FIN4140 PERSONAL FINANCE CHAPTER 1 HOMEWORK

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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.


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