ch1 personal financ

What factor influences​ income? ​(Select the best answer​ below.) A. Career decisions Your answer is correct. B. How much you spend C. How many children you have D.

A.

What might be one of the opportunity costs of spending​ $10 per week on the​ lottery? ​(Select the best answer​ below.) A. Reducing debt by an additional $40 per month. Your answer is correct. B. The time spent buying the ticket. C. The lottery winnings. D. The expected winnings.

A. Reducing debt by an additional $40 per month. Your answer is correct.

A personal financial plan involves decisions​ about: ​(Select the best answer​ below.) A. financial goals and describes the​ spending, financing, and investing plans necessary to achieve those goals. Your answer is correct. B. personal goals and describes the education​, family size​, and living standard necessary to achieve those goals. C. financial goals and describes the education​, family size​, and living standard necessary to achieve those goals. D. personal goals and describes the​ spending, financing, and investing plans necessary to achieve those goals.

A. financial goals and describes the​ spending, financing, and investing plans necessary to achieve those goals.

Knowledge of tax laws allows you​ to: ​(Select the best answer​ below.) A. make more favorable choices. Your answer is correct. B. vote as an informed citizen. C. give tax advice to others. D. avoid paying taxes.

A. make more favorable choices

Personal financial planning is the process of planning​ your: ​(Select the best answer​ below.) A. spending in order to optimize your financial situation. Your answer is correct. B. family size in order to optimize your personal situation. C. education in order to optimize your personal situation. D. living standard in order to optimize your financial situation.

A. spending in order to optimize your financial situation. Your answer is correct.

Why is it important to track your spending before creating a​ budget? It is important to track your spending before creating a budget​ because: ​(Select the best answer​ below.) A. you may not need to create a budget if you have enough money to purchase everything you want. B. until you know what you spend money on it will be impossible to forecast all of your expenses. Your answer is correct. C. until you know what you spend money on it will be impossible to forecast all of your assets. D. you may not need to create a budget if you know what you spend money on.

B. until you know what you spend money on it will be impossible to forecast all of your expenses

What two factors are considered in managing​ liquidity? ​(Select the best answer​ below.) A. Mortgages and credit cards B. Checking accounts and savings accounts C. Money management and credit management Your answer is correct. D. Money management and savings accounts

C. Money management and credit management

Liquidity​ means: ​(Select the best answer​ below.) A. having enough money to invest. B. not having any debt. C. having sufficient funds to cover​ short-term cash deficiencies. Your answer is correct. D. not having any outstanding loans.

C. having sufficient funds to cover​ short-term cash deficiencies.

The six key components of a financial plan​ include: ​(Select the best answer​ below.) A. investing money and planning your family size. B. managing your vehicle fleet and sharing your money. C. investing money and financing large purchases. Your answer is correct. D. managing your vehicle fleet and financing large purchases.

C. investing money and financing large purchases.

An understanding of personal finance enables you​ to: ​(Select the best answer​ below.) A. understand the news. B. teach personal finance. C. pursue a career as a financial adviser. Your answer is correct. D. sit for a lisencing exam.

C. pursue a career as a financial adviser. Your answer is correct.

An opportunity cost​ is: ​(Select the best answer​ below.) A. what you gain by making a choice. B. what you would have spent on another choice. C. what you forgo as the result of a decision. Your answer is correct. D. what you spend when making a choice.

C. what you forgo as the result of a decision.

Why do most people need access to financing at some point in their​ life? Most people need access to financing at some point in their​ life: ​(Select the best answer​ below.) A. because they do not have the saving available to purchase big ticket items such as car insurance or health insurance. B. because they do not have the saving available to take a vacation. C. because they do not have the saving available to pay their bills. D. because they do not have the saving available to purchase big ticket items such as a house or a car.

D. because they do not have the saving available to purchase big ticket items such as a house or a car.

Net worth is important because​ it: ​(Select the best answer​ below.) A. has to be monitored. B. is reported in loan applications. C. is reported to the Internal Revenue Service. D. is a measure of​ wealth, and can be used to evaluate changes​ in, and develop strategies to​ increase, wealth.

D. is a measure of​ wealth, and can be used to evaluate changes​ in, and develop strategies to​ increase, wealth.

Credit management deals​ with: ​(Select the best answer​ below.) A. determining who to lend money to. B. deciding how much money to retain in liquid form and how much to invest. C. finding the best prices on products. D. the decisions you make on the amount of credit to use to support your spending.

D. the decisions you make on the amount of credit to use to support your spending.

Your net worth​ is: ​(Select the best answer​ below.) A. what you owe minus what you own. B. your assets plus your liabilities. C. what you own plus what you owe. D. your assets minus your liabilities.

D. your assets minus your liabilities.

With any investment there​ is: ​(Select the best answer​ below.) A. some loss. B. some gain. C. some risk. Your answer is correct. D. a required payment.

some risk.

The primary objective of investing is​ to: ​(Select the best answer​ below.) A. reduce risk. B. use funds not needed for liquidity purposes to earn a high return. Your answer is correct. C. use funds needed for liquidity purposes to earn a high return. D. avoid use of savings accounts.

use funds not needed for liquidity purposes to earn a high return.