Question 1: The danger of lost buying power during times of rising prices is referred to as
- inflation risk.
- economic risk.
- personal risk.
- interest-rate risk.
- money risk.
Question 2: In financial planning, a major activity component involves the
- allocation of current resources for spending.
- evaluation of investment alternatives.
- evaluation of one's career.
- selection of insurance coverage.
- establishment of credit.
Question 3: The Federal Reserve has the responsibility to
- monitor illegal business activities.
- approve spending by Congress.
- set federal income tax rates.
- maintain an adequate supply of money.
- maintain a balanced budget for the federal government.
Question 4: The _____ refers to stages that an individual goes through based on age, financial needs, and family situation.
- financial planning process
- financial cycle
- adult life cycle
- personal economic cycle
- tax planning process
Question 5: If you want your money to double in 12 years, what rate of return would you need to earn?
Question 6: Higher employment levels can be attributed to
- lower consumer prices.
- reduced employment levels.
- lower interest rates.
- higher employment levels.
- increased consumer spending.
Question 7: When it comes to the financial planning process, the first step is to
- develop financial goals.
- implement the financial plan.
- evaluate and revise your actions.
- analyze your current personal and financial situation.
- create a financial plan of action.
Question 8: The simple calculation of interest can be performed by multiplying the amount in a savings account by the
- annual interest rate.
- annual interest rate and the time period.
- number of months in a year.
- time period and number of months.
- time period.
Question 9: Which goal below would be the easiest to implement and measure in terms of accomplishment?
- "Reduce our debt payments."
- Save $100 a month to create a $4,000 emergency fund."
- "Save funds for an annual vacation."
- "Invest $2,000 a year for retirement."
Question 10: _____ risk refers to the changing cost of money.
- Monetary
- Inflation
- Economic
- Personal
- Interest rate
Question 11: In order to evaluate present value scenarios, _____ is/are needed.
- multiplication
- compounding
- simple interest calculations
- discounting
- payment information
Question 12: Barb Hotchkins is in the 28% tax bracket. A tax-exempt employee benefit with a value of $600 would have a tax-equivalent value of
- $678.
- $628.
- $833.
- $300.
- $168.
Question 13: In order to evaluate one's current financial position (including net worth), the best tool that can be used is a
- budget.
- cash flow statement.
- bank statement.
- time-value-of-money report.
- balance sheet.
Question 14: A _____ résumé would best be used by an employee who has worked in many fields and has a variety of skills in a variety of work-related categories.
- targeted
- goal-oriented
- chronological
- functional
- career change
Question 15: When a prospective employee presents a _____ résumé, this means that educational and work experiences are presented in a reverse time sequence.
- goal-oriented
- functional
- sequenced
- chronological
- database
Question 16: A lack of _____ refers to a lack of willingness to accept a variety of employment positions and is a common career planning mistake.
- common sense
- flexibility
- training
- communication
- perseverance
Question 17: The distinction between current liabilities and long-term liabilities can be made based upon the
- amount owed.
- due date of the debt.
- interest rate charged.
- financial situation of the creditor.
- current economic conditions.
Question 18: Personal balance sheets can be used to analyze
- future income and expenses.
- the net worth of an organization.
- the cash flow of an individual or a family.
- debt payment activities.
- what an individual or family owes and owns.
Question 19: A person's financial position can be improved if he or she experiences
- increased liabilities.
- reductions in earnings.
- additional credit purchases.
- an increase in investments and savings.
- lower amounts deposited in savings.
Question 20: Which of the following situations best represents an individual facing insolvency?
- Assets $30,000; liabilities $37,000
- Assets $78,000; net worth $22,000
- Liabilities $45,000; net worth $6,000
- Assets $56,000; annual expenses $60,000
- Annual cash inflows $45,000; liabilities $50,000