Financial Planning Ques(2)

Financial Planning Ques(2) - 1 SAMPLE TEST QUESTIONS 1. The...

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SAMPLE TEST QUESTIONS 1. The preferred approach of fixing a budget that shows a cash deficit for the year is to _______________ to bring the budget into balance. a. increase your income b. cut low priority expenditure items c. liquidate savings and investments d. borrow money 2. When developing a budget which of the following should you NOT DO ? a. Include your “wants” b. Include family members c. Set reasonable limits d. Consider unexpected expenses e. All of the above should be included in developing a budget. 3. Brilliant Brenda is only 7 years old, but she knows she wants to go to UT when she's 18. Reading the newspapers, she has figured out that at the current rate of tuition increases, she will have to pay $380 per credit hour. This means that four years of tuition will cost her $48,000. How much of her paper route money must she save each year for the next 10 years just to cover tuition? Her savings account earns 3%. a. $3,223 b. $3,856 c. $4,187 d. $4,345 e. $4,800 4. Which of the following is an example of a well-stated financial goal, as defined in class? a. To own an Acura Legend b. To have adequate liquidity c. To live in a $300,000 house d. To own a well-diversified portfolio of securities e. To have $15,000 for your house down payment in 5 years 5. A financial planner would NOT recommend which of the following? a. Increase your savings ratio. b. Increase your tax burden ratio. c. Increase your liquidity ratio. d. Increase your spending ratio. 6. Ursula makes $36,000 annually ($24,000 after taxes). She owes the bank $15,000 on her Audi and pays $560 monthly on car payments. Assuming this is her only debt, what is Ursula's debt ratio ? a. 7% b. 12% c. 18% d. 28% e. 42% 1 1
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7. The income and expenditure statement is a "snapshot" of your finances at a particular point in time. a. True b. False 8. Which of the following items would you find on a cash flow statement? 1. Wages 2. Auto insurance premiums 3. Checking account balance 4. Revolving credit outstanding balances 5. Rent a. 1, 3, 5 b. 1, 2, 4 c. 1, 2, 5 d. 2, 3, 4 9. Todd is thinking of preparing his own personal balance sheet to evaluate his financial position. When preparing a balance sheet, Todd should list all his assets at their market value, not at their purchase price. a. True b. False 10. An example of an investment asset is while is an example of a personal asset. a. Stocks; jewelry b. Savings account; stocks c. Jewelry; your home d. A rental duplex; your home e. Gold; bonds 11. In setting up a new budget a(n) is more useful, but to track your net worth over time you should use a(n) . a. balance sheet; cash flow statement b. personal property inventory; cash flow statement c. cash flow statement; personal property inventory\ d. cash flow statement; balance sheet e. checkbook record; tax returns 12. In budgeting, it is best to record your credit card transactions when you receive your monthly bill instead of when you actually make the purchase. a.
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This note was uploaded on 11/10/2010 for the course HDF 322 taught by Professor Kitt during the Fall '08 term at University of Texas at Austin.

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Financial Planning Ques(2) - 1 SAMPLE TEST QUESTIONS 1. The...

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