Personal Finance Planning Quiz 1 Chapters 1-2

During __________, even though prices decline spending slows because consumers expect prices to continue to decline.

deflation

The ability to convert financial resources into usable cash with ease is referred to as:

liquidity.

The annual price increase for consumer goods and services measured by the Bureau of Labor Statistics is referred called ________.

the consumer price index

Jason Liang has gotten three job offers. He is now looking at the benefits packages of all three to see what he likes and doesn't like. Which step in the career planning process is Jason completing?

evaluate financial and other factors of positions offered.

The Occupational Outlook Handbook would be most useful for determining:

expected employment in various career clusters.

A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends a direction for your financial activities is a(n):

financial plan

If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years?

future value of a single amount

Which one of the following is not an element of corporate culture?

government regulations

Higher prices are likely to result from:

increased spending by consumers without increased production.

The time value of money refers to:

increases in an amount of money as a result of interest.

Paul Carter is 43 years old, married and has three children, ages 13, 10 and 5. Which influence on financial planning does this demonstrate?

Adult Life Cycle

Lynn Roy wants to travel after she retires as well as pay off the balance of the loan she has on the home she owns. Which step in the financial planning process does this situation demonstrate?

Developing her financial goals

A list of grades received in school is commonly included on a résumé.

False

An interest inventory measures a person's aptitudes.

False

Financial planning has specific techniques that will be effective for every individual and household.

False

Interest on savings is calculated by multiplying the money amount times the opportunity cost times the annual interest rate.

False

Planning to buy a house is an example of an intangible goal.

False

The purpose of an informational interview is to obtain employment from a branch office of a major corporation.

False

Time value of money refers to changes in consumer spending when inflation occurs.

False

A family spends $40,000 on living expenses. With an annual inflation rate of 3 percent, they can expect to spend approximately _______ in three years.

$43,720

Bill Evans is concerned about the effect of current economic conditions on various career fields. Which one of the following would be most useful to Bill as he addresses his concerns?

The Wall Street Journal

A job tends to have less of a long-term commitment to a field than a career.

True

Opportunity costs refer to what a person gives up when making a decision.

True

Kyle Burroughs has purchased a suit and has interviewed with three companies through the career placement center at his university. He was surprised by some of the questions asked and does not feel he answered them well. He has developed some answers that he feels are better answers and better reflects his abilities and aptitudes. Which step in the career planning process has Kyle completed?

interview for specific positions and assess the interview performance.

Which type of computation would a person use to determine current value of a desired amount for the future?

present value of a single amount

The uncertainty associated with decision making is referred to as:

risk.

An interview designed to reduce the number of candidates for a position to a workable size is a(n) ____________ interview.

screening

The finalists for a job position are invited for a(n) ____________ interview.

selection

An example of a personal opportunity cost would be:

time comparing several brands of personal computers.

Which of the following is the point at which retirement contributions made on your behalf by the company belong to you even if you no longer work for the company?

vesting

When prices are increasing at a rate of 6 percent, the cost of products would double in about how many years?

12 years

The first step of the career planning process is to:

assess your interests, abilities, and goals.

With an inflation rate of 9 percent, prices would double in about ___________ years.

8 (Rule of 72) 72 / interest rate = 72/9=8

The stages that an individual goes through based on age, financial needs, and family situation is called the:

adult life cycle

The first step of the financial planning process is to:

analyze your current personal and financial situation.