FIN101 Exam #2

Which of the following time orientations is most closely associated with a lack of goal orientation, a general feeling of hopelessness, and general pessimism?

Past-negative.

All of the following influence your human capital, except:

your income

Which of the following statements is true?

Converting human capital to financial wealth depends on wise planning and management.

Which of the following statements about a person's health and wealth is false?

Healthy people spend more money on food and exercise, which reduces their lifetime wealth accumulation.

Lifetime earnings and education are positively related. Select the ranking that represents the median lifetime earnings based on education achievement from lowest to highest:

High School Diploma, Bachelor's Degree, Doctoral Degree, Professional Degree.

Which of the following elements influence your view of the financial world? I.Your risk tolerance II.How much you believe you control your financial future. III.Knowledge about personal finance topics

I, II, and III

Takashi is a foreign-exchange engineering student. His English skills are limited but given his major in college, this has not been a big problem. Jorge is also a foreign-exchange student. He is studying finance and is active in his fraternity. Kim is not enrolled in college. She works 40 to 50 hours a week as a warehouse supervisor; when she is not working, she prefers reading books. Who is most likely to have the highest social capital today and in the future?

Jorge

Mike earned his bachelor's degree in history 3 years ago and started working shortly thereafter as a teacher. Michelle earned her high school degree 5 years ago and took a job right out of school. Maria earned her associate's degree last year and started work right after graduation. During the next economic recession, who is generally, most likely to be unemployed?

Michelle.

Barbara is considering two career and educational options, both of which she is excited about. Both options would cost approximately $86,000 in tuition, room, living expenses, books, travel, and fees. Pursuing Option 1 would lead to a job after graduation earning approximately $35,000 per year. Option 2 would lead to a job after graduation earning approximately $40,000 per year. Based on this information, which option has the shortest payback period?

Option 2.

Nick, a skilled welder, had been working for 12 years in a factory that recently closed. This has caused high unemployment in his town and region. If Nick is concerned about maximizing his human capital and lifetime wealth accumulation, which action would be most beneficial?

Relocate to a place where his welding skills will be valued in the market place.

Lance is 25 years old, well-educated, and a smoker. Robb is 35 years old, well-educated, and regularly drinks alcohol. Tammy is 40 years old, well- educated, drinks a glass of orange juice daily, and exercises regularly. Who has the most human capital potential?

Tammy.

People who ____________ are less likely to feel that they are in control of their financial future.

believe strongly in luck and fate

Your ability to earn money over the working lifetime is called:

human capital.

Ruby, age 50, is considering going back to school. She would like to retire at age 67. She currently earns $50,000 per year. If she goes back to college and completes a graduate degree, she will earn $55,000 per year. If the total cost of the graduate degree is $75,000, Ruby should:

only go back to school if the time and effort will result in an increase in personal satisfaction and fulfillment.