FIN 300 Quiz 1

After putting your financial plan to work, you should periodically review and revise your plan, especially if you have all of the following, except: Get married Develop your goals Birth of a child Get divorced Spouse returns to school

Develop your goals

If the providers in the financial system dramatically change their behavior by significantly reducing their savings, this has the potential to: - Encourage users to borrow less. - Shut down all of the commodity markets - Lead to lower interest rates - Lead to higher interest rates - Shut down the financial system

Lead to higher interest rates

A common error made when solving a future of an annuity problem is: - Using factor tables to help solve the problem - Dividing the annual deposit by the number of years before calculating the problem - Using a financial calculator to help solve the problem - Multiplying the number of years and the interest rate before calculating the problem - Multiplying the annual deposit and the number of years before calculating the problem

Multiplying the annual deposit and the number of years before calculating the problem

The variables in a future value of a lump sum include all of the following, except: - Future value - Time period - Interest rate - Payments

NOT Future value

How would a decrease in the interest rate effect the future value of a lump sum, single amount problem (all other variables remain the same)? - Increase the time needed to save - Increase the present value - Decrease the future value - Decrease the present value - Increase the future value

NOT Increase the future value

Financial intermediaries' main goal is to: - Encourage users to borrow less - Encourage providers to save less - Provide funds at interest rate substantially above the market rate - Provide funds at an interest rate substantially below the market rate - Charge an amount that will pay them to operate and charge an adequate interest rate

Charge an amount that will pay them to operate and charge an adequate interest rate

How would an increase in the interest rate effect the present value of an annuity problem (all other variables remain the same)? - Increase the time needed to save - Increase the present value - Change the future value - Decrease the present value

Decrease the present value

The variable that you are solving for in a future value of a lump sum problem is: - Present Value - Time period - Interest rate - Payments - Future value

Future value

Goals that are SMART, include all of the following except: - Specific - Meaningful - Action-oriented - Realistic - Time-based

Meaningful

The first step in the financial planning process is to determine your current financial situation. This includes reviewing all of the following, except: Current Income Amount of savings Personal values Amount of expenses Debits owed

Not Amount of expenses

The variables in a present value of an annuity problem include all of the following, except: - Future value - Time period - Interest rate - Payments

Not time period

The primary goal of the Users in the Financial system is to: - Encourage other users to borrow less - Obtain funds for the least cost - Obtain funds at the highest interest rate - Avoid borrowing from the financial intermediaries - Disable the financial system

Obtain funds for the least cost

The variables in a present value of a lump sum problem include all of the following, except? - Present value - Time period - Interest rate - Payments

Payments

The variable that you are solving for in a present value of a lump sum problem is: - Present value - Time period - Interest rate - Payments - Future value

Present value

The variables in a future value of an annuity problem include all of the following, except: - Risk tolerance - Time period - Interest rate - Payments

Risk tolerance

A goal that would be considered measurable would be: - Pay off student debt - Plan a new vacation that costs $1000 - Save for a new car - Saving $200 per month - Reducing dining out to provide money for savings

Saving $200 per month

The paralysis of analysis means: - Spending time laying on the couch for an extended time period - Putting too many plans in action at once - Falling to complete personal financial statements - Spending so much time creating a plan that you never put it into action - Becoming disabled after falling on the ice

Spending so much time creating a plan that you never put it into action

The variable that you are solving for in a future value of an annuity problem is: - The future value - Time period - Interest rate - Payments

The future value

The variable that you are solving for in a present value of an annuity problem is: - The present value - Time period - Interest rate - Payments

The present value

Goals that are SMART, include all of the following except: - Specific - Measurable - Action-oriented - Realistic - Thoughtful

Thoughtful

How would a decrease in the interest rate effect the present value of a lump sum, single amount problem (all other variables remain the same)? - Increase the time present value - Increase the present value - Change the future value - Decrease the present value

Increase the present value