emergencies
The stages in the family situation and financial needs of an adult is called the
adult life cycle
Who is less likely to be harmed by inflation?
borrowers
The problem of bankruptcy is associated with overuse and misuse of credit in the ________ component of financial planning.
borrowing
Future value computations are often referred to as
compounding
The first step of the financial planning process is to
determine your current financial situation
present value computations are also referred to as
discounting
________ goals relate to infrequently purchased, purchased, expensive tangible items.
durable-product
Every decision involves uncertainty, which is referred to as
evaluating risk
An investor should expect to receive a risk premium for
higher uncertainty about getting his/her money back
The loss of a job or encounter an illness results in _______ risk.
income
An advantage of effective personal financial planning is
increased control of financial affairs
Which of the following best describes the concept of the time value of money?
increases in an amount of money as a result of interest earned
The rising or falling of prices that causes changes in buying power is referred to as _______ risk
inflation
changes in the cost of money is referred to as ______ risk.
interest-rate
To calculate the time value of money, we need to consider all the following except the -amount of the savings -annual interest rate -length of time the money is on deposit -type of investment -principal
type of investment
Opportunity cost refers to
what you give up by making a choice
