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Exam 1: Understanding the Financial Planning Process

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Question 61

Multiple Choice

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Ideally,retirement planning should begin

A) during the year before retirement.
B) when the last child has left home.
C) as soon as the mortgage is paid off.
D) when you get married.
E) none of these.

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Question 62

Multiple Choice

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The Federal Reserve's actions after the financial crisis of 2008 and 2009 resulted in [reduced interest rate | higher interest rates].

A) for the first item
B) for the second item
C) if neither item will correctly complete the statement.

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Question 63

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Income tends to [increase | decrease] between the ages of 55 and 75.

About 20% of Americans say retirement planning is their most pressing financial concern.

The financial crisis of 2008 and 2009 is best characterized as a ______________

Your income is directly related to your

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -"1 want to accumulate a comfortable retirement fund" [would | would not] be a specific financial goal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The financial crisis of 2008 and 2009 is best characterized as a [recession | depression].

Accumulating wealth for later years is called estate planning.

Financial assets are paper assets,such as savings accounts and securities.

Financial planning is a continuing,life-long process.

____ tends to increase and then decrease over the life cycle.

A primary determinant of your quality of life is

Typically,higher levels of education are rewarded with higher income over the lifetime.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The primary determinant of your standard of living is your [wealth | propensity to consume].

Short-term goals include things one wants to achieve in a year or less.

Generally,as income rises,the average propensity to consume

The most important financial planning for young people concerns

The need for financial planning declines as your income increases.

Sam and Lele are in their late 20s with 3 young children.Their most important financial planning concerns would probably include all of the following except