Personal Finance

1) The amount of money you have left over each month is most directly related to your plans to manage ________.A) fixed expenses B) liquidityC) investmentsD) long-term savings B
2) Money that an individual spends is referred to as ________.A) cash inflowB) liquidityC) investment D) cash outflow D
3) Which of the following questions would you be most likely to ask when creating a plan for investing?A) What expenses should I anticipate?B) Should I use a credit card for cash shortfalls? C) How much risk can I tolerate?D) How much money should I keep in my savings account? C
4) When creating a plan for ________, you would likely ask yourself what expenses you anticipate and what regular debt payments you need to make.A) managing your income B) financingC) protecting your assetsD) investing B
Financial plan questions about cash inflows and cash outflows taper off as an individual begins his or her career. False
Cash inflow refers to money received from income but not other sources. False
Cash outflow refers to money that an individual spends. True
Cash plays a central role in your financial plan. True
Each stage of creating a financial plan involves asking yourself challenging questions and making challenging decisions True
The effects of financial decisions are typically easy to anticipate False
Turning a personal cash flow statement into a budget for an entire year requires precision and accuracy. True
It is possible to adjust your budget once you have started to use it. True
Your budget should help you anticipate future cash shortfalls. True
To assess the accuracy of your budget, you should compare cash flow forecasts for each month. True
A) outflowB) inflowallowance Nicole receives from her parents B
A) outflowB) inflowinterest Nicole earns from her savings account B
A) outflowB) inflowinterest Nicole is charged on her credit card balance A
A) outflowB) inflowthe price of a ticket for a concert Nicole goes to A
A) outflowB) inflowthe amount that Nicole spends on gas for her car each week A
A) outflowB) inflowthe tips Nicole makes waiting tables at a restaurant B
Andrew is evaluating his current financial position by totaling his monthly cash inflows and outflows. His cash inflows each month are $60 in allowance and $240 in wages from his part-time job working at the pet store. His cash outflows each month are $170 for his car payment, $70 in entertainment, and $45 for gas and food. How much, if anything, does Andrew have left over each month? $15 left over
Which of the following suggestions for financial goal setting would you be LEAST likely to find on a reputable financial planning Web site?A) Have a plan of action to accomplish your goals. B) Set general rather than specific goals.C) Be realistic in both your long-term and short-term goals.D) Put your goals in writing. B
Which of the following is NOT a typical asset listed on a personal balance sheet?A) investmentsB) liquid assets C) cash inflowsD) household assets C
Christine is creating a personal balance sheet and has begun classifying her assets. Which of the following should Christine classify as a liquid asset?A) her checking accountB) her carC) her real estate investmentsD) her mutual fund A
The defining characteristic of a liquid asset is its ________.A) ability to earn interestB) market value C) quick availabilityD) diversification C
To figure your personal balance sheet, you would need to conduct research to estimate the market value of your ________.A) stocksB) bondsC) liquid assets D) household assets D
Financial goals that you plan to accomplish within the next year should be categorized as ________ goals.A) immediate B) short-termC) intermediate-termD) long-term B
Financial goals that will take more than five years to accomplish should be categorized as ________ goals.A) life-longB) short-termC) intermediate-term D) long-term D
As your financial goals become more involved, you will need a more ________ financial plan.A) generalB) creativeC) standard D) specific D
Of the following, it is most important for your financial goals to be ________.A) long-termB) varied C) achievableD) demanding C
To make a financial forecast, it is most important to evaluate and make predictions about your ________.A) assetsB) debt C) cash flowsD) wages C
A) fixed expenseB) variable expensemonthly rent A
A) fixed expenseB) variable expensemoney spent on entertainment in one month B
A) fixed expenseB) variable expensemoney spent on gas in one month B
A) fixed expenseB) variable expensemoney spent on a car loan payment in one month A
A) fixed expenseB) variable expensemonthly gym membership fee A
A) fixed expenseB) variable expensemoney spent on clothing in one month B
Justyna is working on a personal balance sheet. She has $575 in a checking account, $650 in a savings account, $500 in government bonds, and $1,400 in stocks. How much does Justyna have in investments? $1,900
Sal has invested in two different stocks over the past few years. He has 22 shares of Company A’s stock, which is currently selling at $45 per share. He also has 130 shares of Company B’s stock, which is currently selling at $75 per share. What is the total value of Sal’s stock holdings? $10,740
To determine his net worth, Afzal has gathered information on all of his assets and liabilities. He has $4,350 in household assets, $400 in liquid assets, and Series EE bonds currently worth $785. Afzal’s only liability is the remaining balance of his car loan, which is $1,250. What is Afzal’s net worth? $4,285

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