Exam 1: Overview of a Financial Plan

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A) determining how your wealth will be distributed before or upon your death
B) what you owe
C) forecasting future expenses and savings
D) source of current information about a variety of topics
E) value of what you on minus what you owe
F) determining how much money you should set aside for retirement
G) access to funds to cover any short-term cash deficiencies
H) uncertainty on a potential return on an investment
I) decisions regarding how much money to hold in liquid form and how to allocate funds among short term investments
J) what you own

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A) many people lack an understanding of personal finance.
B) many people prefer to rely on advisers rather than making their own decision.
C) many people are just not interested in making their own financial decisions.
D) the law requires that you use advisers before making investments.

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A) Whether to obtain a 3 year versus 4 year loan on a new car
B) Whether to obtain a 15 year versus 30 year loan on a new home
C) Whether to pay off an existing loan
D) Whether to invest income in a savings account or in a stock

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A) managing liquidity.
B) budgeting and tax planning.
C) investing money.
D) spiritual training.

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A) Paying off a school loan in three years
B) Purchasing a car within six months
C) Saving enough money to retire in 20 years
D) Paying for two years of college

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A) the amount of education you pursue.
B) the current pay level you receive.
C) the current economy.
D) the bonus check your best friend just received.

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A) money needed for major consumer purchases.
B) what you give up or forego as a result of making a decision.
C) the amount paid for taxes when a purchase is made.
D) evaluating different alternatives for financial decisions.

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A) A new television set
B) An art collection
C) A savings account
D) A mutual fund of stocks and bonds

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A) the highest level of education you've attained.
B) the amount of your annual income.
C) the value of what you own minus the value of what you owe.
D) your tax bracket.

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A) Setting aside money for season tickets to your favorite football team
B) Investing your money
C) Planning your retirement
D) Budgeting

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