Fall2008Test1

Fall2008Test1 - Personal Finance 1200 Test 1 Chapters 1-4...

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Personal Finance 1200 Test 1 Chapters 1-4 Fall 2008 True/False Questions 1. Financial planning has specific techniques that will be effective for every individual and household. 2. Household size is a major influence on personal financial planning decisions. 3. Inflation reduces the buying power of money. 4. Lenders benefit more than borrowers in times of high inflation. 5. When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years. 6. A financial plan is another name for a budget. 7. Short-term goals are usually achieved within the next year. 8. Planning to buy a house is an example of an intangible goal. 9. Opportunity costs refer to what a person gives up when making a decision. 10. Analyzing your current financial position is a part of the first stage of the financial planning process. Multiple Choice Questions 11. Personal financial planning has the main goal of : A) savings and investing for future needs. B) reducing a person's tax liability. C) achieving personal economic satisfaction D) spending to achieve financial objectives. E) savings, spending, and borrowing based on current needs. 12. With an inflation rate of 9 percent, prices would double in about ___________ years. 13. The stages that an individual goes through based on age, financial needs, and family situation is called the: 1
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Personal Finance 1200 Test 1 Chapters 1-4 Fall 2008 14. 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: 15. The ability to convert financial resources into usable cash with ease is referred to as: A) bankruptcy. B) liquidity. C) investing. D) saving. E) opportunity cost. 16. A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends a direction for your financial activities is a(n): 17. As Jean Tyler plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.
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