Finance 360 Chapter 1 Quiz
To increase the effectiveness of obtaining, using, and protecting his financial resources.
Jim Johnson was laid off from his job two months ago. He just received an offer for a position that pays 3/4 the salary of his old job. Why should he set up a financial plan?
True
Personal financial planning is the process of managing your money to achieve personal economic satisfaction.
True
Purchasing a car is an example of a durable-product goal.
9 years
If inflation is expected to be 8 percent, how long will it take for prices to double?
Financial Plan
A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is a(n)
Time comparing several brands of personal computers.
An example of a personal opportunity cost would be
Obtaining
Attempts to increase income through employment are part of the _____________ component of financial planning.
interest-rate
Changes in the cost of money is referred to as ____________ risk.
Lower interest rates
Increased consumer saving and investing is likely to be accompanied by
True
Inflation is a rise in the general level of prices and it reduces the buying power of the dollar.
Present value of an annuity
Jennifer Rodriguez plans to attend graduate school in 5 years. She thinks that she will need a total of $32,000 to pay for school, and she wants to save money each month to reach her goal. What type of computation should she use?
4, 6, 2, 5, 3, 1
Place the following steps for a personal financial plan in the proper order: 1. Review and revise the financial plan 2. Identify alternative courses of action 3. Create and implement your financial action plan 4. Determine your current financial situation 5. Evaluate alternatives 6. Develop your financial goals
False
Purchasing an appliance is an example of a consumable-product goal.
False
Risks associated with many financial decisions are easy to identify and evaluate.
Used to estimate how fast prices will double using a given annual inflation rate
The Rule of 72 is:
False
The financial activities for a young, single person will probably be the same as those for an older couple with no dependent children at home.
income
The loss of a job or encountering an illness results in ____________ risk.
Achieve personal economic satisfaction.
The major function of personal financial planning is to
personal
The tangible and intangible factors that create a less than desirable situation is referred to as ____________ risk.
False
There are only 3 possible courses of action when developing alternatives for decision making.
Evaluate your alternatives.
Using the services of financial institutions or financial specialists (such as insurance agents or investment advisers) to seek relevant information is done in which step in the financial planning process?
True
When prices are increasing at a rate of 4 percent, the cost of products would double in about 18 years.
Save $100 a month to create a $2,400 emergency fund in 2 years.
Which of the following goals would be the easiest to implement and measure?
Purchase a house with a mortgage no greater than $150,000 within 5 years
Which of the following intermediate goals is stated most clearly using the SMART approach?
Buy a car for less than $15,000 within 6 months
Which of the following short-term goals is stated most clearly using the SMART approach?