Time Remaining:
1. Which of the following would increase the risk of a loan?
rising consumer prices
a short time to maturity
lower consumer prices
constant interest rates
a good credit rating
2. The stages that an individual goes through based on age, financial needs, and family situation is called the:
financial planning process.
budgeting procedure.
personal economic cycle.
adult life cycle.
tax planning process.
3. Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to:
Inflation risk.
Interest rate risk.
Income risk.
Personal risk.
Liquidity risk.
4. The success of a financial plan will be determined by:
the amount of income available.
the stage of the adult life cycle.
a person's tax status.
how resources are used.
current economic conditions.
5. ____________ goals relate to personal relationships, health, and informal education.
Durable-product
Short-term
Consumable-product
Intangible-purchase
Intermediate
6. Which of the following goals would be the easiest to implement and measure its accomplishment?
"Reduce our debt payments."
"Save funds for an annual vacation."
"Save $100 a month to create a $4,000 emergency fund."
"Invest $2,000 a year for retirement."
7. If a person deposited $50 a month for six years earning eight percent, this would involve what type of computation?
simple interest
future value of a single amount
future value of a series of deposits
present value of a single amount
present value of a series of deposits
8. Which type of computation would a person use to determine current value of a desired amount for the future?
simple interest
future value of a single amount
future value of a series of deposits
present value of a single amount
present value of a series of deposits
9. Tax-deferred employee benefits are:
not subject to federal income tax.
not subject to state income tax.
taxed at some future time.
are taxed at a special rate.
10. A commitment to a profession that requires continued training and offers a clear path for occupational growth is a(n):
apprenticeship.
job.
internship.
career.
cooperative employment experience.
11. A lack of willingness to accept a variety of employment positions is a common career planning mistake associated with weak:
common sense.
communication.
training.
flexibility.
perseverance.
12. Efficient work habits are an example of:
on-the-job training.
continuing education.
an employee's initiative.
cooperative education.
13. The final step of the career planning process is to:
plan for career development.
evaluate the job market.
research specific career areas.
identify potential job opportunities.
evaluate job offers.
14. Which of the following are considered to be personal financial statements?
budget and credit card statements
balance sheet and cash flow statement
checkbook and budget
tax returns
bank statement and savings passbook
15. The current financial position (including net worth) of an individual or family is best presented with the use of a(n):
budget.
cash flow statement.
balance sheet.
bank statement.
time value of money report.
16. A family with $45,000 in assets and $22,000 of liabilities would have a net worth of:
$45,000.
$23,000.
$22,000.
$67,000.
$41,000.
17. Liquid assets refer to:
amounts that must be paid soon.
cash and other items that are easily converted to cash.
total income available to a family for spending.
the value of investments.
amounts on which taxes must be paid.
18. Which of the following situations is a person who could be insolvent?
assets $56,000; annual expenses $60,000
assets $78,000; net worth $22,000
liabilities $45,000; net worth $6,000
assets $40,000; liabilities $45,000
annual cash inflows $45,000; liabilities $50,000
19. Improvements in a person's financial position are the result of:
increased liabilities.
reductions in earnings.
increased savings and investments.
increased purchases on credit.
lower amounts deposited in savings.
20. A budget deficit would result when a person's or family's:
actual expenses are less than planned expenses.
actual expenses are greater than planned expenses.
actual expenses equal planned expenses.
assets exceed liabilities.
net worth decreases.