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.