FIN4140 PERSONAL FINANCE CHAPTER 1 HOMEWORK
g. Why is Principle 10 the most important principle? Why is it equally relevant to financial and career planning? A. Principle 10, "just do it", means that Jeremiah and Bethany must make a commitment and avoid procrastination - both critical strategies for success in financial or career planning. Furthermore, positive reinforcement from making progress toward their goals and taking control of their careers and their finances should provide momentum to keep them committed and successful. B. Principle 10, "just do it", means that Jeremiah and Bethany must avoid commitments and procrastinate - both critical strategies for success in financial or career planning. Furthermore, making progress toward their goals, their careers and their finances should provide momentum even without commitment.
A. Principle 10, "just do it", means that Jeremiah and Bethany must make a commitment and avoid procrastination - both critical strategies for success in financial or career planning. Furthermore, positive reinforcement from making progress toward their goals and taking control of their careers and their finances should provide momentum to keep them committed and successful.
Jeremiah, an accountant, and Bethany just returned from their honeymoon in the Bahamas. They celebrated their marriage and the completion of Bethany's M.B.A. program. They have been encouraged by their parents to establish some personal and financial goals for the future. However, they do not know how to set or achieve these goals. They know that they would like to own their own home, and have children, but those are the only goals they have considered. Jeremiah knows of a financial advisor who might be able to help them with their predicament, but they don't think they can afford professional help. b. What financial goals (short-term, intermediate-, and long-term) would you determine to be the most important, or least important, to Jeremiah and Bethany considering their current life cycle stage? Support your answer. A long term goal that should be important to Jeremiah and Bethany is: A. saving for retirement. B. beginning to save for an emergency fund and changing careers. C. calculating how much they will receive from Social Security when they retire, so they can retire as soon as possible. D. paying off any debt they brought to the marriage, reviewing their insurance coverage, and beginning to save for an emergency fund.
A. saving for retirement.
Financial security comes from balancing what you _____with what you ____to meet the needs of today and tomorrow. Financial planning is critical to making that happen. Principle 4 cautions that the tax implications of earning and investing require Jeremiah and Bethany to consider how to______ the money available after paying their taxes. Principles 5 and 7 parallel the other principles of plan development. _______events in life demand access to cash and ______in the budget, or financial plan, to accommodate those costs. _______insures access to savings without a loss of value. Likewise, planning ahead by purchasing insurance _____provides coverage in the event the loss exceeds what can comfortably be paid from personal savings due to a major (or minor) catastrophe.
Answers in order of blanks. earn spend maximize unexpected flexibility liquidity protection
Jeremiah, an accountant, and Bethany just returned from their honeymoon in the Bahamas. They celebrated their marriage and the completion of Bethany's M.B.A. program. They have been encouraged by their parents to establish some personal and financial goals for the future. However, they do not know how to set or achieve these goals. They know that they would like to own their own home, and have children, but those are the only goals they have considered. Jeremiah knows of a financial advisor who might be able to help them with their predicament, but they don't think they can afford professional help. a. If you were serving as the couple's financial advisor, how would you explain the five steps in the financial planning process and their importance to future financial success? a. The five steps in the financial planning process are: (Select the best answer below.) A. evaluate your financial goals, define your career goals, develop a plan of action, implement your plan, and finally, review your progress, reevaluate, and revise your plan. B. evaluate your financial health, define your financial goals, develop a plan of action, implement your plan, and finally, review your progress, reevaluate, and revise your plan. C. evaluate your financial health, define your career goals, develop a plan of action, obtain a full-time job, and finally, review your progress, reevaluate, and revise your plan. D. evaluate your financial health, define your financial goals, develop a plan of action, implement your plan, and finally, review your progress to see that you have achieved all your goals. Then your financial planning process is complete.
B. evaluate your financial health, define your financial goals, develop a plan of action, implement your plan, and finally, review your progress, reevaluate, and revise your plan.
e. Young professionals can insure success in their chosen careers by: A. doing whatever it takes, legal or illegal, to get to the top. B. understanding and using the organizational power structure to their benefit, including being loyal and supportive of the boss. C. updating and maintaining marketable skills, especially those that are not easy to duplicate. D. building a visible reputation for good work, a willingness to take on new challenges, and an image that fits the organization. E. developing a strong network of people knowledgeable of their character and capabilities. F. highlighting their ability to multi-task by talking on the phone with their friends while working.
B. understanding and using the organizational power structure to their benefit, including being loyal and supportive of the boss. C. updating and maintaining marketable skills, especially those that are not easy to duplicate. D. building a visible reputation for good work, a willingness to take on new challenges, and an image that fits the organization. E. developing a strong network of people knowledgeable of their character and capabilities.
Why do "ethical violations end careers"? A Although ethical behavior has always been a professional expectation, recent national attention on the "transparency" of corporate and individual actions has increased the importance of ethical behavior. A boost of confidence by the boss or other co-workers in individual professional integrity can end a career. B. Although ethical behavior has always been a professional expectation, recent national attention on the "transparency" of corporate and individual actions has decreased the importance of ethical behavior. A loss of confidence by the boss or other co-workers in individual professional integrity doesn't usually end a career. C. Although ethical behavior has always been a professional expectation, recent national attention on the "transparency" of corporate and individual actions has increased the importance of ethical behavior. A loss of confidence by the boss or other co-workers in individual professional integrity can end a career. D. Recent national attention on the "transparency" of corporate and individual actions means it is harder to hide unethical behavior. Most corporations now have a professional expectation of ethical behavior, which should be upheld unless you are sure no one will find out about your unethical behavior.
C. Although ethical behavior has always been a professional expectation, recent national attention on the "transparency" of corporate and individual actions has increased the importance of ethical behavior. A loss of confidence by the boss or other co-workers in individual professional integrity can end a career.
Jeremiah, an accountant, and Bethany just returned from their honeymoon in the Bahamas. They celebrated their marriage and the completion of Bethany's M.B.A. program. They have been encouraged by their parents to establish some personal and financial goals for the future. However, they do not know how to set or achieve these goals. They know that they would like to own their own home, and have children, but those are the only goals they have considered. Jeremiah knows of a financial advisor who might be able to help them with their predicament, but they don't think they can afford professional help. b. What financial goals (short-term, intermediate-, and long-term) would you determine to be the most important, or least important, to Jeremiah and Bethany considering their current life cycle stage? Support your answer. b. As newlyweds, short-term goals important to Jeremiah and Bethany might include: (Select the best answer below.) A. purchasing a home and starting a college fund for any children they might have. B. paying off any debt they brought to the marriage and planning their second honeymoon for their 25th anniversary. C. paying off any debt they brought to the marriage, reviewing their insurance coverage, and beginning to save for an emergency fund. D. saving for retirement.
C. paying off any debt they brought to the marriage, reviewing their insurance coverage, and beginning to save for an emergency fund.
List the five steps in the financial planning process. For each, list an activity, or financial task, that you should accomplish in each stage of the financial life cycle. There are five basic steps to personal financial planning and their related tasks. Arrange these steps and examples of related tasks in the order of their presence during the financial planning process. A. Develop a plan of action. Develop a budget matching income and projected expenses for the remainder of this academic year. B. Evaluate your financial health. Record all expenses for a month to compare income and expenses. C. Review progress on the plan, reevaluate the plan, and revise the plan or start over with a new one. Based on this year, develop a revised budget for next year based on projected income and expenses. D. Define your financial goals. Pay off credit card(s) by the end of this school term. E. Implement the plan. Reduce expenses in problem areas so amounts do not exceed budgeted projections. (Select the best choice below.) A. A-D-B-C-E B. B-A-D-E-C C. B-D-A-E-C D. B-D-A-C-E E. A-B-D-C-E
C. B-D-A-E-C
f. As a new couple, what information can you provide Jeremiah and Bethany about possible roadblocks? For example, what are some of the commonly reported disagreements among couples according to a recent Harris Poll? Some of the common disagreements experienced by couples like Jeremiah and Bethany include first and most important to this class are: A. finances, in addition to annoying habits, relatives, and jobs. B. finances, in addition to annoying habits, children, and jobs. C. finances, in addition to annoying habits, children, relatives, and jobs. D. finances, in addition to children, relatives, and jobs.
C. finances, in addition to annoying habits, children, relatives, and jobs.
c. What four common concerns should guide the development of their financial plan? A. The four principles of flexibility, liquidity, protection, and maximization of taxes should guide the development of any financial plan. B. The four principles of flexibility, liquidity, protection, and minimization of retirement years should guide the development of any financial plan. C. The four principles of flexibility, liquidity, protection, and maximization of retirement savings should guide the development of any financial plan. D. The four principles of flexibility, liquidity, protection, and minimization of taxes should guide the development of any financial plan.
D. The four principles of flexibility, liquidity, protection, and minimization of taxes should guide the development of any financial plan.
Jeremiah, an accountant, and Bethany just returned from their honeymoon in the Bahamas. They celebrated their marriage and the completion of Bethany's M.B.A. program. They have been encouraged by their parents to establish some personal and financial goals for the future. However, they do not know how to set or achieve these goals. They know that they would like to own their own home, and have children, but those are the only goals they have considered. Jeremiah knows of a financial advisor who might be able to help them with their predicament, but they don't think they can afford professional help. b. What financial goals (short-term, intermediate-, and long-term) would you determine to be the most important, or least important, to Jeremiah and Bethany considering their current life cycle stage? Support your answer. Intermediate goals, within the next one to ten years, important to Jeremiah and Bethany might include: A. paying off any debt they brought to the marriage, reviewing their insurance coverage, and beginning to save for an emergency fund. B. saving for retirement. C. beginning to save for an emergency fund and changing careers. D. funds for a home purchase as well as other assets to support their lifestyle. With children come additional financial planning needs for savings, insurance, and estate planning.
D. funds for a home purchase as well as other assets to support their lifestyle. With children come additional financial planning needs for savings, insurance, and estate planning.
The goal of financing the cost of education is obviously important in your present stage of the financial life cycle. Explain how this goal might continue to be important in future stages. Judge whether the following statement is true or false. "Since the accumulation-of-wealth stage extends into the mid-50s, financing the cost of education could remain important to me should I choose to continue my education or for the education of others who are important to me (spouse, child, etc.). It is not until Stage 2: Approaching Retirement - The Golden Years that the goal of educating children is usually accomplished. During Stage 3: The Retirement Years, estate planning issues are significant, and leaving part of my estate to fund education for my grandchildren could become important." TRUE FALSE
TRUE
d. List five tips for Bethany to keep in mind when preparing for interviews. A. Review the commonly asked questions, prepare and practice a succinct answer for each. B. Make a good impression by getting a good night's sleep, dressing appropriately, and arriving early. C. Use the library, the Internet, or other sources to learn about the company. D. Thank the interviewer and immediately send a follow-up letter. E. Ask family and friends to call the interviewer to let him/her know you are a good worker. F. Look and act confident, but relaxed. G. Find a friend to go to the interview with you for moral support.
answers below are correct: A. Review the commonly asked questions, prepare and practice a succinct answer for each. B. Make a good impression by getting a good night's sleep, dressing appropriately, and arriving early. C. Use the library, the Internet, or other sources to learn about the company. D. Thank the interviewer and immediately send a follow-up letter. F. Look and act confident, but relaxed.
