Question 1

In most societies,the forces of ________ set prices for securities,goods,and services.

Accepted Answer

A)  supply and demand
B)  inflation
C)  business
D)  government
E)  foreign competition

Question 2

Sophia Martin knows that if she continues to work full time,it will be difficult for her to get the time off she needs to be able to travel around the world.However,if she continues to work full time she will more easily earn the money she needs to take her trip and still have money left for her living expenses after she gets back from her trip.Which step in the financial planning process does this scenario demonstrate?

Accepted Answer

A)  Determining her current financial situation
B)  Developing her financial goals
C)  Identifying alternative courses of action
D)  Evaluating her alternatives
E)  Implementing her financial plan

Question 3

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ________ percent.

Accepted Answer

A)  1
B)  2
C)  3
D)  4
E)  5

Question 4

The ability to readily convert financial resources into cash without loss of value is referred to as:

Accepted Answer

A)  bankruptcy.
B)  liquidity.
C)  investing.
D)  saving.
E)  opportunity cost.

Question 5

Opportunity costs may be viewed only in terms of financial resources.

Accepted Answer

A) True 
 B)False

Question 6

Planning to buy a car is an example of an intangible-purchase goal.

Accepted Answer

A) True 
 B)False

Question 7

If inflation is increasing at 4 percent per year,and your salary increases at the same rate,how long will it take your salary to double?

Accepted Answer

A)  24 years
B)  18 years
C)  14 years
D)  12 years
E)  6 years

Question 8

Which of the following is usually considered a long-term financial strategy?

Accepted Answer

A)  Creating a budget this year
B)  Using savings to pay off a loan within one year
C)  Renting an apartment for three years to save for the purchase of a home
D)  Investing in a mutual fund for six years to accumulate retirement funds
E)  Purchasing a six month auto insurance policy to cover the needs of dependents

Question 9

The advantages of personal financial planning include:

Accepted Answer

A)  Increased effectiveness in obtaining,using and protecting your financial resources
B)  Increased control of your financial affairs by avoiding excessive debt and bankruptcy
C)  Improved personal relationships resulting from better communicated financial decisions
D)  All of these
E)  None of these

Question 10

What is meant by the term "Time Value of Money"?

Accepted Answer

Time value of money refers to the increa...

Question 11

The earnings you receive as a saver or an investor reflect:

Accepted Answer

A)  past interest rates
B)  a risk premium based on length of the savings period
C)  expected deflation
D)  the extent of certainty about getting your money back
E)  a positive credit rating

Question 12

Trade balance is defined as the difference between a country's exports and its imports.

Accepted Answer

A) True 
 B)False

Question 13

A family spends $40,000 on living expenses.With an annual inflation rate of 3 percent,they can expect to spend approximately ________ in one year.Use Exhibit 1-A.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

Accepted Answer

A)  $40,300
B)  $41,200
C)  $42,000
D)  $43,720
E)  $46,000

Question 14

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders,excluding items produced with foreign resources.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  deflation
B)  depreciation
C)  appreciation
D)  economic recovery
E)  inflation

Question 16

When identifying alternative courses of action,possible courses of action include:

Accepted Answer

A)  Continue with the same course of action
B)  Expand the past situation
C)  Change the past situation
D)  Take an old course of action
E)  All of these

Question 17

The following are examples of intangible-purchase goals,except:

Accepted Answer

A)  obtaining a college degree.
B)  going on a cruise vacation.
C)  buying a house.
D)  losing weight.
E)  getting more sleep.

Question 18

A question associated with the saving component of financial planning is:

Accepted Answer

A)  Do you have an adequate emergency fund?
B)  Is your will current?
C)  Is your investment program appropriate to your income and tax situation?
D)  Do you have a realistic budget for your current financial situation?
E)  Are your transportation expenses minimized through careful planning?

Question 19

A financial plan is another name for a budget.

Accepted Answer

A) True 
 B)False

Question 20

If you desire your savings to double in 6 years,what rate of return would you need to earn?

Accepted Answer

A)  6 percent
B)  8 percent
C)  9 percent
D)  10 percent
E)  12 percent

Exam 1: Personal Finance Basics and the Time Value of Money

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ________ percent.

Correct Answer
verified

Opportunity costs may be viewed only in terms of financial resources.

Correct Answer
verified

If inflation is increasing at 4 percent per year,and your salary increases at the same rate,how long will it take your salary to double?

Correct Answer
verified

The advantages of personal financial planning include:

Correct Answer
verified

Which of the following is usually considered a long-term financial strategy?

Correct Answer
verified

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders,excluding items produced with foreign resources.

Correct Answer
verified

Planning to buy a car is an example of an intangible-purchase goal.

Correct Answer
verified

When identifying alternative courses of action,possible courses of action include:

Correct Answer
verified

A question associated with the saving component of financial planning is:

Correct Answer
verified

The ability to readily convert financial resources into cash without loss of value is referred to as:

Correct Answer
verified

In most societies,the forces of ________ set prices for securities,goods,and services.

Correct Answer
verified

A financial plan is another name for a budget.

Correct Answer
verified

What is meant by the term "Time Value of Money"?

Correct Answer
verified
Time value of money refers to the increa...
View Answer

If you desire your savings to double in 6 years,what rate of return would you need to earn?

Correct Answer
verified

Correct Answer
verified

The following are examples of intangible-purchase goals,except:

Correct Answer
verified

Trade balance is defined as the difference between a country's exports and its imports.

Correct Answer
verified

The earnings you receive as a saver or an investor reflect:

Correct Answer
verified

A family spends $40,000 on living expenses.With an annual inflation rate of 3 percent,they can expect to spend approximately ________ in one year.Use Exhibit 1-A.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

Correct Answer
verified

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

Correct Answer
verified

Exam 1: Personal Finance Basics and the Time Value of Money

More recently,the annual price increase for most goods and services as measured by the consumer price index has been less than ________ percent.

Correct AnswerverifiedShow Answer

Opportunity costs may be viewed only in terms of financial resources.

Correct AnswerverifiedShow Answer

If inflation is increasing at 4 percent per year,and your salary increases at the same rate,how long will it take your salary to double?

Correct AnswerverifiedShow Answer

The advantages of personal financial planning include:

Correct AnswerverifiedShow Answer

Which of the following is usually considered a long-term financial strategy?

Correct AnswerverifiedShow Answer

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders,excluding items produced with foreign resources.

Correct AnswerverifiedShow Answer

Planning to buy a car is an example of an intangible-purchase goal.

Correct AnswerverifiedShow Answer

When identifying alternative courses of action,possible courses of action include:

Correct AnswerverifiedShow Answer

A question associated with the saving component of financial planning is:

Correct AnswerverifiedShow Answer

The ability to readily convert financial resources into cash without loss of value is referred to as:

Correct AnswerverifiedShow Answer

In most societies,the forces of ________ set prices for securities,goods,and services.

Correct AnswerverifiedShow Answer

A financial plan is another name for a budget.

Correct AnswerverifiedShow Answer

What is meant by the term "Time Value of Money"?

Correct AnswerverifiedTime value of money refers to the increa...View AnswerShow Answer

If you desire your savings to double in 6 years,what rate of return would you need to earn?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The following are examples of intangible-purchase goals,except:

Correct AnswerverifiedShow Answer

Trade balance is defined as the difference between a country's exports and its imports.

Correct AnswerverifiedShow Answer

The earnings you receive as a saver or an investor reflect:

Correct AnswerverifiedShow Answer

A family spends $40,000 on living expenses.With an annual inflation rate of 3 percent,they can expect to spend approximately ________ in one year.Use Exhibit 1-A.(Round time value factors to 3 decimal places and final answer to the nearest dollar amount.)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Time value of money refers to the increa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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