PFS exam 1

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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 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 of cost is he incurring?

personal opportunity cost relating to time.

which of the following would increase the risk of loan?

poor credit rating

which of the following intermediate goals is stated most clearly using the SMART approach?

purchase a house within the next 5 years with a mortgage no greater than $150,000

the step in the personal financial planning process that follow immediately after the step: "create and implement your financial action plan" is

review and revise the financial plan

making financial decisions related to income involves all of the following except

taking

the consumer PRICE index measures

the average change in PRICEs of a fixed basket of goods and services of urban consumers

an example of a PERSONAL opportunity cost would be

time comparing several brands of PERSONAL computers.

if a $10,000 investment earns a 4% annual return, what should its value be after one year?

$10,4000

If Melinda Miller estimates that her $100 weekly grocery bill will increase at an annual inflation rate of 4%, what should her weekly grocery bill be in 3 years?

$112.50

if a $10,000 investment earns 7% annual return, what should its value be after 6 years?

$15,010

If you deposit $500 into a Certificate of Deposit earning 3%, what would be your earnings after 12 months?

$15.00

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 saving $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 needs , and recommends future financial activities in an..

financial plan

the difficulty of converting savings and investments to cash is referred to as __________ risk.

liquidity

the goal of investing $50 per month for the next 12 years for your nephews college fund is a ______ goal.

long term

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 earn 4 percent on your savings, how much do you need to deposit?

$889

if a $10,000 investment earns interest of $500 in one year, what is its rate of return?

5 percent

if inflation is expected to be 8 percent, how long will it take for prices to double?

9 years

FUTURE value COMPutations are often referred to as

COMPounding

the problem of Bankruptcy is associated with overuse and misuse of credit in the ________ component of financial planning.

Borrowing

preSENT value computations are also referred to as

DIScounting

to develop financial GOALS, one should

Identify specific, realistic goals that are measurable along with a time frame and an ACTION PLAN

the loss of a job or encountering an Illness results in ________ risk.

Income

many Americans have a PROBLEMS because of..

POOR planning and WEAK money management habits

changes in personal, social, and economic factors may Require you to

Review and Revise your financial plan more frequently.

To calculate the time value of money, we need to consider all of the following except the

Type of investment

Using the services of financial institutions or financial specialists (such as insurance agents, certified financial planners or investment advisers) to seek relevant information is done in which step in the financial planning process?

evaluate your alternatives

the saving component of financial planning focuses on long-term SECURITY and includes:

a regular saving plan for EMERGENCIES

the stages in the family situation and financial needs of an adult

adult life cycle

who is less likely to be harmed by inflation?

borrowers

the first step of the financial planning process is to

determine your current financial situation

_________ goals relate to infrequently Purchased, expensive tangible items.

durable-Product

every decision involves UNCERTIANITY, which is referred to as

evaluating RISK

which of the following is Correct?

food and Clothing are Consumable-product goal

Which of the following is an example of a financial opportunity cost?

forgoing Wages to attend school.

An investor should expect to receive a risk premium for

higher uncertainty about getting his/her money back

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 cause changes in buying power is referred to as _________ risk.

inflation

changes in the cost of money is referred to as ___________ risk.

interest-rate

the rule of 72 is:

used to estimate how fast prices will double using a given annual inflation rate

opportunity Cost refers to

what you give up by making a Choice.


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